Google Fires Off Warning to US Telcos

mytrip writes "The US Senate Commerce Committee last week approved reforms in communications legislation that will make it easier for Internet providers to offer IP-based television. The resultant perceived threat of telecommunications companies muscling in on the Web has stirred search giant Google into firing off warnings. A spokesman said it would not hesitate to file anti-trust complaints if Internet-providing telcos abuse powers that could come from U.S. legislators in further reforms - some of which, Google argues, could threaten 'Net Neutrality'.

Comments

So that's what $425 a share buys

[SlappyBastard]

Pretty badass. Can we get the EFF to go public, too?

Re:So that's what $425 a share buys

[ZachPruckowski]

1) At least they try.
2) Fear of lawsuits, even winnable ones, can worry companies.
3) They have had some successes, but more importantly, they're making news and bringing bad things to light.

Re:So that's what $425 a share buys

[deathy_epl ccs]

Wasn't this already decided by that case that orginally caused the breakup of AT&T into the Baby Bells --- the lawsuits brought by Carterfone and MCI after AT&T tried to muscle them out of the industry by pulling their longlines?????

Yeah, but this time they're trying (and I wouldn't be surprised to see succeeding) to get the government to do the dirty work for them. Instead of being underhanded about it, they are blatant about it.

More Here

[neonprimetime]

From Reuters (linked in Article), More Info Here in yesterday's article

Re:More Here

[WhiteWolf666]

Ah, yes.

And now that localities will loose control over the cable providers, the TV companies (teleco&cable) will no longer be forced to do stupid things like carry community (city) TV, meet local council requirements, or have regulated low-income pricing.

An important part to capitalism is that barriers to entry be fair. If Comcast has to overcome a certain set of legislation to enter a community, so should AT&T. And personally, I'm all for localization of law, not federalization. The more of our legislation that occurs in smaller and smaller governments, the better.

A federalist system is always better at serving constituents than a centralized system. The telecos are huge companies with significant presences (including personnel and offices) in each of these communities. There's nothing wrong with forcing them to go community by community in order to get their licensing.

Re:More Here

[drinkypoo]

How exactly are they hijacking the internet? What AT&T or Verizon does is no different than Comcast's DOCSIS channel. The internet and the TV are on seperate bandwidth, exclusive to their users. It doesn't slow up Google searches or how fast you download a file off the internet.

The internet and the TV are on entirely separate frequencies. (The cable modem data IS on a specific channel or channels, though; your head end connects into an up-converter.)

I'm going to use an automotive analogy now, so hang onto your seats, in case it sucks. Think of the system like a toll bridge, for example the golden gate. Over on the far right they have the high occupancy no-toll lane, to allow buses to pass by unpaid. This is television traffic. You can be on the bus, receiving TV, or not.

Otherwise, you pass through the toll gate, and you pay a fee per axle, which correlates loosely to weight, and thus the damage done to the bridge by use. This is like paying per-byte. This is, if not an appealing model, at least a fair one. Those receiving the content pay, just as those crossing the bridge pay. Those taking another route don't - just like the current internet. If you send your packets on a private network, you don't pay for the traffic, just the connection (in this analogy, like owning the car and keeping it up, and paying the road taxes - infrastructure maintenance.)

A lack of net neutrality would impose an additional fee schedule. Let's say that you could buy a fastpass, and you'd get across the bridge cheaper. (for all I know, this is true already in the real world, but forget about it for now.) However, the fastpass costs (in this mythical example) more than a minor content provider can afford. Meanwhile, unless you're in a bus you can't use the HOV lane, and they close down all but one lane for non-fastpass traffic. Now, it's utterly impossible for you to commute and get where you want to go, because it takes all day for the non-fastpass traffic to get across the bridge.

Loss of net neutrality will destroy all non-commercial content on the internet.

If this is what you want, by all means, don't back net neutrality.

And, on the subject of the state cable franchising, that means they will simply be able to ignore any area with low population density completely. I live in the boonies, and if my local city council actually cared about the local residents (they don't - I live in Lake County, CA, by the way. Come check out our roads - you can off-road through the middle of town!) then they could have mandated that my area would be connected. I live maybe half a mile from where the cable network stops.

State cable licensing is just another way to ignore the needs of the people in pursuit of profit. Why should we grant these companies a right of way if they're not going to serve us? All of the laws that allow corporations to exist and operate, and to own "intellectual property" which is an entirely abstract concept, are created by the government, which is ostensibly of the people. If it's not serving the people...

Obligatory Ballmer joke

[martinultima]

BALLMER: We're going to fucking kill Google!!
GOOGLE: We're going to fucking kill giant telcos!!
(both start throwing chairs; chaos ensues)

Meh ... misleading headline

[Average_Joe_Sixpack]

I thought they were going to carpet bomb the telcos from the Google plane

Not Surprising

[epp_b]

Google is a big, juicy target for greedy ISPs wanting to cash in by dipping into other ISPs' customers' pockets. It's genuinely beneficial to Google and their users that Net Neutrality is implemented and protected. I hope Google does everything they can to protect it, too.

Chicken and egg and chicken and egg and

[dada21]

Google's partially right to make these threats -- they're mad because companies that continue to receive monopoly powers, preferential treatment, restrictive licensing rules and even public subsidies should not be given even more power over the media distribution system. Yet the end result of Google's threats will only be MORE government control of the media, not less.

Net Neutrality is bunk -- it means ZERO. We don't need net neutrality, we don't want it, and we won't get it. What we need is a realistic free market playing field of open competition for anyone who wants to jump into the business. Let's stop all the regulations, taxes, tariffs, fees and restrictions on media companies and let them compete openly. IPTV is probably the future -- who cares about airwaves when everything is going digital and coming over a landline? Yet the phone companies still get preferential treatment from the national, state and local governments, and giving them both preferential treatment and the right to control their pipeline's access is tipping the system towards the cronies, not the consumers.

The consumers want one thing -- competition. Competition happens when government stays away from the market. The more we let government "regulate" net neutrality or attempt to create a level playing field, the more we'll see our prices go up, our service levels go down, and competition get wiped out of the market.

Google shouldn't be clamoring against the cronies, they should be threatening the government. Nothing would please me more than Google taking on a pro-independence role the day after an anniversary of the last time our citizens kicked the government in the teeth and sent them packing.

Re:Chicken and egg and chicken and egg and

[VP]

How exactly do you propose to create this "realistic free market playing field of open competition for anyone who wants to jump into the business"? The telcos own the wires - do you propose the government take the wires away and lease them to the lowest bidder?

Re:Chicken and egg and chicken and egg and

[Lumpy]

You can get all that you want the moment you can get the tax for paying for the Spanish american war off of the phone bill.

Yes, there is a tax STILL on the phone bills and being paid that was enacted for paying for the Spanish American War.

BTW, getting that removed is harder than building a 4 lane bridge from New York to Spain.

Re:Chicken and egg and chicken and egg and

[Waffle Iron]

Let's stop all the regulations, taxes, tariffs, fees and restrictions on media companies and let them compete openly.

I've got a deal for you: First we achieve *all* of those goals, then we can oppose net neutrality legislation.

Given the current reality (a free market in low-latency broadband Internet access simply does not exist), opposing net neutrality legislation with the usual libertarian arguments is putting the cart before the horse.

Re:Chicken and egg and chicken and egg and

[mkraft]

Actually the Spanish American War (federal excise) tax was finally repealed a few months ago. Not only that but it was retroactive to 3 years ago. It took over a hundred years to do, but it did happen.

So can the gf poster get all he wants now?

Re:Chicken and egg and chicken and egg and

[Chosen Reject]

Wrong, the government, and by the transitive property, the people, own the wires. The telcos didn't pay for them to go up. In fact, even when they were paid, by the government, to put them up, they didn't.

Re:Chicken and egg and chicken and egg and

[just_forget_it]

I disagree. Complete "freedom" in either the market or society is never a good thing. John D. Rockerfeller had complete "freedom" to use extortion, threats, and bribery to build an oil monopoly and squash competitors. Government intervention split the company and now using his methods is illegal. It also split the big AT&T telcom monopoly. If it weren't for government intervention, we would still be overpaying for land-line service. The EU is currently leveraging fines against Microsoft for not providing accurate API documentation to third parties. A free market NEEDS regulation, because when left to it's own devices, eventually a shark is going to come along and swallow up the competition, creating a predatory monopoly. Without government to step in and provide a deterrent against this, any free market will eventually implode.

Re:Chicken and egg and chicken and egg and

[Orne]

The telcos own the wires - do you propose the government take the wires away and lease them to the lowest bidder

Well, you could do what they did to the electric grid, create an "Open Access Transmission Tarriff" that declares that a utility company does not have the right to prevent transactions to occur across their systems. This was basically the first step in electricity de-regulation, the next being that the same company cannot provide the generation, transmission, and load service, because having all three can lead to price fixing, market power, undercutting, and makes it much too easy to be anti-competative. In the telco world, this would be like splitting into transmission (maintain the lines), service providers (maintain the switchers), and service users (like us).

This has the benefit that private companies retain ownership of their lines, and customers become "accounts" that exist in the financial transaction world only. You could have me, a customer, in territory X, purchasing service from Company Y. Y collects the bills, and pays X a standardized "service" fee for moving the data of my phone calls into and out of their system. The government would regulate and standardize this fee with the existing public utility construct.

The down side to this in the electric grid is that you end up with "loop flows"; power flows according to impedance, not because someone created a contract to flow a certain way, so company A's transmission carries some flow that was intended to go across their neighbor's system B. However, there is an "inadvertant accounting" process that meters all of this unscheduled MW-Hour flows, and companies occasionally pay each other back the $ that this flow represents. Telephone calls are discrete / digital, so a company can exactly meter how much a customer is using their service, and properly bill it back to the right service company.

Re:Chicken and egg and chicken and egg and

[arivanov]

If the telcos are not regulated they either coalesce into a Ma Bell or cartel the market. The bigger they are, the higher the barrier to entry for any newcomer to the point where there are no newcomers. The US internet is already 90% of the way in this direction through the Tier 1 ISP peering arrangements which are very effective cartel (as anyone working in an ISP can testify).

This has not happen to such an extent Europe due to the prevalence of public peering which provides a very effective countermeasure to such tendencies.

If Google has any objections to the way the US Internet is going, it should go after the peering. He who controls the peering controls the Internet.

Google has the economical resources to perform an intervention and it should stop moaning and put its money where its mouth is. It should either initiate "Google Peering" or provide financial seeding for a foundation that will run a distributed equivalent of the Linx (or Amsix) across multiple locations in the US.

Once a large enough proportion of the traffic is off the Tier 1 private peering links and transit connections to them they no longer have a weapon to hold the rest of the Internet hostage.

Re:Chicken and egg and chicken and egg and

[mgblst]

PS. Lumpy, get your lego set out, there is a bridge needing a building.

Re:Chicken and egg and chicken and egg and

[Red Flayer]

I totally agree with you -- but it's important to note that in an ideal market, this does not hold true. In an ideal market no regulation will result in the best situation. The problem is that no market is ideal -- we've got barriers to entry, non-commodity goods (these two are core issues with telco deregulation), etc.

GP seems to think that all markets behave like ideal markets. They don't -- which is why government regulation is necessary to prevent monopolies from abusing their market status.

But, in the end, it doesn't make much difference -- nothing is going to help him change his mind, we'll continue to posts like this one of his on Slashdot for years to come. The free-market idealists have a pretty unshakeable belief in their dogma, and we'll continue to refute their arguments til kingdom come.

Re:Chicken and egg and chicken and egg and

[Wah]

But I damn well expect if Verizon is charging the sites I go to, that they're not charging me.

Umm, an extra charge for any service you use is going to come back to you(period).

Re:Chicken and egg and chicken and egg and

[WhiteWolf666]

Mod parent up.

The telecos are an abomination of government subsidy and government sponsorship. Arguing that we should keep regulation away from them is nonsensical.

Even in an Ayn Randian world, the Telecos are a market failure, because they were created by the government. Unleashing the unregulated telecos on the cable market would be akin to release government engineered biological disease weapons on the world ecology to allow "natural selection" to run its course.

The telecos should be repossed by the government, stripped of their cash-assets to the states, and then "privatized" by having their physical assets sold on auction. Lines/Switching stations should become property of localities, with clauses that at minimum they must lease them to telecommunication companies, but with rights to do anything else including privization of these assets.

The teleco market is a heavily government subsided (and government created) market that needs economic shock therapy in order for the free market to even have a chance. Otherwise, the abomination should be kept strictly under regulation.

Let me remind you how AT&T was built. Let me remind you how AT&T was reassembled, much like Dr. Frankestein's Monster, for the portions of a dead monopoly.

Re:Chicken and egg and chicken and egg and

[dominator]

The consumers don't want competition. We want reliable, fast, inexpensive internet access. If competition is the means to that ends, then great. If government intervention will deliver it, that's great too. Whatever it takes to get me what I want.

Re:Chicken and egg and chicken and egg and

[plague3106]

First, a company has no right to exist, where as a person does.

Second, the telcos have been 'stealing' from us already. They got some major regulations removed, on the promise that they would deliver fiber connections to everyone's home. I'll be getting fiber to my home sometime next year, but thanks for a government entity, NOT a private one.

Finally, yes, there are certain instances were its ok for the government to take your house. One example is for the building of roads. The difference is that you get paid fair market value, since you built the house (or bought it) with your own money, not because government tax money was given to you as a subsidy.

Any other stupid questions?

Re:Chicken and egg and chicken and egg and

[BrynM]

The telcos own the wires - do you propose the government take the wires away and lease them to the lowest bidder?

Um... We citizens used to own those lines as a public utility. The telcos (when they were one telco) were given large subsidies to build out their networks. You should go read this history and then read this old but prescient article. The government still forces Telcos to lease the lines for telephony use at a fixed wholesale price, but I guess the Internet doesn't count for some reason.

Re:Chicken and egg and chicken and egg and

[Red Flayer]

Well, let's see:

Barriers to entry? Check.
Non-commodity good? Check.
Lack of perfectly informed decisions by the purchasers? Check.

Note that even if the federal government were to stop regulating telecom, there is still the whole issue of infrastructure for landline-based delivery, in terms of barriers to entry.

As to higher barriers to entry under regulation -- that's acceptable, as ANY barrier to entry on the scale we're talking about will prevent competition... adding a few bucketfuls of sand to a dune won't make a difference. The point is that what we'd see WITHOUT regulation would be almost zero innovation by the sole provider in each area -- unless there was a way to make more money off it. Your idea that innovation was stifled by regulation is off the mark -- innovation was stifled by monopoly suppliers, who would have existed with or without regulation.

You can refute it, but your refutations don't hold water. That's why I posted "chicken and egg and chicken and egg" because the common refutation is "Well, we have to regulate it because we spent tax dollars on building the infrastructure." Well, why did you do that? "Because we had to since no one would have sold land to provide the service in the first place." How do you know that? "Well, because."

Don't ascribe others' reasons to me. We don't need to regulate because we spent money on infrastructure... we need to regulate for the same reasons we spent money on infrastructure. That is, to provide good service to as many people as possible (ideally, all of them who want it) while preventing a monopoly from gouging people. There is a natural monopoly for anything with as big of an infrastructure as the telecomm industry, and companies will take advantage of that, to the detriment of consumers, unless regulated.

As to JJ Hill -- why do you think other business were unable to compete? Because of imperfect market conditions (as any real market has) that prevented newcomers from challenging him. Sure he could deliver cheaper goods... he had the infrastructure in hand already. But someone will equal access to the infrastructure could have easily driven prices even lower, and provided more services.

Also, -5 for credibility there. Your little opinion piece about JJ Hill (a self-authored citation? blech.) doesn't refute the fact that he was in fact a monopolist. Sure,some of the things he did help ameliorate the harm his monopolies caused, but it is disingenuous to say that his monopolies caused no harm. A lot of those things could have been done just as easily under a non-monopolist industry. Finally, note that a lot of his innovation was not due to competition from other firms -- it was to react to worldwide financial crisis.

Sending my internets

[just_forget_it]

As long as they don't interfere with me sending an internet, more power to 'em.

Re:Sending my internets

[general scruff]

Yeah, I hear that google has been buying up "Dark Tubes" as they are called, by the handful! With all that power, you could sent 2 or 3 internets an hour!

pretty unfair...

[aleksiel]

google is just just trying to keep their monopoly on the internets tubes. imho, they're being pretty greedy and its hurting the consumers. i mean, come on! it took me 5 days for the internets to download at my office!

I would applaud but.....

[Churla]

Just MHO.. but.. if this were them really fighting for the freedom and neutrality of the Internet then I would be all for it. But this looks more like they know they won't be able to be the big dog in on line media if other companies can restrict them because of controlling the transport.

They're threatening to do this to protect their profitability and potential market for on demand video and TV just as much, and maybe more-so , than trying to protect some pristine concept of a neutral Internet from what I see.

Re:I would applaud but.....

[garcia]

But this looks more like they know they won't be able to be the big dog in on line media if other companies can restrict them because of controlling the transport.

Based on what Google has offered *me* in the last five or so years as opposed to what the telcos and other bandwidth providers have offered *me*, I'd have to say that we're better off w/Google being the "big dog" in online media rather than the telcos.

Re:I would applaud but.....

[Spad]

The enemy of my enemy is my friend.

So Google's motives for this move may not be entirely altrusitic, but find me a company whose motives are. The important thing is that they're fighting on our corner.

Antitrust...novel approach

[utlemming]

This is an interesting approach in one respect -- Google actually has the money to be able to pursue anti-trust claims. Think about it. Every other group, personal or entitty that usually pursues an anti-trust claim is usually too small to do anything about it. If the Telcos decide on doing discriminating against Google, then Google can make a case and probably win some of them. If I was a Telco, I might think about playing nice.

Arguably, the right response

[jfengel]

I've always been leery of net neutrality legislation, not because I'm opposed to the concept but because I don't expect Congress to define it correctly. I'd actually rather see it as an RFP amending the IP standard. And there are perhaps things to be accomplished by violating neutrality that would make life better rather than worse.

But the nightmare scenario has always been there: since the number of ISPs available to most consumers are limited, that monopoly power could be used to force choices on consumers. The market could be used to reward innovative ideas that require breaking net neutrality, but monopolies break markets.

I've never really understood what the telcos expect to get from Google on this. When Google starts getting a thousand extortion bills from a thousand separate carriers, there's no way they can track which ones are valid. (Am I going to start Bob's ISP and send Google a bill for it?) I expect Google to toss them all into the trash.

And if they find that consumers are unable to reach them, I sure hope their lawyers can convince the courts that this is antitrust behavior. I trust the courts very slightly more than I trust Congress.

Re:More competition is a good thing

[Lumpy]

If you want what the telcos and Cable companies think that IPTV should be then you will not like it in any way.

I currently have IPTV and live it. No CATV and no DISH. I watch content from RSS feeds from dltv and other sources. The shows that the networks will not allow in a decent resolution and format I pull from a mythtv box at work on the Cable tv line. I could get the content from bittorrent but not automatically.

What the networks, telcos and cable tv companies want you to have as IPTV really sucks. no way to skip commercials, no way to watch content on anything but approved hardware (guess who's hardware) which will limit your content selection from other sources, and other restrictions.

IPTV needs 100% freedom, if the content is good people will watch it. if the commercials are good they will be watched as well. It's a major change in how to do business and the big companies refuse to change anything without being forced to.

you do NOT want IPTV as defined by the telcos and other companies.

Re:Translation

[MrSquirrel]

At least Google built their monopoly by being the best and satisfying the customer -- I can't think of one thing Google's done to piss me off. No flashy banner ads, no sign-ups that fill my inbox with spam, nothing! Furthermore, they don't conduct unethical business practices to drive competitors out of business and then turn around to screw the customer. The telecoms are only a monopoly (okay, an oligopoly) because they were put in place as such by the government and were empowered with the taxpayers' hard-earned money. There is nothing wrong with monopolies -- only ill-gotten dastardly monopolies (such as the teleocoms). Power corrupts, absolute power corrupts absolutely. Google power corrupts... with googley eyes?

The litigation will be gruesome.

[postbigbang]

Google Inc vs Verizon, AT&T, QWest, et al

Dateline San Jose CA July 5, 2011: The Google anti-trust ligitation now in its fifth year, may now come to a conclusion says Pamela Jonesish, chief blogger of CommLaw, the site that's tracking the litigation surrounding anti-trust and the old concept of 'net-neutrality'.

"Who would have ever believed that these nutcases could have gotten this far" said Pamela, also known as PJ-ish. "When HD-IPTV finally clogged the pipes to the point where nothing could get through, even ICMP, we all knew the jig was up. Now that Verizon is in Chapter 11 and AT&T has merged with the remaining remnants of the 'baby bells', market leader Comcast-Time Warner believes that the Google litigation should end"....

They have the power to illustrate the case...

[argStyopa]

Google finds some legislators stances on net neutrality unappealing?

Why don't they simply illustrate the value of neutrality to said legislators?

Joe User> Hm, I'd like to look up my congressperson.
Search: "congressman minnesota"
Result: (showing results 1 of 1) Netneutrality.org
Joe User> what? That can't be right. Let me try by their name....
Search: "congressman john smith mn"
result: (showing results 5 of 5) netneutrality.org, anyone_but_john_smith_for_congress.net, getridofjohnsmith.org, johnsmithmolestedmydog.com, adultmalediaperfetish.net

I would imagine they would get the point rather quickly.

So, this affects who exactly?

[i_ate_god]

So America will teir/toll their internet service. What does that mean for the rest of the world? Will AT&T be knocking on the doors of canadian or european based media providers demanding fees?

If the BBC can't reach it's canadian audience because packets have to go through america first, they won't like that. If CBC can't reach its british audience because packets have to go through america first, they won't like that either. Both are crown corporations and thus negativity to them is negativity to government.

Government subsidized extortion isn't exactly playing by the WTO rules, and could be grounds for trade sanctions against the US.

So how does this play out over the international scale?

Re:So, this affects who exactly?

[joeyspqr]

So how does this play out over the international scale?

business decisions made with an eye to buying legislation and litigation choke off economic innovation . India and China become the loci of future IT developements. Europe muddles along like it has for the past 60 years, and we enjoy the great shakeout as gas prices rise to real levels and the loans come due.

sure feels like monday

Re:Lunch Threatened

[99BottlesOfBeerInMyF]

Keep in mind that the telcos OWN the internet roads and byways. I guess telcos are 'mad' realizing how much goods and $ are passing through those roads on a daily basis. Now, the telcos want a cut.

The telcos already charge people a toll to go down the road. They already charge different tolls for different types of traffic. What they want to do now is extort money from people who aren't their customers, but who have a vested interest in others using it. Think, "hey East-coast tourism industry, pay us a billion dollars or we'll jack up toll fees on your half of the country so much that people will go to the west coast."

Telcos aren't worried

[bberens]

Google Sue(tm) will be in BETA for at least there years.

Common Carrier Status???

[markw365]

If telco's and isp's start examining every packet to apply QOS to it, doesn't that exempt them from being a Common Carrier? The Common Carrier exemption they get is from not examining the traffic and just routing it. If they start looking at packets to apply prefered treatment to traffic, then they are no longer just routing. I would think they would loose their common carrier status and be liable for traffic traversing their networks.

Re:Google Doesn't Come To My House After A Storm

[cyber-dragon.net]

What I am amazed you have not picked up on is that the telco's are a government protected monopoly which your tax dollars subsidize. You are paying them an enormous amount in order to keep those lines up, personally. Even if you do not see it on your bill look at your taxes next year and wonder how much of that goes to SBC pretending to be AT&T or Verizon.

I will also use your analogy to explain how they have shot themselves in the foot, not Google or Skype. They rented you a government subsidized apartment (your phone/DSL line) but did so based on the assumption you would only live there a few days a month. They then rented the SAME apartment to 5 other people, collected rent from all of them (as well as the government subsidies) and prayed no one would ever show up at the same time and find out, nor would the government notice they had 50 apartments and 250 people registered to live in them. They extracted HUGE profits from doing this and sat back with their fat bonuses and laughed.

Now people have actually started to show up at the same time... they have started to notice that more than one person lives in their apartment and are complaining (not enough bandwidth). The telcos are then going to the government and complaining saying they cannot afford to house people at affordable prices any more and will have to charge their employers for the "privilege" of housing their employees close to work. If the companies do not pay this the telcos do not promise there will be no traffic jams and these employees will get to work.

At the same time they are going to the people complaining and saying "you wanted to live close to work didn't you? you don't want traffic jams do you? We are not going to put any money into increasing the infrastructure (the highways) as that would cut into our bottom line. Instead we are just going to find a way to charge your companies for your housing so we can add a few stories to existing buildings. Isn't that better than you paying for it? What? You want to start your own building and make a co-op to avoid our fees and actually have an apartment to yourself? Too bad, we already made that illegal so pay up and shut up and tell your employer to do the same."

There... now your analogy is complete :)