The responses to the tag-team proposal/ announcement by Google and Verizon yesterday continue to pour in – few of them favorable. Again we depend on the Huffington Post for providing a useful synopsis of reactions across the media world. We noted Craig Aaron’s reactions on SaveThe Internet.com yesterday, and he has weighed in with a today. Though his analysis of the loopholes Google & Verizon are attempting to open for themselves is worth reading, his countermove is precisely the one we noted yesterday is the one most likely to fail:
If there’s a silver lining in this whole fiasco it’s that, last I checked anyway, it wasn’t up to Google and Verizon to write the rules. That’s why we have Congress and the FCC.
Perhaps for an election cycle or two. But with corporations allowed by the Supreme Court to give unlimited amounts to political campaigns and candidates…?
Today, though, we would like to suggest a couple of ways to think about the issue of net neutrality, or the ways to think about how the net is going to be tiered and controlled over the next few years. Please bear with the mundane analogies…
If we think of the internet streaming into our homes in similar ways we think about water streaming into our homes, it might demystify some of what is at play, and what is at stake. When your municipality pumps water to your home, you pay for it. Your money keeps up the infrastructure to ensure water keeps flowing. How you use that water once it passes your meter is immaterial to the utility. You can stream the water directly into a bathtub or spray the water all over your carpet and furniture for all the utility cares. You are only paying for the amount.
Replace ‘stream the water into a bathtub’ with ‘plug a network cable into your computer’ and ‘spray the water…’ with ‘plug the cable into a wireless router’ and the model remains essentially the same, except for one thing: you pay a flat rate to your ISP, whether you make a quick check of the weather every couple of mornings or stream full-length movies from Hulu.com every night. An early effort to reconsider net neutrality (really: ‘price equality’) was to argue that those who use the service more should pay more – just like the water. Indeed, such a view of net neutrality was presented by David Indiviglio late last week, and AT&T has been gearing up a tiered payment plan for smartphone users for couple of months now. The reaction has not been nearly as heated as toward the Google/Verizon announcement – we think because most everyone is comfortable with the notion that if one uses a product more, one should pay more.
What is stake with the Google/Verizon proposal, however, is not about customers choosing how much they use. It is about how much ISPs will control what the users get. Returning to our water analogy, imagine a world in which water from a certain reservoir is given priority delivery to your house because the utility cut a deal with the folks who live around that reservoir. You need not take that particular water, but you have to pay the ISP to get other water, or you can have your water pressure throttled back. In either case, note that the utility/ISP calls the shots and the customer responds – assuming the customer is paying careful attention to something as vast and fluid as the internet. This model runs counter to most any capitalist ideal/economics textbook in which the customer is king of the marketplace and the provider tries to match and sway the customer’s wants. Instead, the provider tells the customer what s/he can have based on the deals the producer and provider make – a deal that squeezes out competitors before they can get to the market.
Which is why we believe the analogy with the water supply is apt in another way – a way that this blog has discussed in the recent past. One can not really enter a competitive market for water. No series of competing waterways exists under the city streets with a bunch of competing providers hoping to convince you their water is better than their competitors. Thus municipalities regulate water through a publicly owned utility because competition is impractical in this instance. Such is not true of the internet, especially of the burgeoning wireless services (the very ones Google/Verizon want to distinguish for special pay structures), where competing networks can all bounce around the neighborhood and one can buy a service account and password on the service one chooses. So what larger ISPs have sought to do is limit competition by blocking small-business entrants and/or by not investing in infrastructure in regions of the country deemed not profitable. So, just like water, you won’t really have a choice of going to a bunch of competing services. But unlike water, no one really has the authority to act as watchdog and consumer-protector over the burgeoning wireless internet world. After the Google/Verizon announcement, the FCC seems to be trying to find ways to appear shocked, shocked!, at the announcement, even as it walks away from any practical statement about what it will do about the situation.
The statement from Google/Verizon is a proposal. Just a proposal (a point even the ardent critics admit). But so much of the real infrastructure and political influence seem to be in the hands of just a few of such companies that one need not be an Orwellian fear monger to believe that the proposal will become the policy sooner rather than later.