Money Matters - Simplified

Google and Verizon: Two Lone Gunmen for Justice


Verizon (NYSE: VZ) and Google (Nasdaq: GOOG) wrote another little piece of history yesterday. It's not the first time the two technology giants from different sides of the tracks make a joint statement about the future of the Internet, and it won't be the last. And it's critically important that they continue to step into the breach, as the rest of the stakeholders in the digital future of America are waffling around and getting nothing done.


The Google-Verizon framework for network neutrality policy is raising a lot of hackles right now. Observers like the Free Press coalition and technology news veteran Ars Technica tell us that "this is not real network neutrality" as the framework seems to give service providers too much freedom to do as they please.

Google is now officially evil, according to some of the critics. It's the end of the Internet as we know it -- how can you feel fine?

I don't agree with that point of view at all.

Wait, what?
The worst thing our technology leaders can do now is to just stand back and let the cards fall where they may. I'm disappointed in AT&T (NYSE: T) for not stepping up to the plate and making an effort to work through the complex issues of traffic management, who gets to control what, and how we keep the nation moving forward. Cisco Systems (Nasdaq: CSCO)could and should also do more here, though I can understand why the networking giant stays on the sidelines -- just throw more Cisco hardware at the problem until it goes away, right?

I could point fingers at other technology leaders caught standing with their hands in the pockets, but you gotta draw the line somewhere. Just know that I've got my eye on you, IBM(NYSE: IBM), and another on Microsoft (Nasdaq: MSFT). Feel free to spring into action any time you like, big boys.

By contrast, Verizon and Google are doing the right thing, and a very necessary thing, by addressing these problems in a format that takes both sides of the argument into account. Let Google and Yahoo! design the policy framework alone and the network providers might be left out in the cold, unable to compete or innovate. Give the reins to Verizon and AT&T without a balancing voice of reason, and the shoe goes on the other foot: then it'll be the network running the show while content publishers have to fight for table scraps.

When you shine both of those hard lights upon the network neutrality problem, you're bound to find a more even-handed solution. One crucial ingredient in this brew is encouraging the government to grab some powers of enforcement and oversight, keeping all the industry players on their toes.

The proposed framework is not perfect. The one point I disagree with (out of the seven presented) is the necessity to keep wireless networks out of the whole rulebook. Yes, wireless networks are still in their infancy and easily overloaded. No, that does not make them special. If the wireless Internet is the future, as everyone keeps telling us, then we shouldn't be satisfied with a toy version of the real 'net. Make it work or show me who can do it -- don't ask for exceptions to the rule to mask the network's deficiencies.

Don't stop now!
Verizon and Google keep refining their policy proposals, standing their ground to deliver version after version. Since nobody else is doing anything of note, save complaining over the few companies with the gumption to take action, you can bet that this evolving framework will make an impact on how our government ends up designing long-term policies in this field.

With a proper rulebook in place, and some muscle behind the FCC arm that's throwing it, America still stands a chance to catch up to the digital future being built in Japan, across Scandinavia, and in dozens of other places where people can point at our "broadband connectivity" and "freedom policies" and laugh.

Done right, network giants like AT&T and Verizon could differentiate themselves by offering unique add-on services, while always mindful that placing undue restrictions on the open Internet would drive customers into the waiting arms of somebody else. Google and Yahoo! -- and the next Google and Yahoo! -- will be free to innovate for a healthy network structure, as all the incentives will be in place to keep the proper investments coming.

I think the Verizon-Google proposal is an important step in this direction. And if my worst-case scenario plays out, with network providers teaming up in an ugly oligopoly (say that five times fast) that lets them abuse customers on both ends of the connection while making cheap profits for a while, the FCC will at least have the power to step in and fix what's broken.

© 2010 UCLICK L.L.C.