It’s not often that a company wins the triple-crown like Google did in its recent “agreement” with Verizon regarding net neutrality. But, then again, it’s not often that the FCC is betting so publicly for a particular company’s horse as the FCC has been with Google and net neutrality. So what are the three wins for Google?
First, the agreement states clearly that the FCC “would not have any authority over Internet software applications, content or services.” As I’ve noted before, Internet software applications, content, and services “have as much potential to prevent consumers from enjoying the protections of the existing Internet principals as ‘broadband Internet access service’ providers.” Indeed, Google, with over 80% of the search engine market, has much greater potential to block consumer access to the Internet sites of their choice than does Verizon, who has a paltry 3.6 million FiOS Internet subscribers and “continues to bleed landline and DSL customers.” Google was nevertheless able to get Verizon to agree that Google remain completely free from any of the net neutrality regulations to which Verizon itself would be subject. That’s a significant win in any book.
Second, the agreement’s “non-discrimination” provision presumptively prohibits the prioritization of traffic. This is a significant competitive victory for Google, because Google already prioritizes its own traffic via its own content delivery network. “If Google were an Internet service provider, it would be the fastest growing and third largest global carrier, says Craig Lebovitz, Arbor Networks chief scientist.” Google uses its extensive content delivery network to speed the delivery of its packets – like YouTube – to end users. To compete with Google, competitors would need access to similar prioritization capabilities. Fortunately for Google, Verizon just agreed not to use its resources and expertise to help even track conditions for Google’s competitors. Win number two for Google.
Third, Google agreed that only the transparency principle would apply to wireless networks. On its face, this looks like a win for Verizon Wireless. But it’s a Pyrrhic victory. Google has nothing to lose in forswearing regulation of wireless because the wireless industry is incredibly competitive – and that competition ensures that wireless service providers can’t engage in discrimination that is harmful to consumers (without risking serious subscriber losses). And, with the recent success of Android and Google’s takeover of AdMob, Google is in a better position to leverage power in the wireless market than Verizon Wireless. When your operating system is increasingly powering the smartphones consumers are using to access the Internet, you have a virtual monopoly on mobile advertising, and the market power of network operators is constrained by competition, why would you want increased federal oversight? On balance, leaving wireless out of the net neutrality race is another trip to the winner’s circle for Google.