End of the Net Neut Fetish

What the Google-Verizon deal really means for the wireless future.

Historians, if any are interested, will conclude that the unraveling of the net neutrality movement began when the iPhone appeared, instigating a tsunami of demand for mobile Web access.

They will conclude that an ancillary role was played when carriers (even some non-wireless) began talking about metered pricing to meet the deluge of Internet video.

Suddenly, those net neut advocates who live in the real world (e.g., Google) had to face where their advocacy was leading—to usage-based pricing for mobile Web users, a dagger aimed at the heart of their own business models. After all, who would click on a banner ad if it meant paying to do so?

Thus Google and other realists developed a new appreciation of the need for incentives to keep their telco and cable antagonists investing in new broadband capacity. They developed an appreciation of “network management,” though it meant discriminating between urgent and less urgent traffic.

Most of all, they realized (whisper it quietly) that they might soon want to pay out of their own pockets to speed their bits to wireless users, however offensive to the net neutrality gods.

Hence a watershed this week in the little world of the net neut obsessives, as the realists finally parted company with the fetishists. The latter are those Washington-based groups that have emerged in recent years to gobble up Google’s patronage and declaim in favor of “Internet freedom.” You can easily recognize these groups today—they’re the ones taking Google’s name in vain.

The unraveling of the net neut coalition is perhaps the one meaningful result of the new net neut “principles” enunciated this week by former partisans Google and Verizon.

While these principles address in reasonable fashion the largely hypothetical problem of carriers blocking content and services that compete with their own, Verizon and Google insist the terms aren’t meant to apply to wireless. Funny thing—because wireless is precisely what brings these ex-enemies together in the first place. They’re partners in promoting Google’s Android software as a rival platform to Apple’s iPhone.

All their diversionary huffing and puffing, in fact, is a backhanded way of acknowledging reality: The future is mobile, and anything resembling net neutrality on mobile is a nonstarter thanks to the problem of runaway demand and a shortage of spectrum capacity.

Tasteless as it may be to toot our own horn, this column noted the dilemma last year, even forecasting Google’s coming apostasy on net neutrality. Already it was clear that only two economic solutions existed to a coming mobile meltdown. Either wireless subscribers would have to face usage-based pricing, profoundly disturbing the ad-based business models of big players whose services now appear “free” to users. Or Google and its ilk would have to be “willing to subsidize delivery of their services to mobile consumers—which would turn net neut precisely on its head.”

Our point was that the net neut fetish was dead, and good riddance. All along, competition was likely to provide a more reasonable and serviceable definition of “net neutrality” than regulators could ever devise or enforce. That rough-and-ready definition would allow carriers to discriminate in ways that consumers, on balance, are willing to put up with because it enables acceptable service at an acceptable price.

Even now, Google and its CEO Eric Schmidt, in their still-conflicted positioning, argue that the wired Internet has qualities of a natural monopoly, because most homes are dependent on one cable modem supplier. This treats the phone companies’ DSL and fiber services as if they don’t exist. It also overlooks how people actually experience the Internet.

Users don’t just get the Internet at home, but at work and on their mobile devices, and they won’t stand for being denied on one device services and sites they’re used to getting on the others. That is, they won’t unless there’s a good reason related to providing optimum service on a particular device.

You don’t have to look far for an example: Apple iPhone users put up with Apple’s blocking of most Web video on the iPhone because, on the whole, the iPhone still provides a satisfying service.

This is the sensible way ahead as even Google, a business realist, now seems to recognize. The telecom mavens at Strand Consult joke that Google is a “man with deep pockets and short arms, who suddenly disappears when the waiter brings the bill.” Yes, on the wired Net, Google remains entrenched in the position that network providers must continue to bury the cost to users of Google’s services uniformly across the bills of all broadband subscribers.

That won’t work on the wireless battlefield, and Google knows it. Stay tuned as the company’s business interests trump the simple net neutrality that the fetishists believe in—and that Google used to believe in.

Holman W. Jenkins, Wall Street Journal


Full article: http://online.wsj.com/article/SB10001424052748704164904575421434187090098.html