November, 2009

As the lead bankroller of the "open Internet" slogan that the FCC now proposes to adopt as new U.S. policy without Congressional authorization, Google knows what an "open Internet" is supposed to mean: Google gets the benefits of the Internet without its costs. 

Kudos to Gordon Crovitz' WSJ column that highlighted the wisdom of Larry Downes, author of "The Laws of Disruption" who cut to the crux of the net neutrality debate in asking the simple pointed question: which is the bigger threat to the Internet -- the FCC or companies?  His answer: the FCC.

• Larry Downes: "U.S. consumers have plenty of reasons to be suspicious of both the FCC and the communications industry." His advice: "Consumers should ask themselves which of these powerful interests is more likely in the end to abuse its power. Who, in other words, has the greater potential to make things worse for everyone?"
• His answer seems sensible: "Absent any evidence of serious market failure yet, I'd much rather deal with the devil I know than a resurgent FCC."

eBay is licking their chops at the prospect of the FCC's open Internet regulations locking in their dominance of:

• Online auctions (95% share); 
• P-2-P voiceware (via #1 Skype's ~500m users); 
• Classified ads ( #1 in revenues); and
• Online payments (via eBay's #1 PayPal).

Like Google, eBay knows that "openness" is industrial-policy-speak for:

After discussing whether Google should buy the New York Times, Google decided against it because it "would damage its 'neutral' identity", per Ken Auletta's just-published book "Googled: The End of The World as We know It." 

1.   Why has Google been so hostile to protecting brand trademarks that companies have had to resort to suing Google to get any satisfactory brand respect?  

2.   Why is Google's Chrome browser so hostile to brand-marketing? 

• If a user types in a company brand name as a www. ... .com URL into Chrome's "Omnibox," Google's browser always takes the user to Google's copy of the website first and not to the requested company's branded website where the brand-company can benefit from the visit or click-thru information that their brand advertising has earned.
  • In other words, is Google leveraging its fast-growing, Chrome browser technology, used by 30 million people, to become a gatekeeper for harvesting branding online? 

3.   Why is Google's  AdWords "Quality Score" policy so hostile to online brand marketing? 

In discussing Google's new "Privacy Dashboard," Fox Business' Neil Cavuto asked Google CEO Eric Schmidt about the ability to delete private information.

• Mr. Cavuto: "How do I know you are deleting it?
• Mr. Schmidt: "Because we say so."

Not being one to accept Google's legendary PR spin without a grain of skepticism, lets review the real significance of Google's new "Privacy Dashboard."

First, to be fair to Google, the privacy dashboard is indeed an incremental improvement over what Google users had before, because it aggregates what was in 21 different places before, into a single more convenient "dashboard." 

To see "smoking gun" proof that "net neutrality" is a made-up issue and argument, read the short but telling excerpt below from George Lakoff's Book: "Thinking Points" published October 3, 2006, when the only net neutrality incident at that time was the FCC's Consent Decree with rural telco, Madison River Communications in February 2005.  

From Thinking Points, Chapter 8, The Art of Arguments:

"Thus, the argument for Net neutrality becomes an argument for government regulation in this form by the FCC.

Google's acquisition of AdMob, "the world's largest mobile advertising marketplace," will receive serious antitrust scrutiny focused on whether the deal lessens competition by extending search advertising monopoly to mobile devices. 

• Expect the review process to be a magnet for a host of antitrust, competition, and privacy product/services concerns much like the proposed Google Book Settlement has been a magnet for antitrust, competition, and privacy content concerns. 

First, Google is misleading with its blanket statement: "We don't see any regulatory concerns with this deal." 

Google's secret algorithm discriminates in favor of The New York Times per a Politico video interview with Ken Auletta, author of the new book: "Googled, the End of the World as We Know It."

Mr. Auletta explains what he learned about Google's secret search algorithm. It favors sites/results based on "wisdom of the crowds" (i.e. most traffic or links), but it also favors authoritative sites like the New York Times, because Google grants them extra ratings points that elevate them in Google's search results.  

• Mr. Auletta goes on to defend Google for keeping the algorithm and the extra ratings points secret in order to prevent others from gaming the system. 

This information that Google proactively and specifically discriminates in favor of certain content over other content is a big deal for several reasons.

Google and eBay are planning to operate non-neutral broadband ISPs, Google at 47 airports, and eBay on airplanes, that will discriminate against some content for the benefit of their preferred content -- per a story on CNNMoney.com.

This puts the FCC in a pickle concerning its proposed open Internet regulations.

• First, it shows the ease for Google and eBay to enter and compete in the broadband market; where's the supposed market failure?
• Second, two of the biggest complainers seeking mandatory net neutrality regulations of broadband providers (including wireless for the first time) because of the potential for discrimination, are actually planning to engage in the very non-neutral broadband behavior that they want banned.

The open question is will the FCC be fair and technologically neutral in preserving the open Internet?