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Google, Microsoft and Yahoo looking to bypass Net Neutrality with money

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Google, Microsoft and Yahoo looking to bypass Net Neutrality with money

Mountain View (CA) – Three of the biggest advocates of Net Neutrality – the idea that all network traffic is given equal weight for distribution across the web – are now backing out of those positions and adopting a “pay for special services” attitude. Google is the most vocal advocate, while Microsoft and Yahoo have silently retreated by forging special alliances with phone and cable companies to give their data priority relay, according to the Wall Street Journal (WSJ).

Google, Microsoft and Yahoo are not the only former backers of Net Neutrality to now be considering other options.

During Barrack Obama’s presidential campaign, while on a Google campus stop, he was quoted as saying “Once providers start to give privilege to some Web sites and applications over others, then the smaller voices get squeezed out. And then we all lose. The Internet is perhaps the most open network in history, and we have to keep it that way. I will take a back seat to no one in my commitment to network neutrality.”

Stanford Internet Law Professor and Obama advisor, Lawrence Lessig used to be a staunch advocate of Net Neutrality. He, too, has changed his position, softening on the idea of special fees for special high speed service. He’s now quoted by the WSJ as saying, “There are good reasons to be able to prioritize traffic. If everyone had to pay the same rates for postal service, than you wouldn’t be able to differentiate between sending a greeting card to your grandma versus sending an overnight letter to your lawyer.”

Skip ahead in line

Ben Scott, policy director of Free Press in Washington D.C., says, “What they’re talking about is selling you the right to skip ahead in the line. It would mean the first part of your business plan would be a deal with AT&T to get into their super-tier – that is anathema to a culture of innovation.” Scott is referring to the idea that established service could potentially be forced upon the population regardless of new innovations by smaller startups which may meet consumer’s needs better.

“Ma Bell,” the U.S.’s long time monopolistic phone company, has had rules in place which have prohibited this very thing. No public call preference was given and all calls made, whether they came from the governor’s office or Grandma Nelly down the street, all had equal chance of getting through, according to the WSJ. And, when the Internet was becoming popular the same rule of thumb applied to all such traffic. And now, that appears to be changing.

Network upgrades cost money

One issue at the heart of Google’s recent decision to back away from Net Neutrality is the realization that Internet bandwidth needs are growing exponentially. As broadband Internet becomes more and more available, and consumers are able to spend more time online realizing what they can do with that bandwidth, the traffic has increases from 3.2 PB per month in 2007 to nearly 11 PB per month in 2008. Internet providers say they need to increase revenues to keep up and buy the new equipment needs for continued growth.

Google (and Microsoft and Yahoo) believe they can help with those costs by paying for premium “fast lane” Internet traffic service, thereby reducing the increased costs consumers would pay for the upgrades.

Internet is big, big business

Google is currently valued at just under $100 billion dollars (which is down from more than $200 billion one year ago.) Cisco, Microsoft and IBM are all valued well over $100 billion. Earlier this year, Microsoft offered $44.6 billion to buy Yahoo (which is currently valued at about $18 billion).

To put the financial position of Google, Microsoft and Yahoo in perspective, Intel (the largest chip maker in the world) is valued at around $82 billion (with $15 billion cash on hand). GM and Ford at their peak this year were valued at a combined total of $39 billion (currently valued at $3.5 billion). The entire U.S. Steel industry was valued at $57.5 billion in 2007.

When it comes to paying for services, Google, Microsoft and Yahoo believe that if you have the money to buy preferential treatment, and it’s good for their business, then why shouldn’t it be that way?

Update: 5:42 pm EDT: Google stands by net neutrality promise