In the CNet story, the idea was put forward that Google was planning to set up its own telecommunications network, that maybe it would start a VoIP service based on Google Talk, and so on. There have been other stories too, including this one from ZDNet in 2005, which also mentioned the VoIP idea, and this one in 2006 — which proposed that Google was planning to use the bandwidth for something related to IPv6, or maybe VoIP, or maybe a grid computing network.
Om Malik wrote a piece in 2005 for Business 2.0 about how Google could build its own backbone, which he called Googlenet, and then use that to cut the costs it was paying to ISPs for peering arrangements to carry its data — and could also offer its own Internet access by blanketing various centers with free Wi-Fi. He and Cynthia Brumfield at IPDemocracy both mentioned that Google was taking bids for a nationwide optical network.
Cringely’s idea is that Google wants to effectively become the world’s largest ISP, and that as video and other applications suck up bandwidth, smaller ISPs who are losing money will effectively sign over their businesses to Google. I think it is more likely that Om is right — and so is this guy over at Slashdot — and Google is simply engaged in hedging. In other words, it is expecting peering costs to rise (especially so if net neutrality rules are not adopted), and so it is buying up as much bandwidth as it can to keep its costs low.
According to BellSouth chief technology officer Bill Smith, the company is justified in content charging companies because they use the telco’s network without paying for it. “Higher usage for broadband services drives more costs that we have to recover,” he told Marketwatch. Is this a justifiable cost-sharing exercise by a phone company, or what Russell Shaw of ZDNet calls “a shakedown?” Are BellSouth and other telco leaders — such as Ed “Google better pay up for our pipes” Whitacre of AT&T — just trying to make a living, or are they robber barons, as Jeff Jarvis calls them?
Mark Cuban, in his usual contrary fashion, says we need the telcos to do this because we are running out of bandwidth, and besides, it’s going to happen anyway. I find it hard to believe we’ve run out of bandwidth already, given the millions of miles of fiber-optic cable that Level 3 and 360networks and Global Crossing laid during the last tech bubble, but I’ll give Mark that one. What I don’t get is how the telcos keep telling everyone how great high-speed is, and charging them an arm and a leg for it (while trying to get them not to use it) and then start crying poor. Is it jealousy, as Fred Wilson says? Whatever — it’s wrong.
For more, check out a long treatise on the subject by Doc Searls, and another (shorter) one by Mitch Shapiro at IPDemocracy — who has another one here. My friend Rob Hyndman has also commented many times on this theme, including this recent post, and Om has some thoughts as well.
Jeff Pulver has come out with a couple of pointed posts on this topic, including one about neutrality in general, in which he calls on Google to shut down BellSouth in an OK Corral kind of maneuver (which my colleague Mark Evans applauds), and another responding to Mark Cuban’s post, in which he takes the billionaire to task for his views — and Mr. Cuban responds in the comments.
It may not be the aggressive gesture Jeff was hoping for, but Om Malik notes that Google has said in no uncertain terms that it has no intention of paying telcos for enhanced service. “Google is not discussing sharing of the costs of broadband networks with any carrier,” a spokesman told networkingpipeline.com
“Q. How concerned are you about Internet upstarts like Google, MSN, Vonage, and others?
A. How do you think they’re going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes? The Internet can’t be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!”
That’s a nice try, Ed. You may not be the only one to try that kind of thing, but let’s see you try to block access to Skype or Gmail unless someone pays up. And don’t large bandwidth users pay for traffic carried on a cable or telecom network already? SBC’s new business model sounds a little bit like extortion to me. Former Release 1.0 editor Kevin Werbach says we should be afraid. More discussion on the Interesting People list.
Update: The Washington Post has a story criticizing Ed, in which an SBC spokesman does some serious backpedalling on the whole arging-chay for andwidth-bay thing.