If you recall, the network neutrality debate truly
took off in the States back in 2005, when former SBC (now AT&T) CEO Ed Whitacre told Business Week
in an article that Google wanted to use Ed's "pipes", for free. "I ain't going to let them do that because we have spent this capital and we have to have a return on it," insisted Ed at the time. The comment confused a hell of a lot of people, given that both Google and Google's users already pay for bandwidth. To many, Ed's logic seemed to share a resemblance to the South Park underpants gnomes
It seems that Ed, lusting after Google's huge advertising revenue, figured he would please investors if he could somehow offload necessary AT&T network upgrade expenses on to, well, someone other than AT&T. In Ed's dream world, in addition to the bandwidth costs already paid by you and Google, you'd both pay the troll under the bridge
to use that connection. Why? Just because. Shut up!
While it's absurd to think someone should pay an already hugely profitable business an extra "because we said so" toll so they don't have to use existing
funds for infrastructure, Ed's point would become a core tenet in the church of telco-think. It would, over the next few years, be dressed up by lobbyists and PR gurus to resemble something vaguely resembling a coherent argument, used around the world
every time a telecom company wanted a slice of a content company's revenues. Enter the pseudo-scientists and public relations wizards.
Scott Cleland is a policy consultant paid
by AT&T, Verizon and Time Warner Cable to sell his client's Kool-Aid, and is frequently called to Washington as an "objective" industry analyst. As Cleland's blog attests
, his employers have him spending most of his time lately attacking Google. Why? Google has angered Cleland's employers, by advocating network neutrality and increased broadband competition while fighting metered billing. Why? So that Google can sell more advertisements to more people over a greater range of content delivery systems.
connections could be more affordable for everyone, if Google paid its fair share of the Internets cost.
With the network neutrality debate reheating in DC, and two of his clients busy trying to sell the public on the idea of metered billing, Cleland has presented a new twenty seven page self-authored research study
(pdf) that has taken Ed's original "free ride" premise to a new extreme. This time, with graphs!
According to Cleland's scientific-looking study, Google is using twenty one times the amount of bandwidth they actually pay for. The report claims that Google (or their users, the study intentionally fails to make the reference) consumed 16.5% of all U.S. consumer Internet traffic in 2008, a total Cleland claims will grow to 25% in 2009 and 37% in 2010. In contrast, the search giant paid $344 million in 2008 for bandwidth, or 0.8% of U.S. consumers flat-rate monthly Internet access costs of $44.0 billion. Cleland's conclusion from this data?
The core conclusion of the study is that any sustainable national broadband policy must ensure that the heaviest Internet users pay their fair share of Internet infrastructure costs. It is neither economically rational nor equitable for the biggest users of, and beneficiaries from, shared resources to not share fairly in the recovery of costs.
Google doesn't report how much they pay for bandwidth, so Cleland guesses by examining Googles 10-Q and 10-K filings with the SEC for 2007 and 2008. Google doesn't specify anywhere how much bandwidth is consumed by Google's webcrawling activities, so Cleland guesses there as well. The report then forgets that Google owns much of their own fiber, data centers and undersea routes while direct peering with many carriers, which oh -- kind of undermines Cleland's central thesis that Google doesn't contribute to the infrastructure of the Internet.
Most importantly the report ignores that consumers are paying for much of this bandwidth on their end too, which brings us back full circle to Ed's argument being dumb in the first place.
All noted, the report does a fantastic job of taking Ed Whitacre's confused, greedy ramblings made three years ago, donning them with a coat of pseudo-science, and representing it ahead of a rekindled debate over network neutrality before DC lawmakers. But it's not objective science, and shouldn't be treated as such. It's public relations, designed to vilify Google while fostering Ed Whitacre's dream of a future Internet where already very profitable companies don't have to pay for their own expenses, and everyone is double or triple billed.