Peter Kafka

Recent Posts by Peter Kafka

Google, Verizon Announce a Cake-Having, Eating "Policy." But It's Not a "Business Arrangement."

The Google and Verizon plan that the New York Times reported on last week is out. And, as Google and Verizon have said, it’s not what the New York Times had reported: A pay-to-play arrangement where Google gets the ability to speed its stuff across the Web by paying a premium.

Instead, it’s a three-tiered policy proposal–and absolutely not a “business arrangement,” the two sides insist–that will both mollify “network neutrality” advocates and worry them.

You can read the full thing here, and see Google and Verizon’s explanation of the policy/plan below. The fast version:

  • The Web stays open, everyone gets treated equally–everyone with “legal content,” that is–and Google won’t be paying to move its stuff faster than the competition. It’s what everyone who says they care about network neutrality demands.
  • But! Verizon and/or others telcos/cable guys/ISPs want the right to build and/or use “new services.” And those could have different rules.
  • And! The open Web policies described above are for “wireline” services–i.e., pipes and cables into your home or office. But wireless broadband is a different animal. And it would have different rules, too.

The second and third points, of course, are where things will get sticky. The Google/Verizon statement is intentionally vague about what these new services would be and who would build them and what would be on them. But in the conference call to explain the statement, reporters immediately began referring to the “new services” as a “private Internet,” and I bet that name will stick.

Google CEO Eric Schmidt, for his part, insists that his company wants no part of the “private Internet” or whatever it is that may or not be built. Google “likes the public Internet,” he said, and later upgraded his affection to “love.” And asked repeatedly whether Google would use any of the new services, he repeatedly said no.

Which makes it appear as if Google has made the following trade: Give us unfettered access to whatever we want on the public Web, and we won’t squawk about secondary services you build on your “private Internet.” Which we’re not calling the “private Internet” and we’re not going to use anyway. And when it comes to mobile, well, that’s a different discussion.

There was very little discussion in the press Q&A about wireless, which is odd, given the amount of time my colleagues (and our readers) spend obsessing about the iPhone and Android and the BlackBerry, etc., etc. But surely we’ll hear more soon enough.

Meantime, what about the thing-that-doesn’t-exist-and-is-not-a-private-Internet? What are you supposed to do with it anyway? Especially, since, according to Schmidt, you won’t be using it for Google search or to watch YouTube clips?

The policy statement offers some suggestions: “Health care monitoring, the smart grid, advanced educational services, or new entertainment and gaming options.” Okay, but aren’t all of those things best used on the Web–the “open Web,” that is–anyway?

And here Seidenberg is quite vague. On two separate occasions, he suggested that the “private Internet” might be a good place to stream 3-D video. But surely he’s thinking about uses beyond “Pirhana 3D.”

But for better or worse, all of this is going to get thoroughly vetted in Washington, so I’m sure we’ll hear more about in the future. For now, enjoy your open Internet!


Google and Verizon are about to conduct a joint press conference, presumably to explain what the two companies are and aren’t doing with regard to network neutrality.

Last week, the New York Times reported that the two companies were working to push forward legislation that would allow Internet service providers to prioritize certain traffic on their wireless networks. Verizon and Google, in unusually loud proclamations, said the Times got the story wrong; the Times said it was sticking by its story.

Verizon and Google both plan to publish statements on their public policy blogs at 1:25 pm Eastern, and the call with Google CEO Eric Schmidt and Verizon CEO Ivan Seidenberg is scheduled for 1:30. I’ll cover it live here:

Live Blog

1:28 pm: Waiting on the promised policy blog posts. Nothing yet. *Unless Google and Verizon are conspiring to keep my computer from getting the information!*

Verizon blog now sputtering, gurgling. Perhaps something’s about to emerge…

Well, if you’re bored, here’s a Tom Petty video.

1:36 pm: No blog statements, but call is starting anyway.

Here’s Schmidt, introducing Seidenberg and their respective public policy chiefs.

Over past years, to Schmidt’s surprise, VZ and GOOG have found “more and more” that they agree w/r/t public policy.

Google needs investment and infrastructure that VZ and telcos provide; he hopes they need Google and others software..

So public policy statement coming.

But first more about Google: Open internet very important to us. Google has has enough money to get whatever it needs on the Web, but next generation of companies will need access to open Internet.

Schmidt: Lots of chatter and reporting about this since last Thursday, “Almost all of which has been completely wrong”, even though we love “sophsticated critcism.” So please read what we have to say before you talk or type.

Here’s the link. Schmidt summarizing but I’m linking. So you’ll have to read for yourself…

Seidenberg finishing up list of talking/policy points that Schmidt started. But trying to paraphrase what he’s saying nearly impossible, since it is laden with legalese and is oblique (intentionally so, I assume). So going to hang tight for a minute.

Seidenberg. “Why now, why Google”? “This debate has been somewhat hijacked by a lot of discussion and issues that are not really reflective of what the company is doing”…
So….”we agree with Google” that proposal is to “follow a consumer-driven orientation”. Ugh. Such non-language.


Q on principle six. What does that mean? Would it mean that Google, using Android phone, on a non-public Internet, could buy up capacity to offer YouTube on Fios at a better price or speed?

Seidenberg: I think the answer is “no”. But let’s explain this. “There’s no paid priortization that would come from Google over the Internet, period.” BUT. If google or someone wants to bundle a new service with new features and that was transparent to everybody, that would be permitted.

Schmidt: Right!

Q: But you could have YouTube channel on Fios, right?

Seidenberg: Sure.

Schmidt: We wouldn’t do that. “Google likes the public internet”

Q: Richard Waters from the FT seems to be underwater.

But Seidenberg thinks he can hear him. We couldn’t degrade capacity of public internet in order to build up private capacity. We’ll start out by serving public internt. But if we have additional capacity we’ll build out both.

Q: What’s your incentive for building out public internet.

Seidenberg: “So many ways” to monetize growth.

Schmidt: Verzion and others have incentive to make pubic internet more useful, “simply because it’s what their customers want”. And there’s enough excess supply to build both. And we’ll make sure that they follow up on these promises.

Q: And to be clear – Google, including YouTube, will always be on public internet?

Schmidt: Yes.

Q: Someone from Reuters, speaking very quietly.

Schmidt: “There is no business arrangement.” btw us and Verizon. Want to be very clear that those reports (in the Times) were “false, misleading and incorrect”.

Seidenberg: “There is no business arrangement”

Q: Talks with FCC?

Both Schmidt and Seidenberg. Yeah, we’ve talked to them.

Seidenberg: We’re doing this call now to clear up erroneous reports.

Missed a question. Apologies.

Q: Please talk more about the alternative non-public internet thing you’re talking about is. What is it? And why not run it w/same rules as public internet. And Eric, are you really sure you won’t use this thing?

Schmidt: Nope. We won’t’. “We love the public internet”

Seidenberg: We’re not saying there’s an alternative internet or that we’ll build it. But if someday someone builds it, we’d like to be able to use it.

Q: OK, so what would an entertainment service on this non-public Internet be like?

Seidenberg. I’ll give you an answer “and then you’ll trivialize it”. But! Let’s say the Metropolitan Opera wants to do 3-d broadcast. Maybe they don’t want to use the public internet for that.

Q: I know there’s not a business arrangement. But why do it behind closed door?

Schmidt “This is not a deal. This is a joint policy announcement”. It’s in everbody’s interest to follow the policy, and that’s what we’ll do.

Seidenberg: “Ditto!”. And of course, we’ve talked to others as well. Carriers, folks in government, etc.

Q: All of these services (like video) are moving into IP networks, which is the Internet. So what wouldn’t be in included in the public internet here?

Seidenberg: Do you think 3-d should go over the internet? Then recites talking points from memo again. “It’s not that difficult” to understand.

Schmidt thanks everyone for getting on call (No problem!). And thanks for Verizon management for their help on this, because it’s a really big deal for everyone in the United States.

Call ends.

[Image credit: James Thompson]

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