Google – Verizon Deal
The big news this week in the Telecom market is about the Google-Verizon deal that supposedly threatens Net Neutrality. Google CEO Eric Schmidt explained Google and Verizon’s position on Net Neutrality, saying
“I want to make sure that everybody understands what we mean about it. What we mean is that if you have one data type, like video, you don’t discriminate against one person’s video in favor of another. It’s OK to discriminate across different types…There is general agreement with Verizon and Google on this issue. The issues of wireless versus wireline get very messy…and that’s really a Federal Communications Commission issue, not a Google issue.”
The FCC it is believed is working on formalizing regulations for the deal and will come up with the same soon. The statement from the FCC chairman was encouraging as he said,
“Any outcome, any deal that doesn’t preserve the freedom and openness of the Internet for consumers and entrepreneurs will be unacceptable”
The Obama government and the FCC are pushing for net neutrality, but a recent ruling by the courts in the Comcast – FCC case suggests that the judiciary might not agree to this. Lots of stories about the deals are doing the rounds and like many others I would like to believe that Google, which has created its huge fortune based on Net Neutrality will not undermine it yet.
What is Net Neutrality?
Net Neutrality means that any packet of data passing over the internet has the same right to bandwidth as any other. This ensures that every website and every “Type of Data” on the internet has the same right to bandwidth.
Possible Implications of the Google-Verizon Deal
Dynamic charging introduced by Mobile Service Providers helps to improve bandwidth utilization and manage traffic. It has been generally observed that ISPs introduce some or the other form of discrimination to incentivize customers to surf some sites more than others. But till now, there have been few instances of the same getting reflected in business deals between ISPs and websites.
Google and Verizon, it seems have proposed a tiered system that helps discrimination based not on websites, but datatypes according to the statement by Google CEO. This implies that Verizon might want to create a system wherein videos are streamed faster as compared to data. This in turn will most definitely encourage higher video based traffic, resulting in better revenues for Verizon adding up to what it will receive from Google. And as far as Google is concerned, it will have a larger number of customers on Youtube due to faster speeds. It also seems that the deal will affect WiFi and mobile surfers surfing the internet on Verizon’s 3.9 G LTE enabled network. Details though are scarce.
Such a move has long been warranted, with the huge explosion in internet traffic and the seemingly insatiable demand for higher bandwidths. It might just come to a point when ISPs will allow consumers to access their pick of websites at the fastest speed and the rest much slower. The consumers benefit and so do the ISPs because of their deals with the websites in protecting for protecting the websites’ clientele.