An Internet Tipping Point: Google Pays for Stuff

January 19, 2013

I don’t know if the news stories are true. I want to offer some observations before I forget them, however. First, read “Orange Boasts: We Made Google Pay for Us for Traffic” and the pundit analysis in this story, “Google Should Be Ashamed for Paying Carriers to Handle Its Traffic.”

In my personal experience, Google is an abstemious outfit. The firm has money, but it does not want others to get that money. If this is not your experience, my personal experience is an anomaly. That’s what makes horse races semi-interesting.

The point of the boasting story is that the France Telecom-Orange was able to get some money from Google. I find the French generous, open, and delightful. Therefore, I have some confidence that somewhere along the line, money changed hands. I believe that the French were on the receiving end of the payment for a number of reasons. Some have to do with legal issues, some with France’s correct perception that it must retain control of some aspects of intellectual life, and some with what I find as the warp and woof of Frenchiness.

Here’s the passage I noted:

what’s interesting here is Google paying actual money to France Telecom-Orange for the delivery of its data, which apparently now constitutes half of that consumed France Telecom-Orange customers around the world. “They pay us for the traffic that they send,” the company reaffirmed to El Reg when we checked, saying that the deal had been in place for at least a year and that the money is spent maintaining the network, implicitly ensuring that customers get quick access to Google content. Telcos have long said that Google and its ilk should be paying them to expedite delivery, and in the US Google managed to get (net neutrality) legislation passed, making it illegal to prioritise traffic, but Europe has been slower to jump to the Googleplex tune, so paying for access is easier.

The poobah write up focuses on shame. I am not sure how shame factors into business decisions by Googlers who much prefer math, market dominance, and ad revenue to the types of emotion my boxer Max shows when he snags a chicken leg from the picnic table. Max looks guilty but he drools. Money, chicken—both may work in a similar manner.

Here’s what the poobah offers:

This is really all about barriers to entry. If Google is paying a carrier such as Orange to handle its traffic better than it might otherwise be handled, then Orange has the incentive to demand the same from other content providers. Even if it does not, we hit the problem of telecoms network capacity being a zero-sum game – if it weren’t, Orange wouldn’t have any leverage here, short of blocking Google outright. In other words, Google has not only set a terrible precedent for up-and-coming mobile innovators, but it has also made it more likely that the quality of new services will be degraded over Orange’s networks — all so that the quality of Google’s services can be maintained. It’s probably not a deliberate tactic on Google’s part to disadvantage potential rivals, but it could sure work out that way. And for that alone, Google should hang its head in shame.

You figure out for yourself what the Google is doing.

My observations, before they slip from my 69 year old brain, are:

  1. Google has money. Google will use the money to get access, traffic, content, preferential treatment, and a good seat at a nice restaurant in Lyon.
  2. Companies without money or who are slow to write checks will be helping Google become the Internet. If money delivers access, Google can become more of the Internet than it already is. (I wrote about queries processed for mobile carriers which do not “go” to the public Internet. Google helpfully reduces latency with its nifty system. Google Version 2 is out of print, but perhaps someone will post a copy on a public download system. I don’t even have a copy anymore. Bad data management when I was incapacitated. The teenagers working for me don’t check their back ups. Sign.)
  3. Unless other competitors figure out how to get treatment comparable to Google’s when it pays money, those competitors are going to face hurdles different from those Google raised in 2001 to 2006. In short, the competitors will have to work harder to stay in the race.

Net net: If these stories are true. Google is now taking steps to become the Internet. Google can just pay whatever it takes to ride in first class. Maybe Google will own the jet? Why worry? I love Google.

Stephen E Arnold, January 19, 2013

Comments

Comments are closed.