By: Gigaom
Google should be ashamed for paying carriers to handle its traffic
It turns out that Google, the great proponent of net neutrality, is paying Orange to handle its traffic on the carrier's mobile networks. That's an unwelcome development, and here's why.

The concept of net neutrality means different things to different people. Some see tiered access pricing for connectivity as the key debate point, while others are more concerned with the idea of content providers having to pay network operators to carry their traffic.

I fall into the second camp for a variety of reasons, all of which have been brought to the fore by the revelation that Google is paying France Telecom-Orange to deliver its data to users. It’s not clear how much Google is paying Orange, or what the precise terms of the deal entail (I’ve asked both parties for clarity), but it does look like a line has been crossed. Here’s why that’s bad.

Google is rewarding greed

Telcos are very fond of complaining about the cost of building out modern mobile networks that can support the explosion in data traffic — despite the fact that mobile broadband usage is the carriers’ current cash cow. A group of European operators even tried (and failed) to get net neutrality banned globally, so that they could try getting content providers to pay for having their traffic reach the consumer in a usable state.

But this is not necessary. The carriers already make money off delivering data, and they make it from the consumer who signs up for a data tariff or pays by the megabyte. The content providers, meanwhile, already pay on their end to deliver that data – through their own internet service provider and/or through a content delivery network such as Akamai, and also through investing in private delivery networks.

If the receiving ISP wants more money on top of that, you’d think that they would provide extra value in turn. That’s not what’s happening here. So Google generates half the traffic on Orange’s network? That helps drive and develop Orange’s business, so it’s not something that should be penalized.

Google is abandoning its principles

Let me briefly pass the mic to one Eric Schmidt, who said back in 2006:

“Today the internet is an information highway where anybody — no matter how large or small, how traditional or unconventional — has equal access. But the phone and cable monopolies, who control almost all internet access, want the power to choose who gets access to high-speed lanes and whose content gets seen first and fastest. They want to build a two-tiered system and block the on-ramps for those who can’t pay.”

Those were the days. Fast forward six-and-a-half years and Google finds itself in a somewhat different position. The main agent of that shift is Android, which makes the company both a content and platform provider in a hugely competitive market.

The biggest gains to be made there lie in emerging territories such as Africa, where people are currently abandoning feature-phones for low-cost smartphones. When he revealed the hitherto secret Google deal this week, Orange CEO Stephane Richard was clear that his carrier’s strong position in Africa gave it the leverage it needed to extract cash from the U.S. firm. In other words, Google stuck by its principles until self-interest dictated otherwise, and in the process…

Google is messing things up for other content providers

As Schmidt’s words from 2006 make clear, one of the key attractions of net neutrality is the fact that both large and small players get equal access to the information highway. As he went on to say in that screed: “creativity, innovation and a free and open marketplace are all at stake in this fight”.

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.




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