23 October 2009

Google and Verizon

This joint statement is interesting less for what it says than for who is saying it (see also this item).

We can frame the net neut discussion as a faceoff between application providers and network operators about who gets to pay (and how much) -- i.e., we frame it as a problem in political economy. In that world, Google is the 800 kg gorilla amongst the apps provider and Verizon is the 800 kg gorilla (at least for a significant fraction of the US population) amongst the operators. An agreement between these two is likely to set the tone for the rest of the community (the joint statement is far from an agreement).

This is eerily reminiscent of the bargaining that took place between the Associated Press and Western Union in the 1860s. At the time, AP was WU's biggest customer, so AP had the traffic to build their own telegraph network; WU had the local resources (in telegraph operators) to build their own news agency. The agreement between the two was basically an agreement to not compete with each other in their core markets.

Is this shaping up to be a similar business arrangement? Are there parallels worth considering or is the WU/AP analogy worthless?

1 comment:

Robert Cannon said...

History is a cycle which repeats itself. What has been unfortunately, I think, in much of the policy discussion is the mythical perception that network neutrality - like the Internet - is entirely new under the sun. In reality, we have been here before. We have a well versed history of communications carriers - the very important role they have played in our society - and the associated policy. We would do well to pay more attention to history.