Verizon Threatens Google's 'Free Lunch'

ILikeRed writes to tell us the Washington Post is reporting that Verizon is becoming much more vocal about internet firms using "their" lines to do business without paying extra. From the article: "The network builders are spending a fortune constructing and maintaining the networks that Google intends to ride on with nothing but cheap servers," Thorne told a conference marking the 10th anniversary of the Telecommunications Act of 1996. "It is enjoying a free lunch that should, by any rational account, be the lunch of the facilities providers." This, as lawmakers are approaching new legislation that could let telcos charge internet companies much more for the use of high speed connections.

Free Lunch?

Free lunch? It seems like it's neither free as in beer nor speech. As all /.ers know, there is no other kind of free. I'm sure Google's network bandwidth fees are neither free nor small and I know I pay for internet access. So who's getting what for free? Maybe the telecoms are using that little-knownrhetorical device called hyperbole. Or perhaps they are trying to say that companies like Google have found a moreprofitable use for bandwidth than they have and they would like apiece of the pie. A free piece of the pie.

Do google pay for bandwidth?

I know some organizations essentially dodge bandwidth charges by running their own connection to major peer points.

The bbc [bbc.co.uk] certainly use that approach in the UK to keep their costs affordable.

However in that case, then they are doing part of the ISPs job so it seems fair.

Re:Do google pay for bandwidth?

No, typically no money changes hands at peering points. Peering is the mutual agreement between two networks to share traffic. Typically this is because the the two networks believe that they will exchange traffic on more or less equal levels (in the case of ISP peering) or one of the networks wants easy access to something the other network has (as is the case with content providers such as the BBC peering with an ISP, the ISP's subscribers get access to the BBC content without having to go through transit routes that the ISP has to pay for).

Re:Do google pay for bandwidth?

No, typically no money changes hands at peering points.

But this is a contractural problem, not a legal problem. If Google peers with Verizon don't charge Google then that's their own fault for writing the contract in that way. They could write a contract requiring Google to pay for the peering (and Google has every right to refuse to sign the contract and thus the traffic will be transited through another network instead of peered directly).

However, the ISPs are pushing for _legislation_ rather than just changing their peering contracts. The implication is that they want to be able to charge content providers who they aren't peering with (and thus have no contract with). I.e. if Google is connected to an ISP called "foo" and Verizon is connected to "foo" then "foo" can route the traffic between Google and Verizon - there is no contract between Google and Verizon and each of them is paying "foo" for a transit agreement to route the traffic. In this case, Verizon's _customers_ are paying for Verizon's transit agreement with "foo", but Verizon wants to be able to charge Google too. This seems wholley unfair since Google is having to pay for it's transit agreement with "foo" too.

This is just another example of bad laws being pushed so that greedy corporations can charge parties they don't have contracts with without losing their common carrier status. (At the moment Verizon could block Google's traffic and require Google to sign a contract in order for them to carry it, but that would prevent Verizon from being considered a common carrier since they would be censoring content).

Re:Do google pay for bandwidth?

since they would be censoring content

This phrase struck me as particularly poigniant (sp?). Up until now I had simply been infuriated by the assumption that Google and I got internet access for free. Hell, my fees are around $50/month, and I'm sure Google's fees are in the tens of thousands a month. Some free lunch.

But it hadn't really struck me yet that this was censorship wrapped in greed. A company wants more money for nothing, and therefor plans to limit my access to information as a way to basically extort money from other companies.

It really boils down to the one that suffers is the home user. Google can pony up, but may not out of protest. But when all this bullshit about free lunch and Verizon being wronged is taken away, I suffer. My access to information - already a very shaky balance - is threatened, and appears that such censorship will even be made law by our wonderful government.

I've got to stop reading Slashdot. These days, it just gets my blood-pressure up.

Re:Do google pay for bandwidth?

That doesn't mean it's free really. That means that both networks charge to connect to them and so when they connect to each other they cancel out the charges. If the tele companies are giving Google free peer status and they don't think it's a benefit to them then it's just stupid of them. Will they lose business if the network down the street has better access to Google than them? Very likely so if it's a noticable difference. Is it enough of a loss if that happens to justify not giving Google a break on the peering? Probably not. Bandwidth should be pretty cheap for the people that own the network - it costs almost as much to have the lines going unused as to have them in use. I'd imagine that most of the traffic between Google and others, through their network, is to somebody that is in some way their customer so they are making money by having Google there.

As you said they are sort of being their own ISP and also they are providing a value to their peer network.

Re:Do google pay for bandwidth?

This is exactly why the telcos are (to me) being seen as greedy f'n bastards. They're already getting payment from me (and their other customers) to utilize their bandwidth. Now they apparently want to double-dip and charge the party at the far end to send packets of data to the telco's paying customer. Essentially, in POTS terms, they want both the caller and the callee to pay for the same conversation.

Google pays for the bandwidth they use from their provider. I, as a broadband connected citizen, pay for the bandwidth I use to connect to Google. Essentially, the telcos are already getting paid twice - once to accept the packet and again to deliver it to it's destination.

There is *NO* reason why additional charges should be allowed. It's lunacy to think that this could be allowed to happen. Cost of access can do nothing but go up, which will further widen the gap between those that can afford to be online and those that cannot.

If the telcos aren't happy with how much they're paid to have data travel across their network, then they should re-address their pricing structure with their customers directly.

Knowing what a price increase would mean to the number of customers they'd retain, the safer alternative is clear - charge the companies that their users want data from.

Free lunch?! Ha! They've kept their lunch safe and now they're asking for the $50/plate buffet. Greedy f'n bastards...

Re:Do google pay for bandwidth?

Google could come back and say "Hey verizon, since you're building an ISP business based on OUR investments, how about if YOU pay US money to provide better service to Verizon customers?"

It could go both ways...

Re:Do google pay for bandwidth?

Think so? If the Telcos played hardball and Google refused to pay, then struck a deal with the cable companies for exclusive access, who do you think would win? I could flip a coin over DSL or cable at this point, but if only one of them had Google services (and Google could blame the telcos and their extra network charges for that) then I (and everyone I know) would be on cable in a minute.

ISP service is now a commodity, their differentiation is so minimal. Content is the key.

Plus, if Google actually builds their own backbone as many have rumored, people will be paying THEM just to peer.

Re:Do google pay for bandwidth?

Google has more to lose by the Bell's blocking them, than the Bell's have to lose by blocking google.

The commentators all say that Google has been buying shedloads of dark fibre. If this is so, does Google have anything to lose in this fight? By this time next year, could we see Google as the main backbone supplier in the US, and the Bells all whimpering a corner, saying 'please, sir, we didn't mean it'?

End of the Internet?

Google could come back and say "Hey verizon, since you're building an ISP business based on OUR investments, how about if YOU pay US money to provide better service to Verizon customers?"

This is the end of open information.

The internet will revert back to days where Compuserve and AOL each had their own internet (aka intranet).

Nahhh

The internet will revert back to days where Compuserve and AOL each had their own internet (aka intranet).

Nope, it'll never happen. It's like the cold war. Each side has too many nukes to lob at each other, and nobody will actually make the first strike.

Look at it like this: Google and other online providers are building this huge host of services. If any telco/ISP actually tries to charge them for running services over their wire, then Google simply stops running services over their wire, blocking off that section of the network entirely. Suddenly telco/ISP's customers can't access their Gmail, can't do their google searches, etc, etc. Customers bitch furiously, and start leaving ISP in droves, to competing ISP that isn't trying to be such a bastard. ISP repents and Google provides service to that segment of the network again.

No ISP is actually going to try to charge these major service providers because the end result is simply that these service providers simply cut them off. The ISP has little or no content that people actually want to use. They'd love to be in the content game, but they have proven, time and again, that they suck at it. Customers want the same content that their friends get. If my ISP does something that impacts my access to the content I want, then I'm damn well going to switch ISPs, yeah?

Google is standing up to the freakin' government to not have to release their search stats, you think they aren't going to shoot the finger to any of these ISP who tells them to buck up for use of their line? The mere fact that Google *will* cut off an ISP is enough to keep that ISP from pulling the trigger on this sort of nonsense, at least until the ISP thinks that it really can replace all the content on teh interweb.

Re:Do google pay for bandwidth?

I console myself, given the climate in this crazy world, with knowing that someone crazier than me will start capping Telco Higher-ups in the back of the head if net access becomes unreasonably expensive as a result of these bastard demands.

You're getting paid already, fuckers. Don't get too greedy. There's a lot of really smart people out there that you REALLY don't want to piss off. Remember the Unibomber?

Think of a guy like the Unibomber that DOESN'T hate technology. I guarantee there'se someone out there like that who will be looking for Executives of companies that try to fuck the net for their own personal gain.

Just something that worries me based on my studies of those types when I was in college.

Smart people with a beef scare the shit out of me.

Re:Do google pay for bandwidth?

Actually I think this is an intresting case. If this holds true then can telcos attain compensation for business calls as well. If I call my friend to say hi should I be charged a diffrent rate then if I make a profitable business arangement? Should top execs be charged a premium just to use a network? And if any of this holds true by what means could they be allowed to attain assurance of the severity or amount of the charge?

Could this be a new cash cow? Imagine making even 1% on a company like IBM, HP or GE for each multi-million dollar deal made through means of telecomunication(pots, IP, cell,...).

This could either create new accepted business methods or bring each company into the telecom game by buying a part of, or the whole "wire".

Re:Do google pay for bandwidth?

Well, you see: Mr. Bronfman (also known as the 25Watt bulb of the entertainment industry) believes that he should get a cut on every IPod sold. So I can understand where Verizons inspiration is coming from.

Re:Do google pay for bandwidth?

Looks like a new and novel application of the word 'dodge'. Let's take it for a spin:

I dodged taxi fare by buying a car.

I dodged restaraunt bills by cooking my meals.

I dodged cleaning bills by doing laundry

No, sorry, not working for me.

Re:Free Lunch?

I hate to imagine what their bandwidth expenses are. I can chug through $100 of bandwidth a day sometimes (at $.50/GB) and i just run a few small websites. I'd be shocked if Google isn't moving hundreds of TB's of bandwidth a day at least. Their bandwidth and electrical fees must be unbelivable.

And I certainly am paying for Internet access. For home, office, and mobile access I spend a couple hundred dollars a month. All so I can use ssh and a web browser and expect to get shitty service. When they offer me gigabit DSL to my home and office (not to mention servers) then we'll talk about raising the prices.

With the shitty connections we get here in the US they should be glad we're willing to pay at all. Some third world countries have better net access. Pitiful.

Re:Free Lunch?

I think it started with Google starting to buy up their own fiber and tinker with providing a phone service. Google became competition for the telcos and they should be blind scared of that.

Re:Free Lunch?

Hell yes I'd fuck off my telco in a split second to use GoogleNet/VoIP. I'm still pissed Verizon is getting a cut of my Speakeasy OneLink connection.

Re:Free Lunch?

All Google has to do to make Verizon's incessant whining disappear for a long time is redirect every hit from a Verizon customer to Google's servers to a page explaining that Verizon is trying to extort money from them for a 24 hour period. Verizon will get so many customers leaving their service that within 24 hours, they will be BEGGING Google to unblock their network. If Google wants Verizon's internet service to go away forever, all they have to do is refuse to remove the block, and enough customers will tell Verizon to cram it that they will diminish into irrelevance in a matter of days or weeks. Verizon is banking on Google not having the guts to do it. I'm betting that if they push Google too far, they will.

As far as I'm concerned, when companies try to disrupt the Internet with veiled threats and extortion tactics, they should receive an instant Internet death sentence, i.e. blackholing their traffic until they stop acting like whiny little crybabies. The Internet works solely because each ISP pays their fair share of the bandwidth for their customers. If Verizon doesn't want their customers to have access to Google, all they have to do to cut those costs is stop paying the bill, and I can guarantee their upstream providers will stop providing the pipe.

The problem is that Verizon is among the most greedy telcos on the planet Earth. They overcharge their customers for pretty much everything, but that isn't enough, so they want to charge other ISPs' customers, too. Screw Verizon. Life is too short to put up with companies that screw over their customers to make a cheap buck.

If Google has any sense whatsoever, they'll nip this problem in the bud sooner rather than later---they'll turn Verizon's customers against them NOW while this BS can be contained, rather than waiting until other greedy ISPs decide to jump on the bandwagon and utterly destroy the Internet as we know it....

Re:Free Lunch?

and enough customers will tell Verizon to cram it that they will diminish into irrelevance in a matter of days or weeks.

I think you're overstating Google's power a tad here. Sure Verizon will lose customers, but in the end it's a lot easier to switch search engines than it is to switch ISPs. Rule #1: Never underestimate the laziness of the average American.

Also, I don't think 24 hours would be enough to get a lot of people to cancel. Sure they'll talk about cancelling while they can't search for their pr0n or the latest Britney Spears gossip, but as soon as Google flicks back on they'll forget they were ever going to cancel. Rule #2: Never overestimate the memory of the average American. (And if Google were to keep the block on longer than 24 hours, see Rule #1.)

Re:Free Lunch?

No one is forcing the telcos to expand their infrastructure

Actually, the taxpayers have already footed a large part of the bill for them to do just that.

Sadly, no one is making them follow through on it.

Re:Free Lunch?

And, last time I checked, India is still supposed to be 3rd world.

Really? The last time I checked, India was supposed to be "the placed your programming career just got outsourced to"...

Re:Free Lunch?

T-1's are a couple hundred dollars a month - OC-48s are about 1350 T-1s. Assume a big break for buying the big pipe, and that comes out to... several buttloads of cash per month.

It's rather different. To begin with, T-1s are essentially leased lines from a telco. They're pretty shitty and cost a lot more than they should.

OC-x connections are a bit different. When you get up to the level of OC-48 you're probably paying for your own fibre to be run. In google's case they're probably not paying so much for bandwidth since they have so many peering agreements. Why should they pay for bandwidth when they can just hook up a bunch of fibre to AOL's network? I hope you see where I'm going with this...

I'm not in the proper state of mind to really explain it, and I'm no expert on providers of OC-3+ connections. That's way above my damned level. But it's a whole different playing field from the shitty T-1s being offered by ISPs. A few meters of fibre and a router will dwarf the cost of something like T-1, but the price/bit ratio is much better.

All of that, and the fact that google probably pays a lot less for bandwidth than you'd think, aside, I think this's just more FUD from Verizon. I wish Google had some GHenchmen to go take care of those bastards...

Mushrooms

Let's have some metaphorical fun. Suppose you're a mushroom farmer. You sell your mushrooms wholesale for $1 a bushel and life is good; you're not rich but you get by. One day you notice that Mario Batali is using your mushrooms in his restaurant and on his show and making a bundle. He's selling dishes which prominently feature--no rely on--your mushrooms for far more than you thought they were worth. Do you think you have a case to extract a fee from Chef Batali? Is he getting a free lunch from your hard work or does the mushroom farmer just have business-model-envy? I encourage equally metaphorical and perhaps dubious responses.

Re:Mushrooms

I'll play..

Suppose you are an electric utility, and you have many millions of paying customers. Life is good; you're a super rich mega corporation, but you would like to make more profits (after all you owe it the shareholders) and have your sites on once again taking the throne back and becoming an honest to goodness monopoly. One day you notice that Sony is selling products that require your electricity to work, and that Sony is making a bundle. Their products absolutely rely on your electricity, and you realize that your electricity is worth more than you thought! After all Sony is getting a free lunch; forget the fact that Sonys customers are already paying for the electricity. You decide that in order for Sonys products (and by extension their customers) will have to pay another fee for the access to electricity that up until now they thought was already paid for. After all, the infrastructure needed to grow the electricity business is not cheap, and you are not interested in giving out a free lunch to anyone.

Re:Mushrooms

I'll play along too. =) Let's say a major corporation owns major streets in a variety of shopping districts in a variety of cities. Then they send out advertising to various shops, telling them of the opportunity to pay a fee and in return the corporation will go dig up the sidewalk in front of competing shops. Hell, they'll dig up the entire sidewalk except in front of yours and even provide teleportation services to customers of your shop. Of course, your competition can avoid all this if they pay the same fees.

This bears striking similarities to a small enterprise I observed when I lived in an Italian neighborhood in New York during the late 70's/early 80's. There was a social club on the block, and the wise guys maintained an armed presence in the neighborhood 24x7. This made our neighborhood very very safe, which helped local businesses. No burglaries in over 20 years we used to brag. One time there was an attempted burglary. When the cops finally showed up 90 minutes later, the wise guys from the social club handed him over, bloody from head to toe. Poor skel apparently fell down the stairs while trying to escape. Anyway, this enterprise was financed by the shopkeepers in the neighborhood. To avoid having their windows broken every 3 weeks, they would pay a small stipend to the social club.

It's funny, what the social club was doing could have gotten them prosecuted under RICO statutes. Actually, I'm pretty sure even conspiring to do what they were doing is probably illegal under those laws, but IANAL.

Re:Mushrooms

I'll play along as well. Imagine all those sidewalks were in fact paid for by the government, and installed by the government, and the people of the city were actually paying for those sidewalks to be in place. On top of the fact that the customers were paying the government fee's for those sidewalks, they were also in fact paying the company directly for the sidewalks... really you could say they were paying for them twice.

To top it all off, the shops are already paying a third party for that last inch of sidewalk between their shop and the main one's... getting confused yet? Now the first company decides they should get paid not only by the government, and the people, and quite possibly the company that the shops pay for sidewalk access, but also the sidewalks themselves. I mean, after all, it costs a lot of money for the government... er... to put up those sidewalks and maintain. It's only right they get paid 4 ways for the same thing right?

If you're at all confused by this post, perhaps you now realize why we should only have informed people deciding the future of the internet, and those "informed people" best not be part of the ones who stand to profit.

Re:Mushrooms

In this case what Verizon has to realize is that all their networks become useless if there is no content on them. It's a symbiotic relationship. Google needs the networks, and the networks need Google. I don't see why one would want to impose any kind of restrictions on the other.

To win the debate, frame the debate.

This isn't about a "free lunch" or "free ride" or anything like that.

This is about Verizon realizing that providing the pipeline is a good, solid revenue stream ... but the REAL money is in controlling the bottleneck.

So, they attempt to frame the debate as "free lunch", but the reality is that they're looking for a way to get some of Google's revenues by building a bottleneck.

Re:Free Lunch?

The speaker must have omitted the part about Google headquarters tapping into their next door neighbor's open wireless LAN, right? When will those people ever learn....

After 20 minutes of being on hold...

Customer: I'm having trouble with my DSL connection. I paid for broadband access, but google.com took an hour to load and vonage.com took 3 days...
Verizon: I see that you don't have call waiting on your line. I'll go ahead and add that for you, ok? We're also running a promotion that adds no value to you but will extend your contract with us. Would you like to hear about it?

Simple solution, in Google style

Just like DMCA-takedown notices that Google uses to highlight the fact that you are missing content (and additionally direct you to the content you are missing), simply put a banner on the search results for any Verizon customer that says something similar to:

Your Internet Service Provider has intentionally degraded the speed at which this page loads. If you would like your search results at full speed, please contact Verizon at 800-483-4000.

Re:Simple solution, in Google style

If morons like Verizon keep this up, it will be more like "Call GoogleNet at xxx-xxx-xxxx. Service coming to your area very soon". It looks like another example of mentally retarded accountants trying to get short term profits at the expense of reason and long term viability. Hey shareholders, sell your Verizon stock now before it isn't worth toilet paper.