Editorial

Google-Verizon: It's all about the Money

When does a compromise stop being a compromise and become an all-out policy reversal? In 2007 the iPhone was fresh and set to dominate the nonexistent "lifephone" market by single handedly creating the category. On June 29th of that year, the mobile market was forced to bow to a new ruler; ruthless and controlling, exclusive and dominating, iPhone became the new mobile standard. Riding on a platform of "consumer choice", Google looked to be the white knight gearing up to free a world locked into bondage by a single platform. Espousing "choice" and "freedom" as dictated by the 700 MHz spectrum auction's founding principal of software openness, and driven by Verizon's lawsuit condemning the FCC rules as “arbitrary and capricious, unsupported by substantial evidence and otherwise contrary to law", Google created what can be described as a modern day "Rebel Alliance" to combat the telco's "Imperial Grip" on the wireless market. Not so ironically, three years later, Google has joined the darkside; Google is to now to Verizon as Vader was to Palpatine.

"The nation's spectrum airwaves are not the birthright of any one company. They are a unique and valuable public resource that belong to all Americans. The FCC's auction rules are designed to allow U.S. consumers -- for the first time -- to use their handsets with any network they desire, and download and use the lawful software applications of their choice. 

It's regrettable that Verizon has decided to use the court system to try to prevent consumers from having any choice of innovative services. Once again, it is American consumers who lose from these tactics."

Never a company to mince words, in 2007 - Google was ready to fight. Allying with hardware manufacturers rather than to carriers was seen by many as a bold move, one that might offer the freedom and choice consumers had been severely lacking. The "Open Handset Alliance" was to be a conglomerate of organizations that believed in free, open hardware across product lines and carriers: real choice for the masses, freedom for the pocket. 

Only this never happened.

From the beginning, Android handsets were carrier exclusive. From the G1 being only available in the U.S. on T-Mobile to AT&T finally beginning to even stock Android devices, Google's vision of open, cross-carrier devices seemed to be slipping away. While a noble experiment, the foretold "saviour" of the free market, Nexus One, remained an afterthought to the mobile buying masses. Instead of cutting the "oooh-flashy" part of the hardware equation out of the selection game and focusing strictly on offered service; consumers, brainwashed by carriers, continued down the path of two-year service agreements, substandard coverage and poor service. The Nexus One could have succeeded had Google took a stand, the stand they had touted in the past, the stand for freedom.

Only this never happened either.

Google's #1 revenue generator is advertising. You know this, your grandmother knows this, even Ars Technica has managed to pick up on this from time to time. Google's no stranger to litigation, but instead of utilizing those eager legal teams for the greater good, instead of fighting against carrier locks and arbitrary hardware distinctions, Google decided to not only play it safe, but to follow the money. They're a publicly traded company, why wouldn't they? Google realized that if they allowed carriers to maintain exclusivity and pre-load their typical revenue-generating tricks that not only would carriers stock the handsets, but in return would maintain Google's dominance over search and advertising. Not a Nascar fan? Well you are now! Sprint's EVO 4G is a prime example of what could have been. Not only one of the most powerful smartphones on the market, EVO could have set the benchmark for an inter-carrier device. Harnessing great hardware, combined with the potential of an unlocked and free OS. Sprint decided to do what they do best: lock that sucker down and stuff it with crap. Did Google bat an eye? Not even a lash. Google's not stupid, they saw a revenue opportunity MUCH more lucrative than their original stance and decided, like any capitalist company should, to follow the yellow brick road.

Can you hear me now?

Let's recap: Google sees the potential for lost revenue by allowing Apple to have complete control over the smartphone market so forms an alliance with everyone who isn't Apple, well nearly. Also sounding like a good idea at the time (again to everyone that wasn't making as much money as they could), Google promotes freedom. This freedom, while sounding good on paper, didn't quite pan out, so instead Google compromises for the first time. They allow carriers to utilize their open OS on exclusive devices while maintaining a firm grip on their money-printing advertising and services. Sounds like a win-win, so it's time for policy. Enter Verizon.

With Google and Verizon's pact on net neutrality. In a joint blog post proposing policy to legislators, Google and Verizon covered these points:

  1. All legal content should be accessible to wireline customers.
  2. ISPs should not be able to discriminate against legal content in terms of access or quality of service. This includes not prioritizing Internet traffic, even at a premium rate.
  3. The customer should have fully transparent access to information about the services they purchase. This includes giving content providers access to ISP network management practices.
  4. FCC enforcement should occur on a case-by-case basis, using a complaint-driven system. The FCC can penalize violators up to $2 million.
  5. Provide opportunities for ISPs to partner with content providers to enable new , innovative and dynamic services to customers.
  6. Mobile Broadband is different than wireline broadband, and these frameworks, other than the transparency requirements, would not apply to wireless broadband providers.

Whoa. WHOA. What? That last point, let's try that again: mobile broadband is different and thus this net neutrality framework shouldn't apply? Bomb. Shell. Although arguing that the network is not as "mature" as wireline and is still untested under full deployment, this is not valid. Mobile carriers are a veritable gold mine. With infrastructure that has been paid for multiple times over, there is plenty of cash for support and continued deployment. This is not the issue at hand. Verizon et al are concerned with protecting their current, lucrative business model. By having Google on-board and providing its services coupled with the maintenance of the telco's feature crippling (hot-spot disabling), service limiting (read: Skype-free) software deployments both companies receive a part of this ever growing market. Google's ad-revenues continue to increase (200,000 new activations a day) while Verizon keeps lining them up and lockin'em down to their notoriously standard service agreements. Through their joint policy proposal, both companies are presenting a facade of neutrality in a stable market of wireline, while attempting to ensure that their developing revenue continues to grow unchallenged. By introducing neutrality concerns first and in an established market, this "coalition" is softening the blow to legislators who may already be timid to regulate a still developing paradigm.

Some say that the moratorium on net neutrality guidelines will only be temporary while the market develops, and others think that Google is only allying with Verizon in an attempt to temper their policy in the direction of open and fairness while utilizing their clout to moderate the market as a whole. This, as always is not quite the truth. The bottom line is money, as it always is. Hopefully you weren't fooled by Google's eternal "Don't be Evil" mandate. These words are no more steadfast than an "Open Handset Alliance" or even "Net Neutrality". Principals in business are as flexible as the credit cards that carry them; don't be fooled by ambitions or rhetoric, currency is pen of policy.

Read counterpoint: Google-Verizon: It's not as evil as it seems

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23 Comments

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It always has been "... all about the Money".
Ordinary marketing is a sales pitch on your product's qualities. Good to extraordinary marketing sells you an image, something that captures your imagination to fill in the unstated blanks yourself... it encourages potential buyers to read between the lines, because after all, every actual detail you reveal in your sales pitch is something someone somewhere will not like. Google was never even a gray knight, let alone a white one, because whether they actually meant, believed what they said in propaganda or not, the realities of biz, their partners & investors wouldn't let them.

The most surprising thing about the Google/Verizon publicity stunt RE: the FCC & Net Neutrality was their bravado, their gamble in releasing it. It's the sort of line they pay their lobbyists to sell to Congress, hoping to influence things just enough to hurt them the least, but made public, it adds transparency to their motives in a way that negates their prior marketing ploys. Perhaps Verizon felt that re-framing the debate was worth it?...

Verizon sells a service -- lots of them actually, but service is the core of their business -- they're no different than McDonald's or Wendy's or Burger King in that respect, where sure you get a paper cup for your money, but what you're buying is the drink it contains... The cup is just packaging, a means of delivery no different than the CD/DVD with software, music, or a movie -- or for that matter no different than a cell phone & the technology behind it.

Google also sells services. Services have basic rules they have to follow. If Verizon & Google can steer the debate on some proposed, future rules, then maybe they can get away with having fewer regs to follow, saving money & potentially avoiding [or at least have a better chance of winning] some future legal actions. In this case they're saying mobile broadband is different, that it's really more a technology as opposed to a service, & as such any service provider rules & regs won't apply. If they get enough people to focus on Mobile Broadband being different (from land-line service), then just maybe people will forget that the debate is really technology neutral, that it's always been about rules of/for service providers.

The gamble IMHO is that most folks realize this, that it is all about the service -- what percentage of cell phone users actually knows let alone cares about the tech their service provider uses?... they care that it works (or not), & ATT & Verizon reinforce this with their advertising. So they could wind up erasing some of their earlier PR, *IF* enough people bother to look at their Net Neutrality promo -- they're betting they won't.

"Google's #1 revenue generator is advertising. You know this, your grandmother knows this, even Ars Technica has managed to pick up on this from time to time."

What's up with this?

jeeez, hard to believe that companies are interested in money and not in freedom, or any kind of values for that matter.....

Thank you Captain Obvious. Companies are in the business to do what...make money. If not, then they will no longer be in business.

The thing that scares me the most with this is that Google (and Verizon) has decided what the FCC, and therefore the federal government, will and will not enforce, how they will enforce it, what their rules cover, and what the fine will be if you violate the rules that Google has put forth. No vote by Congress, no choice by the people, this is just how it is.

Of course, with the way Google and the current administration is in bed with one another...

And the new OS/browser will further this in the name of speed. Not to mention in thin clienting the world, because who needs an OS without internet? But internet without an OS can be controlled!
Only time will tell.

Google Term of Agreement:

We, here at Google, make a living by selling your personal informations. By using our services, you must agree to surrender your privacy.

[X] Agree [ ] Disagree

Google is the Devil! I've been saying that for years and people laugh but I think they're starting to be unafraid to show their true colors.

I honestly don't see why Google is the bad guy here. To me, its the guy controlling the Internet, and everyone else supporting is likely doing so to maintain their existing deals / venues. Obviously I could be wrong, but it seems to me that Google has nothing to gain by restricting net access, in fact they stand to lose, and only Verizon trully benefits. I'd replace Google's logo with Verizon, up top.

"They're a publicly traded company, why wouldn't they?"

I think this sentence in the article sums it up nicely. Like it or not, any company on the public exchange must show value to their shareholders, and that means strong quarterly earnings reports. So, yes, it is all about the money.

I believe you need money to keep a business running. To see any corporation as misguided for making money and doing whatever it takes to make money is naive and childish. Neowin needs to hire writers with a matured sense of the world instead of hiding behind idealistic visions of the world that will never happen.

SpecialK. said,
I believe you need money to keep a business running. To see any corporation as misguided for making money and doing whatever it takes to make money is naive and childish. Neowin needs to hire writers with a matured sense of the world instead of hiding behind idealistic visions of the world that will never happen.
We're of the same opinion, this article is commenting on the general outside view.

Brian said,
We're of the same opinion, this article is commenting on the general outside view.

The whole idea about a company being open and fair is as outrageous to me as the CIA being completely transparent as to which agents they hired specifically to kill people they didn't like and who they were killing, no one really wants to know these dirty secrets, they just think they do.

In the end a company will do what is necessary as deemed by their employees and their shareholders. If someone thinks the customer will ever come before shareholders, then they are foolish. It's not how you continue to make money. Sure its great for the customer, but in the end if the customer wants to change how business is done by the company every customer needs to be united on the stance, if not business goes on as usual.

SpecialK. said,
I believe you need money to keep a business running. To see any corporation as misguided for making money and doing whatever it takes to make money is naive and childish. Neowin needs to hire writers with a matured sense of the world instead of hiding behind idealistic visions of the world that will never happen.

You're obviously not trying to say that it's okay for a company to make money by any means necessary, right? I'm not going to waste my time coming up with examples that involve sticking children in blenders and other awful things.

The point is, just because you can make more money off something, doesn't make it right. People like you truly annoy me. Think about what you say, and then don't say it.

vice le von said,
Is G$gle the new M$?

I've been saying this for years. Everyone thought Google was the infallible protector of all that is good, ever watchful to preserve the interests of the little guy. It seemed like Google could wade through a river of sh*t and come out clean.

But I kept saying... They will grow and grow, until they feel unstoppable. And that's when the mask comes off. Suddenly all the free stuff they give us, that we become addicted to, is gonna start costing money.

ArmedMonkey said,

I've been saying this for years. Everyone thought Google was the infallible protector of all that is good, ever watchful to preserve the interests of the little guy. It seemed like Google could wade through a river of sh*t and come out clean.

But I kept saying... They will grow and grow, until they feel unstoppable. And that's when the mask comes off. Suddenly all the free stuff they give us, that we become addicted to, is gonna start costing money.

A lot of people like to romantacize compainies by calling them good or evil. They are a company driven by profits just like any other. My opinion is you should just use their products until they either are beaten by another companies product, or becomes to expensive.

Senlis said,

A lot of people like to romantacize compainies by calling them good or evil. They are a company driven by profits just like any other. My opinion is you should just use their products until they either are beaten by another companies product, or becomes to expensive.

+1

ArmedMonkey said,

I've been saying this for years. Everyone thought Google was the infallible protector of all that is good, ever watchful to preserve the interests of the little guy. It seemed like Google could wade through a river of sh*t and come out clean.

But I kept saying... They will grow and grow, until they feel unstoppable. And that's when the mask comes off. Suddenly all the free stuff they give us, that we become addicted to, is gonna start costing money.

They may not cost us money, per se. But they have always come with a price of some sort. Vulnerability, exposure, gathering information of some form or another from you. There's always a price.