Google just threw wireless network neutrality under the bus. What I can't figure out is why. No one seems to know, and I've asked people who really should know. Even if Google has suddenly become Evil, how do they benefit from agreeing that carriers like Verizon should filter their traffic?
Google is an advertisement company first, a content company second. They need open networks to spread their ads and products. They have very little leverage over network carriers, particularly the last mile to people's homes and cell phones. Google believes it dominates the market through sheer product excellence. They are confident they can win any fair competition, which is why they are the poster child for network neutrality. From a personal appeal from the CEO to some brilliant jujitsu in the 700MHz auction, Google has strongly pushed for open networks. Until now.
Google's proposal with Verizon is not a complete about-face. Verizon has agreed to the principle of net neutrality for today's wired Internet. And they have agreed to disclose preferential treatment of traffic. These are steps forward. But in exchange, Google is saying they're OK with Verizon completely abandoning net neutrality on wireless networks. Why?
The best explanation I've come up with is Google believes that they have no choice. Wireless bandwidth is scarce; AT&T's horrible iPhone performance shows what can happen without any quality of service management. I can imagine Google sitting down with wireless carriers and saying "ok, for now you can't really stream video to cell phones reliably. How about we share ad revenue from Youtube in exchange for you prioritizing our packets?" Maybe that helps freeze out Apple and Microsoft. But that would be Google negotiating from a position of weakness, which is out of character for the company.
Furthermore, wireless scarcity is a temporary problem. Bandwidth improves. New cellular protocols, increasingly ubiquitous WiFi, WiMax ... in ten years I believe we'll have a glut of wireless bandwidth. It'd be crazy for Google to give up the principle of network neutrality just to get a temporary advantage for the next couple of years. Google is trying to frame the core regulatory framework for the next 50 years. Is this proposal the most freedom from the carriers Google can negotiate?
One thing that's clear: the FCC has been completely useless in shaping this debate. People rightly complain that Google is acting like an oligarchy, but I think they don't really have any choice. Someone's got to lead and I'd rather it were Google than Verizon, or AT&T, or a slow moving bureaucracy.
Update: Google has posted an explanation of their motivations. Read it yourself, but my takeaway is "this agreement is the best we could do".