Google vs. the Bells

This is the biggest tech story of our time, the battle between Google and the Bell companies for the future of the Internet resource.

Right now the Bells, and Comcast, control Internet access. Avoid them if you can. They own most last-mile access, and most of the public Internet core.

They achieved this position during the last Administration. They overturned the 1996 Telecommunications Act, kicking competitors off their infrastructure, then took over the wireless spectrum through auctions.

They now collect monopoly rents, defining bits as service, controlling customers, marrying content to access, charging as much as they can while delivering as little as they can.

Google practices a different type of economics. Google's advantage is not its branding, nor its advertising reach. Google's advantage is its infrastructure, which lets it act as it does. The more bits people can grab the better for Google, because it can deliver more service for fewer dollars than anyone else, by orders of magnitude.

Google owns its own fiber. It owns its own cloud. It pioneered the use of low-cost servers, of cloud technology, and is now working hard at energy efficiency. While the Bells have been pocketing government subsidies, and now claim the only way to deliver more capacity is with more and bigger subsidies, Google has been proving that's just not true.

The Bells don't like this, but even apologists like Scott Cleland (on CNBC today) admit that in the short run there is little they can do. Just now he accused Google and the Obama Administration of being joined at the hip, another way of saying the Bells and the current government aren't.

But this should not be a political argument, and Google's latest move is an attempt to emphasize that. It wants to test delivery of 1 Gbps service to homes later this year. That's anywhere from 25 to 100 times more speed than consumers can currently get.

Google admits this is an experiment, like the famous Qube interactive broadband test of the 1970s. What would you do with an Internet firehose?

The only response the Bell apologists can offer is to try and shackle Google with regulation, as they claim the Bells are shackled. (They are not -- they may be in jail but they're the warden.)

The government's concern is that new wireless devices will saddle our networks with so much demand they won't be able to keep up. They won't, if we have to rely on monopolists who control content for that capacity.

Google offers another way. But the Bells still have Washington wired to their way of thinking. Rather than argue the point, Google offers a demonstration of what the economics of abundance can do.

And they can do plenty. The per-bit cost of running data has been declining throughout this decade. Whether via fiber or via wireless links, we can do more with what we have than ever before.

Yes we can, Google says. No you can't, say the Bells.

Whose side are you on?

This post was originally published on Smartplanet.com