Cleland served as Deputy United States Coordinator for Communications and Information Policy in the George H. W. Bush Administration. Eight Congressional subcommittees have sought Cleland’s expert testimony and Institutional Investor twice ranked him the #1 independent analyst in his field. Scott Cleland has been profiled in Fortune, National Journal, Barrons, WSJ’s Smart Money, and Investors Business Daily. Ten publications have featured his op-eds. For a full bio see: www.ScottCleland.com.
Latest posts by Scott Cleland (see all)
- The Google-Facebook Online Ad Cartel is the Biggest Competition Problem - January 15, 2017
- Reason will eclipse politics when GOP takes over FCC on Jan. 20 - December 18, 2016
- How Trump and Promise of FCC Reform are Already Spurring Economic Growth - December 11, 2016
Google got it right. In a filing to the FCC, Google Fiber rightly asserts that its terms-of-service do not violate the FCC’s Open Internet order and is simply reasonable network management allowed under the FCC’s rules. Mr. McClendon’s 10-24-12 net neutrality complaint is misinformed and groundless.
By way of background, Mr. McClendon is a potential Google Fiber customer that does not live in a city that Google Fiber currently serves. He preemptively complained to the FCC in great detail that Google Fiber’s terms-of-service were a net neutrality violation because they expressly prohibit the hosting of “any type of server” with a residential broadband service.
- From Google’s terms-of-service: “Your Google Fiber account is for your use and the reasonable use of your guests. Unless you have a written agreement with Google Fiber permitting you do so, you should not host any type of server using your Google Fiber connection, use your Google Fiber account to provide a large number of people with Internet access, or use your Google Fiber account to provide commercial services to third parties (including, but not limited to, selling Internet access to third parties).” [bold added]
Google Fiber is correct that its terms-of-service prohibition of server-hosting on a residential Internet access line is reasonable network management and a common practice in the market.
Entering the broadband market as a facilities-based provider with infrastructure investment capital at risk has opened Google’s eyes to the reality of its original unreasonable net neutrality expectations in 2006. Google Fiber now understands it’s perfectly reasonable for a private Internet access provider to have “the power to pick and choose what you will be able… to do on the Internet” access service that Google Fiber provides.
As a facilities-based broadband competitor that has invested hundreds of millions of dollars in infrastructure risk capital, Google Fiber is now rightly defending its commercial Internet freedom to not have to subsidize competitive resellers of its gigabit access network. Without this reasonable business freedom, one consumer could pay for a gigabit of bandwidth and install a server that would enable the consumer’s neighbors to free-ride Google Fiber’s competitive offering.
In addition, Google now appreciates that its commercial gigabit residential offering — that provides at least 20 times more bandwidth than most consumers could possibly use at this time — begs arbitrageurs to try and game the system by charging net neutrality violations in order to try and extract commercial concessions that make no commercial or competitive sense for Google Fiber to provide.
In sum, Google’s net neutrality stance has reasonably evolved since it originally bankrolled much of the net neutrality movement in 2006 and since it supported the Title II reclassification of broadband in a 2010 FCC filing. Google now better understands competitive and market realities.
Most interestingly, Google’s current effective net neutrality stance — that a competitive broadband provider can reasonably prohibit a potential competitor from using Google’s Internet access network to compete against Google Fiber — is an important implicit recognition that competitive broadband providers have no regulatory obligation to subsidize over-the-top competitors to their various businesses.