Teletruth News Analysis, August 16th, 2010
On the web: http://www.newnetworks.com/googleverizon.htm
Google and Verizon: Be afraid. Be very afraid.
Verizon and Google recently created an "understanding" over the Internet and
net neutrality titled: "Verizon-Google Legislative Framework Proposal".
The details don't really matter at this point. What matters is --- Google is
not going to be a force that will protect the public interest from the
controllers of the wires, who are now engaged in serious anti-trust games.
Comcast, AT&T and Verizon are now lobbying, funding astroturf groups, (fake
consumer groups), a horde of paid-off minority groups, not to mention
corporate-funded think tanks, state and federal Congressmen and Senators
--- all to make sure that the wires are private property for their use, with
walled-in ghettos of influence and control.
And because of their massive 'foundation' booty, (who do you think is paying
for this largesse?) and their advertising dollars on broadcast and other
media, opposition, much less media scrutiny, has been the sound of one hand
Instead of questioning any of this, Google is essentially going to bed with
them. Instead of calling to re-open the networks to all forms of
competition, from allowing different Internet Service Providers (ISP), or
programming providers on the cable network, Google is making nice-nice.
First, they already have an agreement with Verizon Wireless for their phone
Droid, and now they want to have favored-status for wireline service,
focusing on net neutrality - a non-starter issue, a cover-up issue.
Why is Net Neutrality not the issue? Because if there was serious
competition, when someone was blocked, degraded or had other problems, the
customer could simply take their business elsewhere. Instead, through
consolidation and mergers (and more mergers to come, such as
Comcast-GE-NBC), AT&T, Verizon, and Comcast's money and power --- working
together --- is creating a climate where the owners of the wires are now
allowed to take over the entire wire for all services, including phone,
broadband, Internet and cable, as if it was their own property for
So what if
cable and even wireless services. (told in an upcoming story). So what if the phone companies have stolen the utilities, the "Public Switched
Telephone Networks", or that the cable companies now forget there's
something called a 'franchise'.
They will say "regulation blocks investment". What planet are they on? Since the 1990's deregulation has given AT&T and Verizon over $320 billion to do upgrades of the Public Switched Telephone Networks, the utilities. They took the money and ran. We're 15th in the world in broadband, proving that point.
All of this is a serious problem as it means that the public interest has no
counterbalance. Congress? One has only to look at the monies collected by
Congressmen and Senators from Comcast, AT&T and Verizon. We documented how
many politicians on both sides of the aisle are now campaign-financed by
these companies, their associations and PACs, and are taking actions to harm
the public and back their fenders.
The other DC-advocacy groups? They are underfunded at best and without
actual clout, but good for soundbytes.
And talk about anti-trust? If both wires are asking for the same thing, to
be walled-in ghettos who control all services, and both collude through
major price increases, blocking competition and controlling the deployment
of broadband throughout
--- isn't that a cartel? The only connections into the home are controlled
By one group of companies?
Where are the trust-busters? From Wikipedia:
"Around the world, what
more commonly known as "competition law." The purpose of the act was to
oppose the combination of entities that could potentially harm competition,
such as monopolies or cartels."
No, the 'force' is going to the dark side. Be afraid. Be very afraid.
Before for I discuss 'the Google Factor", let me back track a bit and be very specific.
Essentially, the local phone networks were opened to competition by the
Telecommunications Act of 1996. By 2010, they are closed. Back in the year
2000, the old-AT&T and the unmerged-MCI (MCI is now owned by Verizon) were
the two largest
households for long distance and they had over 7 million local phone customers; competitors overall had about 20% of all local service (by 2004). There were also active, independent Internet Service Providers. In 2000, there were over 9,500 companies, such as AOL, and thousands of small companies in the market. The irony is the fact that the phone companies weren't in the Top 10 of US Internet Providers in 2000.
And in terms of
delivering Internet service
to new customers,
had the largest growth in history --- hypergrowth, to be exact, in the
number of lines, minutes, revenues, and even profits. It was the small
competitors, not now-AT&T,
Verizon et al who brought
in the Internet --- a fact regulators seem to ignore.
Then, starting in 2004, the FCC rewrote the Telecom Act of 1996 and closed
the networks to competition, putting AT&T and MCI up for sale as well as
putting 7000 Internet providers out of business. The telcos and cablecos
simply took away the business from the Internet providers who had built the
business but were prohibited from migrating their dial-up customers to
faster speeds (broadband).
The companies also shifted monies that were supposed to be used for
upgrading the wireline networks to their wireless divisions --- so that by
now-AT&T and Verizon controlled 80% of the wireless market.
Since that time, the only competition in most of
at best. The cable companies --- the other wire into the home --- only have
20% of the local phone residential market. The local telcos, Verizon et al,
can still raise rates whenever they want because there is no competition to
drive down prices. And cable competition? AT&T and Verizon have about 5
million upgraded-fiber-cable households out of over 120 million; there is no
serious direct cable competition in most markets.
Another irony? Some of the cable networks were supposed to be opened to
competition. For example, the Federal Trade Commission (FTC) agreed to the
AOL-Time Warner merger because the company was not only providing net
neutrality but also the networks were to be open to Internet Service
Provider competition: http://www.ftc.gov/opa/2000/12/aol.shtm
"Under the terms of the order, AOL Time Warner would be: required to open
its cable system to competitor ISPs; prohibited from interfering with
content passed along the bandwidth contracted for by non-affiliated ISPs and
from interfering with the ability of non-affiliated providers of interactive
TV services to interact with interactive signals, triggers or content that
AOL Time Warner has agreed to carry; prevented from discriminating on the
basis of affiliation in the transmission of content, or from entering into
exclusive arrangements with other cable companies with respect to ISP
services or interactive TV services."
Brain dead (that's a technical term) regulators seem to have forgotten this
requirement, much less reviewed just how wrong that merger and the other
AT&T and Verizon mergers went. AT&T and Verizon failed to upgrade the Public
Utilities as required by state agreements, raised rates, and increased their
market controls, never fulfilling the major 'commitments'. See:
Bring in Google.
Google could ask for the networks to be re-opened to competition, thus
solving net neutrality. But I believe Google woke up and said --- Heck, we
need to have access to the wires; if we don't then we can't control our
Google first decided to be a provocateur. They decided to light a fire
pertaining to wiring communities with fiber as a bypass to the phone and
cable companies and to bring in high speeds. The problem is-these are only
for 'tests', not serious nationwide deployments.
So, after the exercise --- it was a feign --- they most likely came to the
decision that this side of the business would not supply enough bandwidth to
enough people and the only way to get into markets is to cut deals. The
phone and cable companies would also take local actions to block any
building out, as they have been able to get laws passed in some states to
block municipalities from upgrading the networks Verizon or AT&T failed to
Voila --- Google made a deal with Verizon for Droid which brought them the
wireless market. And it now seems that Deal Two was underway - wireline
connectivity for their services, giving them favorable status on the
networks over the other search engines, or other services Google offers.
Forget all the rhetoric, press releases, statements, etc. Google needs wires
and doesn't have them, so instead of confronting the network providers they
will simply go to bed with them.
But here's the problem: The Public Interest. Google was one of the few
companies left standing who could be a counter-balance to the 'force'. Since
the wire companies are in cahoots and are now lobbying, campaign-financing,
minority-co-opting, astroturfing together, who's going to be the balance in
But the most important --- the corporate controls will be so overwhelming
that the story will not be told on TV or other major media. That's right.
Today, Verizon and AT&T spend enormous sums of money on advertising. Do you
think any station who receives the money will do a feature on the corporate
controls, much less other indiscretions?
And when the Comcast and NBC merger goes through, it eliminates major
networks, from NBC and CNBC to Telemundo, from doing investigative stories
about the cable companies, much less their buddies who spend so much money
So, Google and Verizon? This does not bode well dear reader.
Be afraid. Be very afraid. (Paraphrased from Yoda to Luke Skywalker in Star
I note: Google's motto in their 'code of conduct'
"Don't be evil". Let's see what happens next.
I note: Google's motto in their 'code of conduct'
"Don't be evil". Let's see what happens next.
PS: Verizon has always had a relationship with the dark side. James Earl
Jones, Verizon's spokesperson for years, was also the voice of Darth Vader.