This August, 2012, on FT.com Vint Cerf was quoted in an article about the upcoming UN discussions over Internet governance.
But Mr Cerf says that pricing structures are antithetical to the internet as they could stifle innovation. “When Larry Page and Sergey Brin started Google, they didn’t have to go and cut a deal with every ISP in the world. It’s a gun-to-the-head model to say: ‘You’re making a lot of money, give us some.’ An alternative would be to compete – improve your own value-added services.”
What a concentrated and irresponsible little bundle of words this is! Cerf has many public roles – as a scientist, and as an honoured innovator, and as an expert on set of technologies that are important for many aspects of the improvement of the human condition. How disappointing to find that his role as a paid evangelist – a faith based persuader for money – overrides all of these honours and achievements.
He starts with a half-lie. As a startup, Google did not have to negotiate with every ISP because they were able to buy connectivity in the market, like every other internet business, and piggy-back on the deals ISPs had done with each other. Today’s new businesses can follow the same path, and can also take advantage of a much more developed infrastructure market that puts massive processing and connectivity within reach of almost anyone. In fact Google preferred to move away from the wholesale hosting market in favour of public and private peering, where in effect it did cut a deal with many many more ISPs, in order to get preferential treatment and lower costs for its traffic.
What Google demonstrated conclusively was that when you generate a little traffic it’s your problem, but when you generate a lot it’s everybody else’s. Peering was not supposed to be quite so asymmetric, so a market was never fully developed. Now Cerf is lobbying to prevent a market being created and to preserve privileges that Google enjoys over newer startups; the original gun was Google’s when it bought YouTube, and Cerf wants to make sure the other side remains unarmed.
Having positioned Google as a startup at the mercy of arbitrary behaviour in wholesale connectivity markets Cerf goes on to deploy all the sophistication of the teenage sneer. While for an online advertising business Google owns a lot of infrastructure, compared with the investment it requires from other network providers to keep its platform connected it is still well on the right side of the deal. The excitement surrounding a very limited trial of Google fibre internet access seems to have died down a bit since the limits and the price, as well as the behind doors politics, have emerged. And no ISP is more upfront than Google about preferential treatment for its own value added services.
And yet the answer is almost certainly not to attempt to regulate paid peering, or paid for QoS at peering points. Content and services gain in value the more they localise, and while it’s Cerf’s employer who is as he says ‘making a lot of money’ at this point, competing on thousands of local exchanges is not the same as competing on dozens or hundreds. Regulators would do well to preserve the mostly unpaid and informal peering model, not because Google does so well out of it now, but because it is more likely to deliver a platform for Google’s competitors in the future.
Preserving the openness of Internet Exchanges in the future from crowding out and from anti-competitive contracts will be a far more important regulatory challenge than defending Google from pricing of traffic exchange is now.