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Cerf, Part 1: Excuse me, but we don’t get a free ride at all

By - July 14, 2006

Vint Cerf Lg-1

Fortune recently ran an interview with Google’s Vint Cerf (I think it’s in the current issue, it’s not up on the site yet). That was unfortunate for Business 2.0, the magazine where I do interviews, because I had recently completed an interview with him as well. Given that B2 is monthly and Fortune comes out every two weeks, Fortune scooped B2, and now the magazine doesn’t want to run my interview.

Well, that’s great for us. Because B2 said I can run it here, a full month ahead of when it would get through B2’s production process, and at greater length.

Vint, who is Chief Internet Evangelist for Google and is widely regarded as one of the fathers of the Internet, does not mince words in this interview. He’s clearly got a point of view, and he is not afraid to explain it. Of note – Cerf understands the Bellhead point of view personally, he spent a fair amount of time at MCI before joining Google….

Here’s Part 1, more coming as I edit it…

———————-

Searchblog: I’ve got a bunch of stuff to ask you. I don’t know if you saw – I posted on my site requesting questions for you…You do read Searchblog, right?!

CERF: Well I actually would like to, finding a few hours between midnight and 3 in the morning.

Searchblog: I knew it … Let’s get to the hot issue right now: Can you define the issue of net neutrality and why is so much at stake right now?

CERF: Okay, so let me try and we’ll see whether it seems to make sense to you. This whole issue arose when (AT&T CEO) Ed Whitacre made some charges in the press that Internet service providers or information service-providers or application service-providers were getting a free ride on his broadband network and he thought that was wrong. And he said that he was going to fix that problem – he was going to make damn sure that companies like Google paid him to get access.

Searchblog: This sounds a little bit like “I’m not making enough money in my core business and I’m a little jealous of Google’s business model.”

CERF: I would have to concur that it sure sounds like that.

Searchblog: Now the response of course is – “Well wait a minute, I’m paying 30 bucks a month for DSL or cable, and I’m sure Google pays its bandwidth bill on time every month. Isn’t this really about the idea of a tiered network?”

CERF: Well, the term “tiered network” turns out to be ambiguous, so let’s hang onto that for just one second. Let me come back to what we believe has been sold to the subscriber and then what we believe is inconsistently being said by the broadband provider. Now I don’t mean to suggest every broadband provider is necessarily behaving this way. Some of them are sitting back, maybe privately hoping that the claim that’s being made (by folks like Whitacre) will somehow be feasible or be achieved and then they’ll jump on the bandwagon.

Here’s what (folks like Whitacre) are saying: “Well, we built this network and we can do anything we want with it. And by the way, the FCC has now essentially released us of any common carrier obligations we ever had, thank you very much, and so we can do whatever we want to and why don’t you just buzz off.”

That sort of grates a little bit. Gee, excuse me, but we don’t get a free ride at all. We spend an awful lot of money being connected to the public Internet backbone, in addition to which we pay a lot of money for our own Internet backbone that links all of our computer centers together at substantial capacity, which is necessary to do what we do.

Moreover, the subscriber has been told (by the telcos and cable ISPs) that if you pay for broadband service, you’ll get access to everywhere on the Internet. But then they’re saying, in the same breath or same paragraph anyway, “Well actually, it’s not quite like that because the places you’ll be able to get to in this broadband mode are only the ones that we’ve done business deals with. So well we’re going to shut out Google unless they pay or, you know, shut out eBay, or Amazon.”

And so this means that the subscriber’s choice has suddenly been circumscribed by what business model the people at these broadband service-providers have been able to invent. My view of their invention is that the business model seems very 20th century and very backwards looking.

Searchblog: In what way?

CERF: They seem to be very focused on video as a service. Lots of people associate broadband and video as being somehow linked at the hip. What they do not understand, apparently, is that people are not necessarily eager to watch video in a streaming mode, limiting themselves to whatever is being transmitted at the moment. And if you’re paying any attention at all to Tivo and iPod and other fairly modern communication services, you’ll find people downloading things and then listening to or watching them later. And if you are no longer watching the video as its being delivered to your hard drive, then you no longer need for it to be delivered in realtime in a viewable form. The broadband providers seem to be reinventing the cable and satellite television service model for the Internet. What mystifies me about this is that they are therefore going after an already hotly completing-for market with a finite revenue stream. So the best they can do is a share of that market. Their entry is not going to increase the market, in my view.

Searchblog: Right.

CERF: They’d be renting or leasing or otherwise paying for content from all the same sources. And all it does is add a competitor who delivers nothing new. For the life of me I do not understand why one would base a business on this 20th century model, when you could be thinking the way the people in the U.K., in New Zealand, in The Netherlands and places like Japan, Hong Kong and Singapore are thinking. What they’re saying is let’s open this broadband pipe up. Let’s make sure that access to it is open in the sense that there isn’t any constraint as to where the subscribers to these services can go on the Internet. Let’s allow innovative new services to enter into the system without constraining them to pay tolls in order to deliver an innovative new service. Let’s look at Yahoo! and Amazon and eBay and Google. Here are four companies that did not need to get permission from the Internet service-provider or to pay a special tariff to the Internet service-provider in order to offer the service.



Part 2 Coming ….


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21 thoughts on “Cerf, Part 1: Excuse me, but we don’t get a free ride at all

  1. “… we don’t get a free ride at all.”

    That’s the quote I have been dying to see from someone at Google. That’s my stance on this whole issue. Nobody gets a free ride now, and that shouldn’t change.

  2. Duke says:

    It looks like the Telcoms are still trying to prove they were right when they lost all that money investing in interactive TV in the 90’s. Once you find something that works – stick with it.

  3. I love my TiVos. The company is something like 6 years old and has less than 2 million subscribers, so there are still plenty of people watching TV the old-fashioned way.

    The entire Internet gets a free ride, or at least a subsidized one, on the cable TV infrastructure that the old-fashioned, “watch-it-live” folks have paid for, or the old-fashioned non-VoIP phone customers have paid for. We’ve yet to see the deployment of a last-mile network primarily financed by anticipated revenues from IP.

    Cerf’s views of broadband in foreign countries are naive. Korea blocks VoIP on its fiber-to-the-home network unless the subscriber pays the ISP for his service; it’s a major revenue source that the ISP counts on to pay for the cable plant.

    If we ever do go to system where people all download their favorite TV shows and watch them off our hard drives, the demand for bandwidth will go up astronomically; instead of transmitting the program once, the carrier will have to transmit the same show millions of times. The Internet protocols aren’t smart enough to handle multicast, and somebody will have pay for those pipes.

    Google pays wholesale prices for best-effort bandwidth, and that doesn’t entitle them to use QoS to provide VoIP on the same link that’s downloading huge HDTV video files using BitTorrent.

    Cerf is making a 20th century argument using 20th century assumptions. He needs to wake up and learn something about how we do networking in the 21st century.

  4. Trogdor says:

    “The entire Internet gets a free ride, or at least a subsidized one, [on the infrastructure simple cable / phone customers paid for].”

    So internet access has been kept at artificially low prices by two giant oligopolies, in order to ensure they keep customers when they find a better business model, and to prevent other companies / technologies from corroding their market.

    It looks to me like the telcos stepped on this landmine all by themselves, and whining that they made a mistake and need to raise their prices (or raise revenue some other way) won’t convince me they should be listened to.

  5. No, that’s not it at all.

    The Internet didn’t come along until the last mile infrastructure was already built. So the incremental cost of adding broadband (routers, mainly) was all the carriers had to cover in order to offer a profitable service. There wasn’t anything stupid about it, it’s simply history.

    However, we’re now at a point where people have a desire for a faster last mile that can’t be provided without a major investment in infrastructure enhancement. The Telcos have no obligation to give this investment away for free, no matter how loud you scream when you demand it.

  6. Adam says:

    ISP’s already have the right to charge what they want for access. What they are asking for is control of content, and that’s not a right they should have.

    Arguments by Richard Bennett above, mirror those of the internet service providers. They are misleading and evasive. Notice that when the claim that the cost of internet access is being subsidized is blown apart, the argument is changed to: “people are screaming at telcos for better service, and give it away free” (probably not true anyway, people would be happy to get the service they’re actually paying for right now) and that somehow this jusitfies their eliminating net neutrality.

  7. I don’t believe I did any such thing. In the first place, nobody has “blown apart” the claim that Internet access is subsidized, and in the second “network neutrality” is not now nor has it ever been the law of the Internet.

    It’s a nice idea in many ways, but it’s never been the case that the Internet has to treat all traffic the same.

  8. Joe Hunkins says:

    More data is needed in this discussion. It seems reasonable for infrastructure builders to seek to recoup their initial investment and make as much profit as the market will bear. In this debate I hear two unappealing sides, both trying to take advantage of current infrastructure and rules:
    1) Old style, inefficient telcos grasping for broadband ad profits.
    2) New style, clever Google quickly forgetting who built the network and that Google has *significant* public obligations due to the scale of their enterprise.

    Although I trust Google more than Telcos, I’m not all that happy having the advertising revenue giant rule this roost either.

  9. Sohbet says:

    It’s a nice idea in many ways, but it’s never been the case that the Internet has to treat all traffic the same.

  10. sohbet says:

    Hi there,

    I just downloaded the plugin and uploaded it into my wp-content/plugins folder, and activated it. However, I don’t think it’s working. Shouldn’t there be something in my “write” screen when I am writing a post, where I can insert a Continue reading tag to expand the post, then a close it up tag to close the expanded post?

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  11. chat says:

    I love my TiVos.

  12. sohbet says:

    It’s a nice idea in many ways, but it’s never been the case that the Internet has to treat all traffic the same.

  13. sohbet says:

    thank

  14. Sohbet says:

    I just downloaded the plugin and uploaded it into my wp-content/plugins folder, and activated it. However, I don’t think it’s working. Shouldn’t there be something in my “write” screen when I am writing a post, where I can insert a Continue reading tag to expand the post, then a close it up tag to close the expanded post?

    Thanks.

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