Google's (GOOG) Wants To Ruin The Internet

20060226gmaillogogoogletmGoogle (GOOG) pretty much gets to do what it wants to do. That is a little less true now that its earnings are slowing and its stock price is down. But, it is still the ruler of the internet and will do what it can to keep its spot.

One of the most debated issues about the worldwide web, especially in the US, is whether all companies and all consumers should have equal access to the internet regardless of their size or status as users.

The current truce among the FCC, internet providers, and web properties is called “net neutrality”, a kind of all for one and one for all fantasy which allows the poor to live in the same homes as the rich. It is actually anarchy,. A shut-in living in Akron can download six hundred huge movie files at one time and suck up all of the bandwidth from his neighbors. He is supposed to be charged the same amount that they are.

On the internet company side, every firm wants fast service. The better the website works for the consumer, the happier that consumer is.

Google wants to get an edge over its competition. According to The Wall Street Journal, “Google’s proposed arrangement with network providers, internally called OpenEdge, would place Google servers directly within the network of the service providers.” Moving all of those servers to new locations where they take the best advantage of telecom and cable pipes would be expensive.

While the plan would help Google and its users, it is hard to see what is in it for the carriers. Or, is it? While it is not clear yet, it would be a safe gamble that Google wants to pay those companies for the privilege of setting up so close to their gateways. There could be a lot of cash in that for an industry which is slowing and becoming more competitive as the phone companies try to take market share from cable.

That is where the principle of “net neutrality” falters. If companies or consumers are willing to pay a large price for substantially upgraded service, why should they be prevented from doing so? The extra money going to carriers should only help them improve their overall infrastructure, unless they want to horde the cash like money center banks do with their bailout money.

Google may end up paying for a better internet, but, at least early on, it would make it worse for almost every other web company in America. When one company gets faster service, the rest rarely benefit.

Douglas A. McIntyre