What would be the DOJ’s interest in having a formal investigation/review of the Google-Twitter agreement?

  • First, as I posted before, Twitter is a rare disruptive and potentially game-changing competitive platform to Google, like Netscape could have been to Microsoft.
    • Simply, does the DOJ want competitors to Google or does the DOJ want Google to continue to foreclose competition to Google by systematically coopting/partnering with potential competitors (like Google has done with AOL, Amazon, eBay, Ask.com, Craigslist, MySpace, and attempted to do with Yahoo and book interests…) so they have no interest/ability to competitively challenge Google in the future?
  • Second, does the DOJ want Google to coopt one of the only two promising technology platforms that currently threaten to disintermediate Google from its customers, like Google has disintermediated most of its competitors with its dominance of search and search advertising?
    • A leading un-coopted potential competitive platform to Google is Facebook’s social networking audience of 300m users. Users go to Facebook to connect, interact and share, not seek information, meaning that it is potentially a disruptive competitive platform/force to Google’s current Internet dominance of search/search advertising.
      • It is important that Facebook be allowed to evolve outside of Google’s revenue subordination and control given that its competitor, MySpace, was originally coopted by partnering with Google early on for $900m.
    • The other leading potential competing platform that Google has yet to coopt, is Twitter, which already has ~85m users and which can be viewed as a potential disruptive and disintermediating competitive force to Google in the future.
      • Users flock to Twitter to get the most immediate information available.
      • Twitter’s astonishing growth proves that there is great unmet demand for immediate information.
      • Moreover, immediate information tends to be the most valuable and monetizable information, i.e. news, market/stock info, sports scores, live coverage, shopping, etc..
      • At least one observer, Sean Parker, a former Facebook President, argues that Twitter could be “bigger than Google”… (if allowed to be.)
      • The DOJ can only learn the answer to this by formally investigating the Google-Twitter agreement.
  • Third, does the DOJ want to hear from the many interested and affected parties that could be harmed by the foreclosed competition that a Google-Twitter agreement could cause?
    • Just like advertisers and newspapers had great interest in not having Google coopt Yahoo in its proposed ad agreement, advertisers, newspapers, and others could be expected to have great interest in keeping Twitter as an alternative competitive platform to Google.
    • The only way the DOJ could learn about the implications for parties threatened by Google’s anti-competitive behavior in the past, is by issuing civil investigative demands (CIDs) to industry to investigate the issue.

In conclusion, the DOJ has learned that in approving Google’s acquisition of YouTube, that the DOJ enabled Google to effectively foreclose the potential for YouTube to become a competitive platform to Google. (YouTube is now the second largest generator of searches in the world after Google per Comscore. In other words, over one quarter of Google’s searches are now generated from Youtube.) Moreover, the FTC’s 4-1 approval of DoubleClick effectively foreclosed any serious competitive display ad-servng platform competition to Google in the future.

  • In short, will the DOJ keep the Internet open to Twitter competition to Google?
  • Or will the DOJ allow Google to foreclose the possibility of Internet competition from Twitter, by allowing Google to coopt and subordinate Twitter via the Google-Twitter Agreement?

My previous Google-Twitter Agreement posts:

Google again has blocked search advertising that promotes political views that Google does not share.

  • On the morning of the FCC’s net neutrality vote last week, Bret Glass of ExtremeTech.com tried to advertise his white paper, that advocated a light regulatory touch, on Google Adwords only to find that Google blocked his ad as not meeting their “guidelines.” (See Mr. Glass’ full recounting of this non-neutral content blocking incident at the end of this post.)
    • This is not the first time Google has blocked content that did not comport with Google’s political/policy agenda. For example, Google blocked anti-Moveon.org ads proposed by a U.S. Senator’s campaign.

The “relevance” of this evidence of net neutrality violations by Google, to the FCC’s just-proposed net neutrality regulations, is that the FCC’s clearly stated purposes are: to prevent companies with market power from infringing on free speech and to ensure that those with market power are transparent about their market practices that affect the free flow of information.

  • More than any other Internet player, the facts and evidence show (DOJ) that Google has market power.
  • Moreover, advertisers routinely complain that Google’s ad auction process is a non-transparent “black box” because it has a “quality score” that Google can alter to arbitrarily bury a website at the bottom of its ranking and ensure that it is not found. TradeComet filed an private antitrust suit alleging this.
  • Furthermore, Google admits to providing $270m in free adwords to Google-friendly organizations, but will not disclose who they are because that might show that Google is skirting lobbying, election, and campaign finance disclosure laws by laundering their Adwords market power through astroturf groups supporting Google’s public policy agenda. (In a Google keyword auction, if Google or one of its preferred surrogates is “bidding” on a particular keyword, no one can out bid “the house.”)

Much more troubling is Google’s public comments indicating their “black box” search engine and auction processes are not neutral, but are affected by Google’s political/policy biases.

  • In a Google’s blogpost in February, Google Senior Vice President Jonathan Rosenberg candidly explained Google’s power over finding the world’s information: “We won’t (and shouldn’t) try to stop the faceless scribes of drivel, but we can move them to the back row of the arena.”
  • Google CEO Eric Schmidt, on judging political “truth” in an FT interview:
    • “He forecast that, within five years, “truth predictor” software would “hold politicians to account”. Voters would be able to check the probability that apparently factual statements by politicians were actually correct, using programmes that automatically compared claims with historic data, he said.”
    • “Politicians “don’t in general understand the implications” of the internet, Mr Schmidt argued. “One of my messages to them is to think about having every one of your voters online all the time, then inputting ‘is this true or false?’ We [at Google] are not in charge of truth but we might be able to give a probability.”
  • This Google role as arbiter of political truth is still at the forefront of Google CEO Schmidt’s agenda because only last week he told the Washington Post in a meeting reported by Mike Musgrove that:
    • I spend so much time in Washington now because of the work that I’ve been doing, I deal with all these people who make assertions without fact,” he said. Policy people “will hand me some report that they wrote or they’ll make some assertion, and I’ll say, ‘Well, is that true?’ — and they can’t prove it.” Perhaps that could change some day, he suggested. Technology could help.”

       

 

 

In conclusion, the evidence mounts that neither Google’s search engine nor its keyword auction system are neutral. It is also clear that Google has long aspired, and still aspires to help its users discern what Google believes is “the truth” in the political/policy arenas.

Given that Google, the Adminstration and the FCC are all on the same page that more transparency is good, why shouldn’t Google be more transparent in how its secret algorithms and black box processes determine what information is determined to be “drivel” that Google needs to send to “the back row of the arena” of politics and policy in Washington, as Google’s Mr. Rosenberg so eloquently and trenchantly said earlier this year to all Google employees.

  • Does Google believe Mr. Glass’ white paper is “drivel” because it disagrees with Google’s position?

Given that Googleopoly is the world’s dominant information gatekeeper, isn’t it relevant for the world to know what variables drive what political/policy information the world finds?

  • And more importantly what are the variables/biases that Google believes will enable Google’s “truth predictor software” to accurately predict the “truth?”
 

 

I guess the world would be a simpler place for Google, if people did not have to bother with judgement, critical thinking or learning, because Google could algorithmically provide for them what the “truth” is for any political or policy question.

 

********************************

 

 

From: Brett Glass <brett@lariat.net>
Date: October 24, 2009 16:23:04 EDT
To: dave@farber.net, Ip ip <ip@v2.listbox.com>
Subject: Google “disapproves” net neutrality ad

Dave, and everyone:

Several months ago, I noticed that when one typed the phrase “network neutrality” into Google’s search engine, the top listed results all advocated Google’s regulatory agenda. In fact, Google was contributing free advertising to groups which advocated “network neutrality” regulation (see http://www.google.com/grants/). This gave them an unfair advantage. They could place very high “bids” but not be charged for them, so their ads were guaranteed to show up on Google’s result pages whereas paid ads might not.

I therefore created a simple advertisement, using Google’s “AdWords” facility, which pointed to a white paper I had written on the issue. This white paper advocated regulation only in instances of anticompetitive practices or market failure, and recommended that content and application providers (including Google) who could serve as gatekeepers be scrutinized for anti-consumer practices as well as ISPs. (You can see the paper at

http://www.brettglass.com/principles.pdf

on my Web site.)

Then, on the morning of the FCC’s vote on a Notice of Proposed Rule Making on “network neutrality” regulation, I received the following notice from Google:

 

Subject: Your Google AdWords Approval Status

 

Hello,

 

Thank you for advertising with Google AdWords. After reviewing your

account, we’ve found that one or more of your ads or keywords doesn’t

meet our guidelines.


I entered Google’s Web interface, and discovered that — during the days before today’s FCC meeting — the ad had received large numbers of clickthroughs. This number dropped to zero, of course, when Google blocked the ad.

I further discovered that the supposed “reason” for blocking the ad was given as “Destination URL not working.” So, I checked the Web server and its logs. I discovered that in fact the server had been working perfectly. What’s more, according to the log, Google’s “bots” had visited the URL of the document twice less than 24 hours before and had issued conditional “GET” requests. Each received a “304” response (meaning that the page was present and had not been recently changed). The log entries looked like this:

crawl-66-249-67-74.googlebot.com – – [21/Oct/2009:10:49:45 -0600] “GET /principles.pdf HTTP/1.1″ 304 0 “-” “Mozilla/5.0 (compatible; Googlebot/2.1; +http://www.google.com/bot.html)”

rate-limited-proxy-209-85-238-139.google.com – – [21/Oct/2009:21:21:53 -0600] “GET /principles.pdf HTTP/1.1″ 304 0 “-” “
AdsBot-Google (+http://www.google.com/adsbot.html)”

Google’s statistics for the ad showed that after it had received these POSITIVE responses, the clickthrough rate dropped to zero as Google dropped the ad.

I immediately resubmitted the ad to Google’s advertising system, and at first the site said that the ad was “pending review.” When I checked later, Google’s site said that it had again rejected the ad again because its destination URL was supposedly “unreachable,” even though Google’s “bots” had made two more successful visits to the document since that time:

crawl-66-249-67-74.googlebot.com – – [22/Oct/2009:16:15:09 -0600] “GET /principles.pdf HTTP/1.1″ 200 31639 “-” “Mozilla/
5.0 (compatible; Googlebot/2.1; +http://www.google.com/bot.html)”

rate-limited-proxy-209-85-238-139.google.com – – [23/Oct/2009:00:55:13 -0600] “GET /principles.pdf HTTP/1.1″ 200 31639 “
-” “AdsBot-Google (+http://www.google.com/adsbot.html)”

I have resubmitted the ad a third time, and at this writing it is still “pending approval” and is not appearing.

In the meantime, other ads, pointing to other pages on the same group of servers, have continued to be active. Only the one ad pointing to the paper regarding “network neutrality” regulation — which advocates that content and application providers be scrutinized to the same extent as ISPs for anti-consumer behavior — is blocked.

It is noteworthy that Google has advocated that “network neutrality” regulation be applied to ISPs such as myself (even though we have not ever censored legal content), but at the same time has advocated that it not be subject to such regulations, even though it serves as a gatekeeper itself. It has even had this change written into the rules proposed in the NPRM released by the FCC on Thursday.

I will leave inferences from these events to the reader.

–Brett Glass

 

Like the child that plays with matches is surprised when the fire he started threatens to burn his own house, Google CEO Eric Schmidt shared his gulity conscience with the Washington Post last week — i.e. that the net neutrality regulation fire Google started and fanned, would be “terrible,” if it burned Google and “led the government to involve itself as a regulator of the broader Internet.”

  • Lobbying the Washington Post, after its editorial, “The FCC’s Heavy hand,” opposed net neutrality, Google’s CEO Schmidt admitted to the Post that: “It is possible for the Government to screw the Internet up, big-time.”
    • I wonder if anyone asked Mr. Schmidt if it is possible that the Government could screw broadband competition up, big-time?

Did it not occur to Google that bankrolling a flame-thrower-style net neutrality campaign urging preemptive, draconian regulation to prevent a potential problem, might not torch the decade of strong bipartisan consensus and calm in the Congress and at the FCC — to not regulate or tax the Internet?

  • If Google really feared that “government regulation could screw the Internet up, big-time“… wouldn’t Google stop screaming at the top of its lungs “Potential fire!” Potential fire! Potential fire! in a Washington theatre filled with legislators and regulators…

 

The FCC’s proposed Open Internet regulations (NPRM) are sweeping and audacious.

First, the FCC proposed rules are audaciously attempting to implement the introduced-but-never-passed Markey bill (HR 3458) entitled: the “Internet Freedom Preservation Act of 2009.” The purpose, premises, language, and core positions are nearly identical for anyone willing to forensically compare the NPRM and HR 3458.

  • This presents a substantial legal problem for the FCC in that the premises and justifications undergirding their current NPRM can be found no where in existing law as the FCC’s own thin 28 line legal justification confirms (paras 83-87).
  • It is hard to comprehend how such uncertain FCC legal authority somehow can be transformed by the FCC into more regulatory and investment certainty as the FCC declares (para 50).

Second, the sweeping premises undergirding the NPRM are asserted as givens, but are unsupported or unproven in the NPRM. These implicit premises are: facilities-based competition is a failure and can’t succeed; competition can not serve or protect consumers’ interests, because facilities owners have profit motives; broadband providers must be regulated; ISPs discriminate in “socially inefficient ways;” and FCC regulators can produce superior outcomes to a competitive market. (paras 67-74).

  • This presents another substantial legal problem for the FCC. Just this summer the D.C. Circuit Court of Appeals rejected the FCC’s cable cap rule because of the FCC’s unsupported and not credible assertions about insufficient market competition.

Third, the new proposed fifth nondiscrimination principle is transparently a de facto public utility principle (para 105).

  • The FCC believes a “bright-line rule against discrimination” (para 109) is necessary.
  • Which exceptions or kinds of discrimination the FCC proposes to permit and not permit (paras 135-137) speaks volumes about the real purpose behind what I call the FCC’s new public utility principle.
  • Of course the FCC has to permit discrimination for the governmental purposes of emergency communications, law enforcement, public safety, homeland and national security.
  • And of course the FCC knew it would be untenable to not allow reasonable network management for network congestion mitigation, quality-of-service and blocking unwanted or harmful traffic.
  • What’s left to regulate is the real purpose behind the NPRM: economic regulation of managed and specialized services (paras 148-153) and network design/engineering micromanagement though a “Technical Advisory Process” (para 177).
    • What’s most telling about the real purpose here is the FCC’s definition of “nondiscriminatory” as not charging anyone “for enhanced of prioritized access to subscribers.”
    • The transparent intent of this fifth principle is to use economic regulation to de facto impose a “dumb-pipe” technical model, and a public utility economic/business model, where little to no normal competitive practices — of differentiation, customization, prioritization, and diversity of choice — would be permitted.
    • The FCC’s stated reason for this is that ISPs “may attempt to extract some of the profit earned by content, application, and service providers by charging them fees for providing access or prioritized access” (para 68).
      • The real purpose here is to ban normal two-sided business models and prohibit ISPs from vertically-integrating content, applications, and services with their broadband service — which are currently normal, legal, sound, and profit-enhancing business practices that happen today in most every segment of the broadband industry to one extent or another.
      • The FCC apparently has no appreciation of the systemic risk and economic disruption/damage to growth, jobs, innovation, and the Internet — that such unnecessary and unjustified heavy-handed regulation could cause.

Fourth, the FCC’s modified fourth principle appears to be a new broadband un-bundling principle.

  • The FCC claims that its change of this fourth net neutrality principle makes “no substantive difference” (para 98).
  • However, the FCC’s tortured change of the principle’s predicate from “consumers are entitled to competition” (para 5) to ISPs “may not deprive users of the user’s entitlement to competition among network providers…” is easy to interpret this reworking as the pretext for the FCC to force competitive broadband providers to wholesale unbundle their network’s elements, to create new broadband resellers/”competitors,” in a re-do of the disastrous telco unbundling micromanagement of the late 1990’s i.e. line-sharing, pick and choose, TELRIC pricing, and UNE-P.
    • Watch to see if the FCC’s expected special access proposed rulemaking signals that it may unbundle competitive broadband special access services.

Fifth, also pay attention to the proposed metamorphisis of the first net neutrality principle.

  • Indeed to further this interest in ecouraging freedom of expression, we propose that the first rule make explicit that users can both send and receive the content of their choice.” Para 95).
  • This is a major change and has big implications for First Amendment freedom of speech, given that the FCC/Government is proposing new regulatory oversight/monitoring of what consumers send and receive over the Internet to ensure the Internet is “open.”

In conclusion, the omni-takeaway from these proposed Internet regulations is that they would dramtically shift the Internet from being user-centric and user-governed to being more FCC-centric and FCC-governed.

  • The ultimate irony of this Open Internet NPRM is that the supposed goal was to empower “innovation without permission,” but what the proposed rules would actually do is set up a new labyrinthian process for network operators to ask the government for permission to make any substantive changes in the design, management, operation, or business of their broadband network.
  • At core this NPRM could aptly be named the “Mother may I” NPRM.

NetCompetition.org Comments on FCC Open Internet NPRM

“The best way to preserve the open Internet is to preserve current pro-competition policy”

WASHINGTON – In response to the Federal Communications Commission’s proposed Open Internet NPRM today, NetCompetition.org Chairman Scott Cleland offered these comments for attribution:

· The best way to preserve an Open Internet is to preserve the pro-competition policies that currently sustain an Open Internet, not fundamentally change the character of the Open Internet by replacing competition with new Government regulation as the engine of Internet openness.”

· “The fundamental unease surrounding this proposed rulemaking is whether new, expanded, and formal FCC regulations could fundamentally transform the long-privatized Open Internet into a de facto public information commons or morph private broadband companies into de facto public utilities.”

 NETCompetition.org is a pro-competition e-forum representing broadband interests. See www.netcompetition.org.

 

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