Intellectual Property Law

Expert: Google Owes Success to Carrier Discrimination

By Cynthia Brumfield

(Washington, DC) The idea that broadband carriers might discriminate in favor of a particular service or application is generally considered to be a bad notion, but some experts say broadband carrier discrimination might actually help innovation. Speaking at the Internet Video Policy Symposium yesterday former FCC Chief Economist and current George Mason University professor Tom Hazlett pointed to Google's 2003 deal with AOL, a pact premised on carrier discrimination, as one key factor leading to the search engine's meteoric rise.

AOL's deal to give Google exclusive search engine rights on its service was "the break of its life," Hazlett said. At the time AOL was the dominant Internet access provider in the U.S. and "Google paid for that, they paid an ISP for that."

"That was a highly discriminatory action" that nonetheless spurred Google, and the Internet, to great heights.

Simon Wilkie, another former FCC Chief Economist and currently a professor at USC, took a more nuanced approach. Discriminatory against a service or application in favor of another service or application is "OK so long as you don't block it."

FTC economist Patrick DeGraba said that a particular form of arguable discrimination, traffic shaping, doesn't rise to a level of anticompetitive concern unless the broadband carriers are deemed to have market power. "If there is market power, then the kind of traffic management becomes an issue."

But Cowen & Co. Chief Technology Strategist was more blunt. "I have a hard time believing that [carrier discrimination] would be in the best interests of consumers."

Full post as published by IP Democracy on March 20, 2008 (boomark / email).