Thursday, December 4, 2008

Response to phone companies' "Google bandwidth" report



Earlier this week I thought that the announcement of a broadband access "call to action" was an encouraging sign that the phone and cable carriers could set aside their differences with Internet companies and public interest groups over network neutrality, and focus on solving our nation's broadband challenges. Unfortunately, a report issued today suggests that some carriers would still rather point fingers and keep fighting old battles.

Scott Cleland over at Precursor Blog is, of course, not exactly a neutral analyst. He is paid by the phone and cable companies -- AT&T, Verizon, Time Warner, and others -- to be a full time Google critic. As a result, most people here in Washington take his commentary with a heavy dose of salt.

The report that Mr. Cleland issued today -- alleging that Google is somehow unfairly consuming network bandwidth -- is just the latest in what one blogger called his "payola punditry." Not surprisingly, in his zeal to score points in the net neutrality debate, he made significant methodological and factual errors that undermine his report's conclusions.

First and foremost, there's a huge difference between your own home broadband connection, and the Internet as a whole. It's the consumers voluntarily choosing to use our applications who are actually using their own broadband bandwidth -- not Google. To say that Google somehow "uses" consumers' home broadband connections shows a fundamental misunderstanding of how the Internet actually works.

Second, Google already pays billions of dollars for the bandwidth and server capacity necessary to connect our data centers together, and then to carry traffic from those data centers to the Internet backbone. That is the way the Net has always operated: each side pays for their own connection to the Net.

Third, Mr. Cleland's cost estimates are overblown. For one, his attempt to correlate Google's "market share and traffic" to use of petabytes of bandwidth is misguided. The whole point of a search engine like Google's is to connect a user to some other website as quickly as possible. If Mr. Cleland's definition of "market share" includes all those other sites, and then attributes them to Google's "traffic," that mistake alone would skew the overall numbers by a huge amount.

Mr. Cleland's calculations about YouTube's impact are similarly flawed. Here he confuses "market share" with "traffic share." YouTube's share of video traffic is decidedly smaller than its market share. And typical YouTube traffic takes up far less bandwidth than downloading or streaming a movie.

Finally, the Google search bots that Mr. Cleland claims are driving bandwidth consumption don't even affect consumers' broadband connections at all -- they are searching and indexing only websites.

We don't fault Mr. Cleland for trying to do his job. But it's unfortunate that the phone and cable companies funding his work would rather launch poorly researched broadsides than help solve consumers' problems.

24 comments:

NJblogger said...

And, of course, your comments are entirely neutral?? I suggest we have to take your comments with a "heavy dose of salt" as well because you also have a horse in this race that is paying for your opinion.

Robert Chase said...

Actually Google says it like it is. Their motivations are not just market share and money motivated which is why they succeed. They provide consumers services that they want rather than trying to force consumers to buy services they don't want and limiting their choices.

A. said...

Nice response. A headbutt to the guts of the issue(s) here.

They really should leave this argument alone.

Guess capping/limiting/etc. isn't good enough, they still want to pick this lame fight. So sad.

NullVariable said...

What is it with companies that can't innovate taking the issue to the government to keep themselves alive instead of working to reinvent themselves or just dying off? (Think RIAA and the Big 3 Auto Makers)

Tim the Technocrat said...

But the tubes, you see its not a truck, its like tubes.... and all the googleing, it gets in the tubes and makes it slow! Seriously though, Google, keep fighting for net neutrality. The truly unfortunate piece of this situation is that if the phone/cable companies were in a real free market instead of the localized monopolies which we are subject to now, they probably wouldn't have the money to finance a PR blitz to extort more money out of internet users. Pipe is pipe, I pay for Up and Down and so does everyone, including Google. How would it improve anything to charge me again for the bandwidth I already pay for when I serve a site from my connection?

jostein said...

Just to show how flawed the study is. Copied with permission:

Someone failed at math!

Lets say google used 100% of all bandwidth, they would need to pay for 334mil/.165 = 2024.24. Now to calculate the overage: Other peoples share = 44000-2024 = 41976 divide by google payment (2024.24) = 20.7 - magic - the overage number didn't move! Still 21.

Now lets try the reverse.

Say google used 1% of trafic: 334/16.5 = 20.25 - other people will then pay 44000-20.25 = 43980 divide by google cost = 2172, adjust for 1% usage (* .01) = 21.72.

My head asplode - is seems no matter how much google uses they always seem to have an overage of 20 to 22 times as much!

Could it be, no, but could it be that home users pay 21 times too much for bandwidth??

No couldn't be, then this firm "funded by broadband companies" would have to tell it's people to drop prices by 22 times.

Seriously this has to be the stupidest study ever funded. I wonder if the authors of the study put their names on it. They completely ignore the fact that the recipient of the traffic should also pay for it, so lets see how much of that 44bil is home users, adjust for 16% and then we'll see.

Edit: As I thought, the authors did not put their name on it. And to make it stupider the 44bil is consumers bill only! Doesn't include costs paid by any other company!

They are seriously comparing the costs of home users vs the cost of google, and ignoring every other site on the internet! It's like they think the only thing home users do is browse google and nothing else.

At the very least adjust that 44bil by 16% to at least account for that. That would turn the overage into 3 times as much - which would imply that wholesale prices for bandwidth are 3 times cheaper than retail.

Actually ignore that last conclusion - the study is riddled with so many errors I would not want to draw any conclusion whatsoever from it.

Take a look at this little gem:

...[some math]... trucks pay 4 cents/mile, cars pay 1 cent/mile. So "trucks/businesses pay over four times more for their usage of the U.S. Interstate Highway system than cars/consumers do."

Is he brain dead? I mean if you want to compare adjust for the weight of the vehicle, the volume of it, the number of people you could fit in it, something.

But no - just straight compare.

(PS. Damage to roads goes by 4th power of weight. So 3000lb car/2 axles=5.1 * 10^12 of damage, and truck is 34000 per axle=1.3 * 10^18 of damage - so trucks do 254,901 times as much damage to roads as cars do, but they pay just 4 times as much.)

And he testified before congress! Is there some way to tell them he's an idiot?

You have to look at the graph on page 11 - he extrapolates data in such a way that he assumes that by 2012 google will have a 130% share of the video-to-pc market. Yes you read that number right, google will have 30% more share than actually exists. Not sure how they'll manage that.

PS: Someone please register for his site (he - blog author - is the author of the "study") and post this as a comment - I give you copyright permission. Let's see if he'll have the guts to post it.

Jan said...

It appears Mr Cleland has decided not to post comments received on this blog entry. I posted one yesterday right after the piece went up but it hasn't appeared (neither have any others).

Here's mine http://tinyurl.com/5rgjd7

Request for Insanity said...

Pay for the pipes? We already are! Every customer, be it me at home or Google, pays for bandwidth. Just like in the 60's when telcos added 11 T1 carrier systems to accommodate all the paying customers, they should just eat the cost now. They are getting paid and making the pipes fatter is the cost of doing business. It's not like they are giving anything away for free... every fattened pipe is more $$paying customers$$ for them!

martinvars said...

I founded www.viatel.com, www.jazztel.com, www.ya.com and www.fon.com. Anyone who builds telcos knows that the main driver for people to want bandwidth is Google and more recently Youtube. If it wasn´t for Youtube, Hulu, Joost and other video sites consumers would not want to pay more for services such as FIOS of Verizon. So why attack the hands that feed you. When have the telcos created services that drove people to use their networks?

sven said...

Thanks to Mr. Cleland, congress will become even less aware of how the internet actually works.

ray said...

I am very interested in your thoughts on this subject matter.

How do you think this Business Model will play out for the telcos? Or is it, and maybe I'm looking at things wrong? Would love to get the communities take on this!

please look at slide 31. What do you think?

http://www.slideshare.net/TYR/telco-20-introduction-to-2sided-markets-presentation?type=po werpoint

from telco2.net -- which is a ‘Telco 2.0 Initiative’, "...a new industry programme focused on helping with this thorny question: “How do we (telcos, handset manufacturers, Media companies, IT players, NEPs, etc) make money in an IP-based world?”

"primary focus is on business model innovation, new products and services, new markets and disruptive technology."

this type of business model seems to be being pushed very hard with telecom executives.

http://www.telco2.net/blog/2006/06/welcome_to_the_telco_20_blog.html

Robert Chase said...
This comment has been removed by the author.
Kaps said...

When you are the big dog, everyone is gonna come after you...

Douglas Fir said...

While Google may not fault Mr. Cleland for trying to do his job, I certainly do. Any role that requires an assault on logic and the spread of confusion is better left undone.

The basic claim is that a public company (Google) uses 20x more of an outside service (network bandwidth) than it pays its suppliers for using. Could this ever be true for any company and any service? Could a company use 20x the steel, water, fuel, electricity or other supply than it pays for--month after month and year after year--without the vendors noticing? Without an overdue notice? Without the deliveries being cut off? Without a lawsuit?

Mr. Cleland's claims therefore are incorrect. They are incorrect irrespective of net neutrality, his financial support, Google's actions, and Google's network bandwidth suppliers. They are false on their face and serve only to confuse the unthinking. The only bright spot in this is that the job was done so poorly.

Eric said...

In case any one missed the bus. This whole "google uses up the internets" sham started when service providers decided they wanted a piece of google's revenue.

The claim is people use google, this uses bandwidth and as such google should pay for this luxury. (Not that they are not already paying for bandwidth, but they should also pay for those who visit their website).

Now, how would you get someone to pay twice? How would you get google to pay you when all you have are broadband subscribers?

The mob has been doing it for years. It's call protection money.

Since you can only control your customers and their traffic you really only have to threaten with the idea of throttling traffic. Just don't let your customers know you will be sacrificing their online experience.

Now, you can get paid by both your customers and another organization you have nothing to do with!

How awesome is that?

True it is a bit unethical, but hey a fella has to make a buck (twice).

Peter Collins said...

While all the calculations are interesting, it would seem to boil down to a more simple point.

Joe User pays CableCo/Telco for internet access. With that payment, Joe Homeowner is (currently anyways) entitled to access any website they like.

Small/medium/big website owner hosts/pays Telco/hosting Company for the ability to provide bandwidth to make sure the website is available for Joe User to access.

Joe User is entitled to a level of service determined by his payment.

Website Owner is entitled to a level of service determined by that payment as well. If the website user does not pay for enough bandwidth, Joe User may have problems accessing Website Owner's site.

Jordan said...
This comment has been removed by the author.
Benno said...

It would be interesting if Google were to threaten to flip the network neutrality coin on providers by determining where the request was coming from and altering the responses. The responses could provide two messages:

1- Your ISP is trying to limit your access to Google through anti-network-neutrality practices.

2- Your ISP has competitors in your area, including X, Y and Z...

Of course, that second point assumes that there is real competition in broadband providers, and that any of the major competitors in the market are proponents of network neutrality, so I doubt that would work for Google, but it still made me chuckle.

Sonny said...

GOOGLE is hogging bandwidth?????

That is insane.

The amount of bandwidth Google "uses" is proportionate to the number of people who use it...

So, basically, the INTERNET is hogging bandwidth.

Dest said...

Please excuse the idiot from NJ.

ottothecow said...

I have never been able to figure out why they try to take stands like this when they go against net neutrality.

I PAY the phone company for the ability to access google and google serves the pages up to my ISP (and then to me) for free. If anything, google could be charging for ISPs to connect...who would want to subscribe to an ISP without google?

Jonnan said...

No, I'd have to say he's got it exactly right - there's no doubt about it - Google should be paying for their use of bandwidth!

I will also be talking to my phone company about how they should be paying me for the privilege of my receiving calls on my home phone, and the extraordinary chutzpah of the way the powercompany has not paid me properly for the privilege of storing their positive and negative electrical charges on my household lines.

Spam said...

Well, I guess I should demand that my ISP stop charging for my internet connection immediately! They are basically saying that the $60 I'm paying them each month should come out of Google's pockets, right?

Stupid ISPs. My cable/internet bill goes up every year, and now they're crying as if I should feel sorry for them? Oh puleeez.

Just think if Yahoo or Microsoft were the market search leader. Their graphics and flash laden pages would bring the internet to a crawl. At least Google's search engine and apps are optimized for speed and mostly text.

Give me a break you stupid telecoms.

Dave said...

Rick
"Don't feed the troll." Cleland's mistakes usually effectively discredit him. Every time he's discussed, he can raise his charges.
Dave Burstein