Google And Verizon Propose Net Neutrality Proposal – Look At The Bigger Picture
Google and Verizon, two powerhouses, have outlined a seven point net neutrality proposal that has the Internet buzzing with comments, and if acted upon could well change the way consumers get and access information. One notable aspect of the policy outlined is the differentiation between the Internet and the mobile Internet. It appears that a distinct definition on mobile internet is surfacing. This makes sense because cell companies are the primary conduit for mobile internet, and with limited bandwidth, they run great risks of overload. It is this distinction that has some carriers implementing higher data plan fees and even avoiding offering unlimited plans.
Google and Verizon stated two main goals:
1. Users should choose what content, applications, or devices they use, since openness has been central to the explosive innovation that has made the Internet a transformative medium.
2. America must continue to encourage both investment and innovation to support the underlying broadband infrastructure; it is imperative for our global competitiveness.
The plan outlines seven points that if acted upon could transform the way we get our information and even offer priorities to certain content over other content. You will have to read a lot between the lines here, but what is happening is two industry giants are teaming up to possibly set policy that will impact the daily lives of consumers in nearly every facet of their daily lives because we are now so connected to the net.
The Seven Points:
First, both companies have long been proponents of the FCC’s current wireline broadband openness principles, which ensure that consumers have access to all legal content on the Internet, and can use what applications, services, and devices they choose. The enforceability of those principles was called into serious question by the recent Comcast court decision. Our proposal would now make those principles fully enforceable at the FCC.
Notice the distinction between wired and wireless here. Most consumers have not yet realized that there are two classes of Internet, but this is indeed the case.
Second, we agree that in addition to these existing principles there should be a new, enforceable prohibition against discriminatory practices. This means that for the first time, wireline broadband providers would not be able to discriminate against or prioritize lawful Internet content, applications or services in a way that causes harm to users or competition.
Importantly, this new nondiscrimination principle includes a presumption against prioritization of Internet traffic – including paid prioritization. So, in addition to not blocking or degrading of Internet content and applications, wireline broadband providers also could not favor particular Internet traffic over other traffic.
Again, a wired distinction. This, along with point #1 seem to offer nothing new at first blush, but the use of “wireline” is setting up for a distinction that becomes more clear in the following points.
Third, it’s important that the consumer be fully informed about their Internet experiences. Our proposal would create enforceable transparency rules, for both wireline and wireless services. Broadband providers would be required to give consumers clear, understandable information about the services they offer and their capabilities. Broadband providers would also provide to application and content providers information about network management practices and any other information they need to ensure that they can reach consumers.
It appears that “wireline” is now shifting to “Broadband” in the language of the points.
Fourth, because of the confusion about the FCC’s authority following the Comcast court decision, our proposal spells out the FCC’s role and authority in the broadband space. In addition to creating enforceable consumer protection and nondiscrimination standards that go beyond the FCC’s preexisting consumer safeguards, the proposal also provides for a new enforcement mechanism for the FCC to use. Specifically, the FCC would enforce these openness policies on a case-by-case basis, using a complaint-driven process. The FCC could move swiftly to stop a practice that violates these safeguards, and it could impose a penalty of up to $2 million on bad actors.
This would apply to “broadband/wireline” services. There is a distinct openness to what Google and verizon want to have happen on broadband services. It is the core of the Internet, and everyone will have open access.
Fifth, we want the broadband infrastructure to be a platform for innovation. Therefore, our proposal would allow broadband providers to offer additional, differentiated online services, in addition to the Internet access and video services (such as Verizon’s FIOS TV) offered today. This means that broadband providers can work with other players to develop new services. It is too soon to predict how these new services will develop, but examples might include health care monitoring, the smart grid, advanced educational services, or new entertainment and gaming options. Our proposal also includes safeguards to ensure that such online services must be distinguishable from traditional broadband Internet access services and are not designed to circumvent the rules. The FCC would also monitor the development of these services to make sure they don’t interfere with the continued development of Internet access services.
Now a distinction on allowing a new tier on Broadband Internet. The FCC would have some controls, but in reality the commission does not have the resources to govern what happens.
Sixth, we both recognize that wireless broadband is different from the traditional wireline world, in part because the mobile marketplace is more competitive and changing rapidly. In recognition of the still-nascent nature of the wireless broadband marketplace, under this proposal we would not now apply most of the wireline principles to wireless, except for the transparency requirement. In addition, the Government Accountability Office would be required to report to Congress annually on developments in the wireless broadband marketplace, and whether or not current policies are working to protect consumers.
The transparency requirement disappears here, and the use of the phrase “most polices” allows a lot of latitude.
Seventh, and finally, we strongly believe that it is in the national interest for all Americans to have broadband access to the Internet. Therefore, we support reform of the Federal Universal Service Fund, so that it is focused on deploying broadband in areas where it is not now available.
Google wants the Internet everywhere. This is not really news. It is through the Internet that Google makes all of its revenue. What is interesting here is that Google’s latest foray in business is highly centered on the wireless side of the house, and the proposed policies give a loophole a mile wide to the wireless side of the business.
Now satellite radio investors may be wondering what this has to do with Sirius XM. The answer is that at the current time there is not a huge impact, but in the future there could be. What if Sirius XM was the “preferred” music provider over a Verizon network and received priority in getting their signals through? What if the “preferred provider” was Google’s as yet launched Google Music?
The fact of the matter is that Internet will penetrate more and more devices in the months and years to come. The distinction of “mobile” that falls under different rules will allow any industry giant to have more control over establishing policy. It creates a wild west out there that lets the biggest players get entrenched with millions of consumers already on board. By the time an annual meeting happens, any new rule would have to be weighed against millions of consumers that are already using a service.
There is a lot happening in the world of the Internet that can impact the world of audio entertainment. Sometimes it is prudent to take a look at the bigger picture and to understand the players involved. Sirius XM is a large company with a substantial subscriber base that drives a lot of revenue into the company. That being said, it pales in comparison to the Verizon’s and Google’s of the world. These players have deeper pockets, more lawyers, and more lobbyists than anyone out there.
With more and more entertainment being delivered over wireless networks, it is only a matter of time before the wireless world becomes just as important as our wired world.
Frère Muscle, Frère Muscle,
Dormez-vous? Dormez-vous?
Sonnez les matines! Sonnez les matines!
Ding, dang, dong. Ding, dang, dong.
Roadkill-
Wake me up when internet radio has a business model.
There is no barrier to entry. The cost are too high and getting worse. Nobody is monetizing users in any significant way.
I’m with ya brother . . see below
The fact that there is no barrier to entry is what makes this so dangerous to satellite.
It is not just about revenue, but cost as well.
satellites cost money. Royalties cost money. Internet radio pays higher royalties. Satellite pays for satellites.
The business models of services like Pandora and Slacker are shifting in order to try to offset these costs.
Pandora is successful in getting tens of thousands of people per day into their data base and test driving their product. There is value there that will get monetized. This is all so new that it will take time to play out. It is NOT going away though.
So they try it.
How many continue to use it?
That is the question I want answered!
I don’t think my posts are going through. Did internet radio go away? jut trying to see here
As long as SIRIUS RADIO can continue to offer unmatched content in broadcasting its music, sports, news, talk, entertainment, traffic and weather channels… The company will prevail! Google is big but have failed on several projects and I do not think they can complete coming this late in the game.
It is about mobile. Google is not only competing. In 2010 they have dominated even the iPhone.
I agree that Sirius XM’s content is a big differentiator. They need to try to keep that content. The mobile world is shifting, and Sirius XM needs to keep up these deals and have them include mobile.
The Stern deal is important. The original deal seems to have lacked the teeth to allow mobile streaming of his show. Lesson learned for Sirius XM. Hopefully they are getting mobile included in all of their deals now
ahhhhh, there you are Muscle! well? aren’t you going to rebut this piece of gravel that Spencer has placed into your eye socket?
here, I’ll give you a little push-start; on the count of three you pop the clutch . . .
seems to me I once read somewhere that Sirius Buzz has the highest traffic of any satellite radio site on the web yet the poor bastard who runs the site makes less than TEN CENTS AN HOUR (lol) . . . yeah, I just found it; here it is:
“Thank you very much for the kind words. It is readers like you that made SiriusBuzz the highest traffic satellite radio website.”
“Each month I look at what comes in the door and compare it to the hours spent researching and writing and scratch my head wondering about how little I actually make from this. If I broke it down, it is probably less than 10 cents an hour.”
Ya know sumthin Muscle? I guess it would be fair to say that Sirius Buzz is the Pandora of satrad websites!
Cool free stuff . . . lousy business model.
ok, now I’m very tired and need to rest; go ahead Muscle, you take over from here . . . I already did all the heavy lifting for ya.
The difference is that I am not in this for the money or for a business. I do it because I like to do it. There are indeed those out there who do it for money, or at least try to. More power to them.
my point really was that the “poor bastards” at Pandora are also scratching their heads at what comes in the door and how unsuccessful they are at monetizing the service they provide . . and they are doing it “for a business” . . . the question is for how long?
Companies like Pandora and Slacker are shifting their business models to get people as paying subscribers. It is subtle, but it is happening.
With Slacker you are limited on “skips” unless you are paying. You are limited on lyrics unless you are paying.
These subscribers are getting monetized, but most passionate satellite radio fans that visit sites such as this don’t follow these other companies closely enough to see the changes.
Essentially it is a far better service when you pay a modest sum. Consumers are seeing this. $60 bucks a year to avoid commercials and get added benefits is cheap.
The issue is actually not how much money these companies make. It is that they exist now and will continue to exist in the future.
Pandora survived their toughest time and now makes a profit. They are here to stay regardless of how much money they make per user.
The point is Sirius XM will need to contend with these types of services regardless of who has a better business model
Ah, ah, ah, “Bull-sheet”. And I’ve got beach front property cheap down here in the Everglades.
I should add one little codicil here . . the cool stuff is free . . . once I pay the monthly fee for high-speed IP connection that is . . . sorta like streaming free mobile internet music without the annoying commercials . .
Test….
check-check
roger that; over
There use to be the thought “who cares about the pipeline, what matters is the content.” Although, I think I do remember seeing Mel on Charlie Rose saying his biggest concern/threat was Google. So Spencer does the pipeline matter? All this makes the curiosity about 2.0 that much stronger.
The pipeline does matter.
Look at Sirius XM’s exclusive content today, and how much of that exclusive content has apps on smart phones. The issues are blurring quickly.
Yea, thats my concern. If everything that sirius/xm offers can be found on an app. or supplied on the internet why does any of the exclusive content stay with sirius/xm?
Spencer,
I believe you are preaching to the choir. It would be unwise to disagree with the fact that siri needs to be ubiquitous. It would be just unwise to claim that they are not interested in getting on mobile or do not know how to. A lot of applications are already there. Let us separate mobile into two categories -in the car and elsewhere. I firmly beleieve that mobile in the car is a joke and is as bad or even worse than terrestrial radio. As to mobile elsewhere, I am sure siri is trying but may be not hard enough. When they signed HS about six years ago, mobile access was in its infancy, and they definitely missed this opportunity in their contract. However, it is absolutely obvious that this time they will not miss not only with HS but with anyone else. I also believe that pandoras/slackers’ users are most likely quite different demographic most of whom simply do not want to pay as much as siri charges. At the same time, I am also sure that there is a significant part of that group who may end up paying and siri needs to capture them. This is why your point is 100% valid, and siri should triple their effort in attracting these new folks. Everyhting helps. This move would help siri grow even further but nothing close to their gains in new or used autos. Once the market picks up times growth of siri brand strength and their mobile push, their mobile numbers will grow accordingly.
I still believe that the business of pandoras’ is marginal and they will have a hard time surviving on their own. All these 60M registered users is a fluff for buyers in their sales pitch. These numbers look great in their presentation pitches that they probably make every other week to potential buyers. The true question is how much money they are making!!! Close to nothing. We have been there and we have seen that. It does not seem that their business model can work even at such seemingly large numbers. Siri will put them away without even trying via natural growth and strong siri brand.
Hey Spencer. I understand your concern about competition in this market, BUT it does sometimes come across sounding like you think that SiriusXm will lose the battle to these other services. I don’t think you actually believe this, but it does come across that way on occasion. The audio entertainment sector is huge. There is room for a number of players. The competition should make all of these services better, including satrad. If someone is sick of advertising, and they decide to pay for a service, I don’t think it is much of a stretch to get them to pay a little more for satrad each month than they would for slacker or pandora, especially if their car is already equipped with a satrad receiver. Personally, I prefer to use my phone as a phone when I’m driving. Just like in any market there will be different levels of service at different price points. Even in this economy, not everyone is poor. A lot of people will choose to pay up as long as siriusxm remains a premium service.
Concern about the competition? How about the fact that the stock is still under $5.00 a share for how long now despite any and all progress. Has that dawned on anyone? If you haven’t realized something screwy is going on with this equity you don’t have a brain in that hollow gourd that sits on your shoulders.
Sure are some stupid people involved with this thing. Half are crooks and the other half doesn’t have enough brains to shelter in the shade of a snow pea. You don’t have to be a genius just go back the last 7 or quarters and that will tell you everything you need to know why you shouldn’t be in this stock. It’s corrupt and contaminated.
Well, being stupid has been pretty profitable for a lot of us. I’m up 8 fold in a little over a year.
What, have you been naked short selling siri. You’re probably part of the problem.