Yesterday, Bloomberg reported that Verizon and Google have made a deal on network neutrality policy they'd like to see in America. That deal (surprise!) is Google can get special privileges on Verizon's network. The Huffington Post splash page mocks Google's slogan: "Don't Be Evil" with an asterisk. Asterisk: "unless it's profitable." Josh Silver called it the end of the Internet as we know it.
I want to explain why I think this deal matters, and why it doesn't. And it might not be for the reasons you think.
The Deal
Net neutrality is simply a proposed rule forbidding Verizon, AT&T, Comcast and other ISPs from engaging in special deals to block or favor certain content on the Internet; it's to keep the Internet an open general purpose network equally accessed by all innovators, speakers, and businesses. Like it is today. The carriers want to turn it into a controlled medium.
Among other things, according to the New York Times, the deal essentially says that Verizon will be able to cut special deals with any company--like, um, one called Google--to prioritize that company's traffic, giving that company an advantage online over any other content online. Google decided it could make more money getting special--or even exclusive--treatment on the Verizon network because few of their competitors could afford to get the same treatment.
(Note: Google is denying the Times report through a Tweet. I'll spell out the implications assuming the Times is right.)
Business Examples
So, as a business matter, let's say you use a Verizon mobile wireless card (an EVDO card) for your laptop (in addition to having a a Verizon mobile computer).
Google's products can get priority on your laptop based on commercial deals.
Google's Youtube may get Verizon-special treatment denied any competing video site, from Blip.tv to Netflix. (This is the example given by the New York Times today.)
Google's Orkut, a social network once known only for being big in Brazil, gets better treatment than Facebook.
Google's Blogger--a blogging technology--gets the Verizon-special preference denied WordPress.
Google's Chrome browser happens to work a lot better than Internet Explorer and Mozilla Firefox.
Google's GChat video gets special treatment compared to video phone services like Video Skype.
Google's Gmail, an email service, gets better treatment than Hotmail or Yahoo!
Google Books gets special treatment denied any competitors.
Google's domain name service gets preferred treatment denied competitors like OpenDNS, which could even be blocked under the deal.
Google's advertising network can get Verizon network priorities.
Google's Froogle site gets special treatment denied everything from Groupon to Ebay to all those random "deal of the day" sites.
Google Voice could get special treatment compared with those other online phone services.
Google's Picasa could get special treatment over Flikr, for photo albums.
Google's Buzz could somehow get special treatment over Twitter.
Even Google Wave could get priority... Really.
So, as a business matter, the deal is important. And, yes, it may be the end of the Internet as we know it, if the FCC blessed such deals. The deal yesterday announces that Verizon and Google open the door to all of this.