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Verizon Razzes Google

11:00 AM -- Verizon Communications Inc. (NYSE: VZ) has launched a verbal assault on Google (Nasdaq: GOOG)'s "free lunch," according to the Washington Post.

"The network builders are spending a fortune constructing and maintaining the networks that Google intends to ride on with nothing but cheap servers," John Thorne, a Verizon senior vice president and deputy general counsel, is quoted as saying.

"It is enjoying a free lunch that should, by any rational account, be the lunch of the facilities providers," said Thorne, speaking at a conference marking the 10th anniversary of the Telecommunications Act of 1996.

Party on!

— R. Scott Raynovich, Editor in Chief, Light Reading

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rjmcmahon 12/5/2012 | 4:07:05 AM
re: Verizon Razzes Google Some may see the free lunch that Google and Google users are benefiting from as all the content they crawl and index.
optodoofus 12/5/2012 | 4:07:05 AM
re: Verizon Razzes Google How exactly does Mr. Thorn figure that the lunch should belong to the facilities providers. The lunch could be theirs - if they were willing and able to develop a world class search engine and market it aggressively. Instead, they add no value to the pipe but want to share in the reward. Verizon is paid for their network by the DSL subscribers. That is all they are entitled to. That's all they're going to get.

optodoofus
rjmcmahon 12/5/2012 | 4:07:04 AM
re: Verizon Razzes Google I think they're posturing because neither side really has anything. VZ doesn't have an infrastructure which supports video and google doesn't have the rights to video content which would support the construction of a new video infrastructure. If VZ wants compensation for network upgrades they should be talking to the media companies. The media companies would tell them to take a hike because the cable and satellite providers are doing the job nicely. Hence they go after google/yahoo and hope to get a cut of some of their Wall St. "growth" valuations. Surprised they don't go after etrade, ebay, etc. and claim a cut of those transactions.
Scott Raynovich 12/5/2012 | 4:07:04 AM
re: Verizon Razzes Google at some point it seems like they are going to have to negotiate a deal. They've both got to get over their posturing, no?
rjmcmahon 12/5/2012 | 4:07:04 AM
re: Verizon Razzes Google Another thing, is VZ acting any different than a TV affilliate? I believe a TV affilliate is compensated by the broadcast networks to carry their programming (and ads.)
laser_lover 12/5/2012 | 4:07:03 AM
re: Verizon Razzes Google Yes, Google should face up to the fact that they're the parasites here.

They should repent, and try to make it up to Verizon.

They could do this by randomly blocking access from Verizon IP addresses, and provide a helpful pointer to Verizon technical support phone numbers so that Verizon can explain how this is good for their customers.

Perhaps IP addresses from Verizon headquarters should be blocked completely.

That will teach those upstart content providers who is boss!

LL

rjmcmahon 12/5/2012 | 4:07:02 AM
re: Verizon Razzes Google The media companies supplied the content at a price in which the cable companies could afford and profit sufficiently such that they could pay for their network build outs. So maybe the media companies didn't provide direct compensation, but they did provide something of value in which the cable companies could sell to their customers. The end product to the customer was the video content supplied by media companies.

Google doesn't have broadcasting rights to any video content worth mentioning. They are unlikely to be a supplier for a new video infrastucture. That's my point.
alchemy 12/5/2012 | 4:07:02 AM
re: Verizon Razzes Google rjmcmahon writes:
If VZ wants compensation for network upgrades they should be talking to the media companies.

You have this exactly backwards. Cable operators pay huge dollars to media companies. They then resell the content to their subscribers. The cable operators spent billions building out their networks to distribute that content and didn't get a dime from the content providers. Even worse, they have to completely rebuild their network every 5 or 6 years so the cable industry has been roughly as profitable as the airline industry because of all the rebuilding costs. If a Google can piggyback on the MSO data network for free selling streaming video services and undercut the cable operators, the cable operators go out of business and you have no network.

Certainly Verizon isn't going to continue building out their FIOS network if Congress starts passing laws that parasitic video from Google has to be treated equally with any video product Verizon rolls out.
optiplayer 12/5/2012 | 4:06:59 AM
re: Verizon Razzes Google "they add no value to the pipe but want to share in the reward."

That may have been true when all we were talking about was best effort Internet traffic but what the LECs would argue now is that for services that require more than best effort to maintain quality, like video or VoIP, they can and will add value and expect to be paid for it. If the content providers won't pay then they can run their video as best effort while the LECs run their's with higher priority and let the consumers decide which is better.
telco1158 12/5/2012 | 4:06:59 AM
re: Verizon Razzes Google Much of the posturing at this point is being done by media companies who appear to bait the fight. Goog seems content to have things as they are, firing back just enough to not look stupid or passive. Best effort, lack of QoS or not, the current WWW suits Goog and their business model just fine for now. They could also be lying low because they have a hidden Ace up their sleeve which may make the media companies' arguments mootGǪ rumors have it they are building their own high speed network to bypass the current Tier 1 providers. Go ahead, charge Goog all you want. They will simply play in their own high speed sandbox. That is, if you believe rumors. :)
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