Here’s another email I got last week during the Blanidn Broadband conference… (Gotta love a snowy Sunday for catching up!)
A recent report says that Google is by far the largest user of Internet bandwidth, Google’s share of bandwidth usage is rising rapidly, and that Google’s bandwidth use is orders of magnitude greater than its payment for its cost.
Specifically, the study estimated Google used 16.5% of all U.S. consumer Internet traffic in 2008; that share is estimated to grow to 25% in 2009 and 37% in 2010. Then the study estimated Google’s payment to fund just the U.S. consumer broadband Internet segment to be approximately $344 million in 2008 or 0.8% of U.S. consumer’s flat-rate monthly Internet access costs of $44.0 billion. Thus Google’s 16.5% share of all 2008 U.S. consumer bandwidth usage, is ~21 times greater than Google’s 0.8% share of U.S. consumer bandwidth costs – or an implicit ~$6.9 billion subsidy of Google by U.S. consumers.
The go on to talk about how Google hogs the traffic – mostly through search bots. Part of me says – well that’s like Orlando blaming Disneyworld for the road traffic. Part of me realizes that Disneyworld probably pays some hefty local taxes, whereas Google doesn’t.
The researchers obviously had some of this in mind as well. Here’s a quick blurb from the report:
This research study of Google’s usage vs. cost is relevant to the current broadband policy debate, because
Google is the driving force behind InternetForEveryone.org which is pushing “to adopt a national plan to bring open, high-speed Internet connections into every home, at a price all of us can afford.” Internet connections could be more affordable for everyone, if Google paid its fair share of the Internet’s cost. It is ironic that Google, the largest user of Internet capacity pays the least relatively to fund the Internet’s cost; it is even more ironic that the company poised to profit more than any other from more broadband deployment, expects the American taxpayer to pick up its skyrocketing bandwidth tab.
It’s an interesting counterpoint to the Net Neutrality folks. I think that the researchers might have benefited from a little neutrality in their tone – but it’s a good read.
I don’t see how this is meaningful at all. Sure, google barely pays for any Internet bandwidth but they operate their own private fiber network (which they do pay for). They also don’t use millions of expensive last-mile loops compared to consumers.
Why don’t you look at how much the top Internet backbones “pay” for bandwidth such as Level 3 and ATT. (hint: the answer is they don’t pay anything for bandwidth but they do pay for thousands of miles of fiber and maintenace).
Mark,
I can see your point – in that way it is like my comparison to Disneyworld in Orlando. They have their own roads too – but at some point visitors are using regular roads. I think that Disneyworld and Google are both major draws for the area (Orlando or the Internet); to blame them for traffic can be counterproductive.
I have mixed feelings on who pays for broadband. I think Google has been much more innovative in making a buck online – the online ads are just one example and I work with plenty of people who spend some good money there. (And it’s good value.)
The traditional providers have not been so clever. (Well maybe the big guys have been cleverer than the small guys if they aren’t paying for fiber.) Until they get clever I think they’re going to ask the consumers or the big content providers (such as Google) to pay. Or maybe the fiber and maintenance will become a utility-type product.
So whether this is meaningful or not – it’s an issue someone is going to try to push.
Why didn’t you include a link to Google’s response to this “research”? Scott Cleland is 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 take his commentary with a heavy dose of salt.
See http://googlepublicpolicy.blogspot.com/2008/12/response-to-phone-companies-google.html
Kevin,
Thanks a million for providing the link to the Google response for me!
I think the folks at Google do a good job of refuting the study on three points. First by pointing out that consumer choose to go to Google (kind of that Disneyworld theory). And second by pointing out that they do pay for servers and for the bandwidth from their servers to the backbone. Finally, the report is trying to make an apples-to-apples comparison to Google and other sites and Google is an orange. They aren’t necessarily trying to create a sticky site – they are trying to find away to connect users from one site to another.