Google slammed for bandwidth free-ride

An analyst with lobbying ties to the telecom industry yesterday released a report claiming Google is consuming 21 times the bandwidth that it is paying for, essentially free-loading its successful business model on the back of bandwidth providers.

The report, authored by Scott Cleland of consulting firm Precursor and founder of NetCompetitition.org, a group opposed to net neutrality legislation, claimed that Google today “uses” 16.5% of consumer Internet capacity, rising to 37% in 2010. In turn, its payments for that bandwidth total just 0.8% of US consumers' flat-rate monthly Internet access costs, essentially resulting in consumers subsidizing its bandwidth usage. He called the fact that Google benefits so greatly from the shared aspects of the Internet “the elephant in the room” of the broadband policy debate.

Google was quick to respond, with company general counsel Richard Whitt on the company’s policy blog calling Cleland a telco-paid “full-time Google critic” whose criticism of the company “most people here in Washington take…with a heavy dose of salt.” Whitt also highly questioned Cleland’s math, claiming that “in his zeal to score points in the net neutrality debate, he made significant methodological and factual errors that undermine his report's conclusions.”

The back-and-forth looks to be a clear escalation – on both sides – of the net neutrality debate. All consumer advocacy aside, both sides have significant business issues at stake: Google wants users to have more unfettered access to broadband, bolstering its ad-driven business model of “organizing the world’s information.” Network operators – not to mention other industries like movies, music and books – want Google to share the wealth they’ve gained organizing that same information with the help of competitor’s resources, whether they be content or bandwidth.

In an interview, Cleland claimed that Google consumes “by far the most usage [of the Internet] and by far the most benefit. At the same time, they’ve been by far the most aggressive in promoting public policies [like net neutrality] that would further benefit Google.”

Cleland attacked Google for being “the least transparent company out there” when reporting its bandwidth consumption. He came to his numbers, he said, by estimating the bandwidth costs it would require to run Google’s search engine and data centers, along with the costs that content delivery networks like Akamai run up to deliver content such as Google’s YouTube video delivery service.

Google’s Whitt criticized that approach strongly, most generally by contending that Cleland “confuses ‘market share’ with ‘traffic share.’”

“There's a huge difference between your own home broadband connection and the Internet as a whole,” Whitt wrote. “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.”

Specific numbers aside, Cleland said his report was a first effort to bring a usage versus cost analyst to broadband policy debates, specifically trying to assess whether or not Google pays its fair share of the Internet’s costs.

“Google’s business model is purposeful in arbitraging this shared resource,” Cleland said. “Everything Google does is about scaling, and they set out purposely to use as much of the Internet as possible knowing that could shift the real costs off of them.”