[tt] Slate: Tim Wu: Yes, Google is trying to take over the world.

[Premise Checker]

Tim Wu: Yes, Google is trying to take over the world.
http://www.slate.com/id/2178158/nav/ais/
[Linked by Arts & Letters Daily.]
7.11.16

When Google conquered Internet search in the early 2000s, it was
strictly a Web company and faced only Web competitors. Since then
it has only rarely ventured out of the friendly confines of the Web
world. The 2005 launch of its controversial "book search," which
enraged the New York publishing industry, shows what can happen
when Google leaves its comfort zone. Now, with its recently
announced plans to enter wireless communications, Google is making
its deepest foray yet into a foreign territory where its allies are
few. It faces the challenge of not just entering the wireless world
but also converting its inhabitants. Provided that Google has the
nerve and resources to try to remake wireless in its image, it'll
either prove its greatest triumph or its Waterloo.

Let's start with what, exactly, Google is doing. In Google's words,
its recently unveiled "Android" is the "first truly open and
comprehensive platform for mobile devices." But it is a signal of
much more. Google is as much an ideology as a firm and can resemble
a nation-state in its pursuit of power rather than a mere
corporation chasing quarterly numbers. Google and its allies are
now trying to make the principles of openness--the commanding
ideology of the Internet--the conquering principle of the wireless
world, and the Android announcement is just the first step.

Android is, in form, another of Google's giveaway strategies, a
Linux-based operating system for mobile phones that comes with a
free set of tools that should make it easy for any programmer to
write applications for a mobile phone. It's clear that any
Android-based Gphone will be far more "open" than any cell phone
the world has yet seen. That means any developer, anywhere, will be
able to build whatever functions they think make sense for a mobile
computer, and users will be able to install whatever they want. In
comparison, today's cell phones, smartphones, and the Apple iPhone
are closed and controlled platforms. We have no idea what the
killer apps for a Gphone might be, and that's what makes Android
truly revolutionary.

Who, if anyone, is threatened by Android? Since it is an operating
system and Microsoft makes operating systems, some journalists have
written about Microsoft as the company that Google is challenging.
That's a mistake. Yes, Google's Android will supplement and may
someday displace Microsoft or Symbian (another leading mobile OS).
But neither Microsoft nor Symbian is the true obstacles to Google's
larger plans. They are rivals, yes, but neither Symbian nor
Microsoft can stop Android or the development of Gphones.

Google's truest and most formidable foes are much older and more
powerful. Today we call them Verizon and AT&T, but their real name
is the Bell system. Their ideology, which today governs the cell
phone world, is called "Vailism," and it can be traced back to 1907
and the origins of AT&T's domination of American telephony. The
Bells' philosophy, as promulgated by AT&T's greatest president,
Theodore Vail, is based on closed systems, centralized power, and
as much control as possible over every part of the network. Vailism
is the antithesis, in short, of everything Google stands for. It is
this--conquering the business culture of the telephone, as opposed
to the computer--that is Google's great challenge.

If that sounds abstract, we can make it more concrete. Over the
coming years we can expect the Bell system to do everything in its
power to destroy or subjugate Google. That's what history suggests;
for since 1894 or so, the Bell system has swallowed or eliminated
almost all of its would-be rivals. As one historian writes, in the
early 1900s Bell would bankrupt competitors, and then "in truly
medieval fashion, pile the instruments in the street and burn them,
as a horrible example for the future."

As that suggests, bad things tend to happen to firms that challenge
Bell. While actual burning of equipment is rarer these days, the
Bells do still run the industry, in part, through terror. Almost
every firm in the wireless world is, somehow, connected to AT&T or
Verizon, and to defy them or even speak out is to risk retaliation.
That's why Google's venture might be compared to trying to start a
new waste management firm on Tony Soprano's street.

Tim Wu is a professor at Columbia Law School and co-author of Who
Controls the Internet?
   ______________________________________________________________

Remarks from the Fray:

Corporations are not like people, with hard-wired personality
characteristics. Verizon and AT&T are protean economic creatures,
and over the long run they will act to serve their shareholders'
interests. Come to think of it, so will Google.

Is such corporate self-interest a good thing or a bad thing? The
premise of our economic system is that it's usually, though not
always, a good thing. Antitrust law does a pretty good job of
identifying the narrow circumstances in which unbridled market
forces disserve consumer interests. But one will search in vain
through the Wu corpus for an economically rigorous analysis of what
antitrust theory says about his "openness" rhetoric, This article
is no exception.

As for "control over spectrum," AT&T and Verizon have most (not
all) of their spectrum because they paid billions for it at
auction. The same for Sprint and T-Mobile. Google can do it too, in
the new spectrum auction the FCC has planned for next year.

As for "control over retail," sure, the telcos have lots of
customers, but Google has tens of millions more than either AT&T or
Verizon, because it completely dominates the national search
market, with a market share of 70-90%.

Finally, as for "control over government," Google is the darling of
the Democratic high-tech intelligentsia, which will be running
regulatory policy in fifteen months. (Where did Barack Obama give
his recent speech extolling the substance of Google's regulatory
policy? At Google headquarters. Clinton visited a few months ago.)
But Google needn't actually wait for a formal change of
administration, because its side has formidable political clout
already.

What Google should fear most is a government that is
temperamentally quick to impose new "neutrality" or "openness"
obligations on large companies. Do you like the idea of "net
neutrality?" You'll love "search neutrality." After all, Google,
with its $200 billion market cap, controls the search market, and
its proprietary algorithms ultimately pick the winners and losers
on the Internet. Want to know how those algorithms work, and which
websites they favor or disfavor? Want to create an FCC or FTC
regulatory staff with responsibility for ensuring that Google
treats Web participants openly and fairly? Follow the "neutrality"
and "openness" rhetoric where it logically leads.

--sceptic

(To reply, click here.)

We should hope they are successful. The incumbent phone companies
have no interest in satisfied customers. Wireless voice quality is
horrible. Internet connection speeds are pitiful. Prices for
service are outrageous. they tap your conversations , email, and
web surfing, and provide that information to the government, no
questions asked. What other utility in the U.S. requires a 2-yr
contract, besides wireless phone service (even if you don't buy a
subsidized phone, they still want a 1-yr contract for some
services)?

Most wireless phone calls are made inside a building (well,
probably more than half, if not 75% of them). A lot of those
buildings have wi-fi in them. If google specs out a phone that can
make VoIP phone calls, it can offer a wi-fi based phone service.
They have lots of fiber bandwidth, they know how to use computers,
and they have lots of capital. Plus, they are infinitely smarter
than the phone companies. The only disadvantage they have is that
they don't seem to be as willing to bribe congressmen yet. While a
wi-fi based service won't be enough to take over the wireless phone
business, it will put a dent in the carrier's revenue. And given
how little they understand technology, it will be a while before
they realize it, and will then have to make a deal for access to
their network. Since t-mobile is already offering free phone calls
over wifi (if you have their standard wireless service), this may
not be such a stretch.

--kgsbca