Google - a Public Utility?! - Tilted Forum Project Discussion Community

seretogis · 11-14-2003, 02:13 PM

Quote:

Google as a Public Utility? No Results in This Search for Monopoly
Issue #65
November 14, 2003

by Adam Thierer and Clyde Wayne Crews Jr.

The Google search engine is one of the Net’s great success stories, with one analyst projecting possible revenues of $800 million and profits of $200 million this year. Just a few short years ago no one had even heard of this company. But today Google represents a classic example of the little guy going up against the Goliaths of the industry—Yahoo!, Lycos, AltaVista—and winning, and now there’s talk of a possible $15-$25 billion IPO. But companies, ideas, and fortunes rise and fall in the blink of the eye in the digital economy. Remember Disney/Infoseek’s “GO” network and the “portal wars”? GO’s portal is now “powered by Google.” Today Google may be king of the hill, yet it’s just as easy to imagine a world without it.

But jealous rivals and would-be reformers aren’t always patient. So a Google backlash was almost inevitable. One scheme gaining some traction would classify Google as a “public utility” and regulate it accordingly. In the high-tech sector and network industries, the “open access” mentality is increasingly prevalent. Competitors want government, via regulatory mandate, to guarantee them access to a rival’s property, whether it's the Windows desktop, AOL’s Instant Messenger service, the telephone loop, the electricity grid, satellite TV, or so on. One coalition even wants to pre-regulate broadband Internet service providers on the theory that they might interfere with access to certain websites.

Google’s rise is occurring against this unfavorable backdrop. When one thinks of a public utility or a “natural monopoly,” local water and sewer systems come to mind—not Internet search tools. But consider this flash of economic wisdom regarding Google from technology consultant Bill Thompson in a recent online BBC News column: “Perhaps the time has come to recognize this dominant search engine for what it is—a public utility that must be regulated in the public interest.” Thompson adds, “A government serious about ensuring that the net benefits society as a whole could start by investigating Google and considering whether we should create Ofsearch, the Office of Search Engines.” Daniel Brandt of Google Watch / Public Information Research, Inc., has similar dire predictions. “It's way too powerful…It’s scary because if Google drops you, you could be out of business in no time.”

It’s difficult to address such proposals with a straight face, but we’ll give it a shot. Proposals to turn Google into a public utility assume that it is a “natural monopoly” or an “essential facility” that acts as a bottleneck to consumer choice and competition. Those amorphous concepts have been used to justify an array of regulatory shenanigans. Regardless, Google doesn’t meet even the textbook definition of a natural monopoly. Switching by consumers is easy, and Google has no government protection from rivals. In fact, as CNN recently reported, “Yahoo has committed nearly $2 billion to its Google counterattack [and] Microsoft is devoting an unspecified portion of its $49 billion war chest to building a better search engine.” Even using Google itself to search for other search engines, one finds hundreds of global options. For example, typing the phrase “search engines” on the Google homepage yields the “Search Engine Colossus,” basically, as the name implies, a search engine of search engines, with listings for almost every country on the planet. Over 100 search engines are listed for the United States. For the United Kingdom there are over 50. From Afghanistan to Zimbabwe, the Search Engine Colossus “offers you links to search engines and directories from 195 countries and 43 autonomous territories around the world.” So what’s the problem here again? With so many competitors in the market, Google cannot be regarded as having monopolistic market power.

The idea of an essential facility, even a low-barrier one made of software, unfortunately has no patience for the evolutionary nature of a market and information economy. P.H. Longstaff, author of The Communications Toolkit, has commented that, “Discussions of essential facilities often ignore the existence of alternative channels in which the traffic in question could flow.” To micromanage technology policy under the assumption that no other channels will emerge would be terribly short sighted, with unintended consequences galore.

In fact, treating Google as a public utility may have the perverse effect of locking in Google’s own current generation of search engine technology. That would be a huge mistake. Business 2.0 notes that search technology is “still in its infancy as a computer science problem,” given that half or more search queries are unsatisfactorily answered by any search engine. The magazine quoted one executive who argues that “No one is successfully doing [search] today.” The Wall Street Journal notes, “Some search industry gurus even preach heresy: that Google isn’t the field’s technology leader anymore.” Google’s PageRank system, which ranks sites on the basis of websites that link to it, is merely one imperfect approach, and may be superceded by others like Teoma, or perhaps even the open source project called Nutch.

Clearly those who blithely advocate public utility–style regulation of Google see only benefits and no costs. The purported benefits of public utility regulation is that it brings down the cost of what many consider an essential good and helps ensure that deployment to most members of a given community. But public utility regulation typically results in mediocre service quality and limited innovation. Do we really want Google to become just another lazy public utility providing basic, plain vanilla service? We should aspire for more in the Internet world, especially with relatively low barriers to entry in the search engine market. Public utility regulation rarely delivers the goods faster than markets, and in this case, the universal service rationale behind regulation has been satisfied by a vigorously competitive marketplace. If Google abuses its market position, web surfers will quickly flee. But it’s hard to make a case for abuse when the service in question is free to the public and millions have voluntarily flocked to it over its many rivals.

Of course, if the public utility crusade dies the death it deserves, other regulatory agendas await. The Google Watch web page catalogs grievances against the search engine and calls for government regulation on the grounds that it is “a privacy disaster waiting to happen.” Others warn that Google's “cache” raises intellectual property concerns. So stay tuned.

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Adam Thierer (athierer@cato.org) is Director of Telecommunications Studies and and Wayne Crews (wcrews@cato.org) is the Director of Technology Policy at the Cato Institute in Washington, D.C. (www.cato.org/tech) They are the authors of What's Yours Is Mine: Open Access and the Rise of Infrastructure Socialism. To subscribe, or see a list of all previous TechKnowledge articles, visit http://www.cato.org/tech/tk-index.html.

This caught me a bit by surprise, and so I don't really have much to say about it other than I am stunned that some are so utterly dependant on the government as to suggest a "Department of Search Engines".

Silvy · 11-14-2003, 04:08 PM

People don't want Google (or any other popular service) to be able to [silently] direct the public.

Like the article says: If google drops you from their results you're in serious trouble (if your business depends on random visits)

I don't see it as a public utility though, as there are more search engines out there.
The danger lies in silent manipulation of the site's visitors, that's one thing people should look out for. (Google does to a certain degree 'decide' where webtraffic is headed.)
But if Google dropped from the 'Net (let's hope not, they're doing a decent job) people would quickly switch, no society threatening catastrophies there...

So a possible manipulation tool? yeah... possibility of abuse by google's staff? yeah... But the same goes for Microsoft, newspapers and television.

Peetster · 11-14-2003, 04:17 PM

This is a fascinating argument. I can see both sides. I would be almost inclined to agree with the "public utility" concept, except it serves a world's, not a country's economy. Who would have jurisdiction over that?

smooth · 11-14-2003, 04:30 PM

I went to nutch's site and read their description. I like the point the developers made regarding how their open system wouldn't include bias--or, at least, the biases would be publicly available.

To me, this isn't a case of government dependency. Although, I don't quite understand why that is even used in a negative fashion. The idea of government, to me, is that it should be responsive to and protective of the people's needs.

So dependency seems like an odd notion to disparage. We should be able to use collective, political action to effect change or regulate those who refuse to regulate themselves (not that Google isn't doing that already; rather, if the operators decide not to).

seretogis · 11-14-2003, 07:58 PM

Quote:

Originally posted by smooth
I went to nutch's site and read their description. I like the point the developers made regarding how their open system wouldn't include bias--or, at least, the biases would be publicly available.

To me, this isn't a case of government dependency. Although, I don't quite understand why that is even used in a negative fashion. The idea of government, to me, is that it should be responsive to and protective of the people's needs.

So dependency seems like an odd notion to disparage. We should be able to use collective, political action to effect change or regulate those who refuse to regulate themselves (not that Google isn't doing that already; rather, if the operators decide not to).

Eh, the fact of the matter is that google is in no way forced upon the masses. It does not meet the criteria to define it as a "natural monopoly" as are public utilities (gas, water, electricity). If you don't like google, you can simply type in another url. You can't do that with the gas/electric/water/sewage/etc utilities. The article implies that google's competitors are making this push, which suggests to me that they are so inept that they are relying on the government to knock google down so that they can steal whatever proprietary technology they own.

ARTelevision · 11-18-2003, 06:58 PM

What is really interesting to me is how technology creates new connectivities that never existed before and how our conceptions of economic and macro-economic principles adapts. I'm with Peetster, both views are fascinating and compelling.

Kurant · 11-20-2003, 07:58 PM

A monopoly of search engines, you've got to be joking.

A public utility? Doubtful. However, the internet as a whole, is, granted, there is money to be made, but it's the greatest source of information on the planet. Google, isn't, it's just a search engine, the gateway to access that information. There is 100's of other ones out there. I find it said that people with sub-par products, have to find a way to get the goverment involved to get they're piece of the pie - legally.

If you open a restaruant, and ten others open across the street from you. If your food sucks, you go out of business. Why should consumers be forced to eat sub-par food, or use sub-par search engines?

Silvy · 11-21-2003, 03:02 AM

Quote:

Originally posted by Kurant
If you open a restaruant, and ten others open across the street from you. If your food sucks, you go out of business. Why should consumers be forced to eat sub-par food, or use sub-par search engines?

The problem is not the diversity of the offerings (I agree, there are plenty of search engines), it's just that many people seem to rely on Google.

If a restaurant serves you bad food, you go look for an alternative. If Google returns only half the resources that it could return to your query, how would you know?

If you searched for 'animated movie', and Google decided to like the Disney corporation, then it could return Disney (and relating pages) as the first links to any such query. And move Pixar, Dreamworks and the like to say the tenth page.
Joe, the average user, would not know, would not care and therefore be 'led' to Disney, severely affecting the economic situation of the affected companies.

** Note, I am exagerating here, and I'd hate to see regulation. But I'm all for competition that Joe can see.
Most people know only google, and like Altavista at their time, Google can abuse that. I just hope that Google keeps their QoS as they seem to be doing...

** Another note: I agree with lordjeebus below...

lordjeebus · 11-21-2003, 03:43 AM

I think that the "public utility" designation exists for services that serve most people and cannot establish essential infrastructure without public support/approval. A power company needs a place to puts its lines, as does a phone company. The water company needs a place to lay its pipes. In order to establish a power grid, the government gives a company the right to set up power poles everywhere. This is a good thing because it would be pointless, wasteful, expensive, and inefficient to have competing networks of power grids, sewer systems, etc. In exchange for its service, the government grants a utility the power to access public land, airspace, etc. It is all right for government to demand that other companies be allowed to use present infrastructure b/c it should not be expected to make concessions for the building of parallel infrastructure that provides no net benefit.

Google is different. It does not need anything beyond what any other normal corporation needs. It does not receive special access from the government to conduct its business. The public did not grant Google access to its land, its air, or any other shared property. Also, unlike utilities, there would be plenty of benefit from the existence of many competing search engine systems. Google is successful because of its own innovation, not because of government-bestowed power. Any other company is free and encouraged to create its own search technology and apply it however it wants. Google is not a utility, and to regulate it as such is an abuse of the law.

Kurant · 11-21-2003, 06:20 AM

^^

Hero.

11-14-2003, 04:08 PM	#2 (permalink)
Silvy paranoid Location: The Netherlands	People don't want Google (or any other popular service) to be able to [silently] direct the public. Like the article says: If google drops you from their results you're in serious trouble (if your business depends on random visits) I don't see it as a public utility though, as there are more search engines out there. The danger lies in silent manipulation of the site's visitors, that's one thing people should look out for. (Google does to a certain degree 'decide' where webtraffic is headed.) But if Google dropped from the 'Net (let's hope not, they're doing a decent job) people would quickly switch, no society threatening catastrophies there... So a possible manipulation tool? yeah... possibility of abuse by google's staff? yeah... But the same goes for Microsoft, newspapers and television. __________________ "Do not kill. Do not rape. Do not steal. These are principles which every man of every faith can embrace. " - Murphy MacManus (Boondock Saints)

11-14-2003, 04:30 PM	#4 (permalink)
smooth Junkie Location: Right here	I went to nutch's site and read their description. I like the point the developers made regarding how their open system wouldn't include bias--or, at least, the biases would be publicly available. To me, this isn't a case of government dependency. Although, I don't quite understand why that is even used in a negative fashion. The idea of government, to me, is that it should be responsive to and protective of the people's needs. So dependency seems like an odd notion to disparage. We should be able to use collective, political action to effect change or regulate those who refuse to regulate themselves (not that Google isn't doing that already; rather, if the operators decide not to). __________________ "The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann "You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman

11-18-2003, 06:58 PM	#6 (permalink)
ARTelevision I change Location: USA	What is really interesting to me is how technology creates new connectivities that never existed before and how our conceptions of economic and macro-economic principles adapts. I'm with Peetster, both views are fascinating and compelling. __________________ create evolution

11-20-2003, 07:58 PM	#7 (permalink)
Kurant Junkie Location: Don't worry about it.	A monopoly of search engines, you've got to be joking. A public utility? Doubtful. However, the internet as a whole, is, granted, there is money to be made, but it's the greatest source of information on the planet. Google, isn't, it's just a search engine, the gateway to access that information. There is 100's of other ones out there. I find it said that people with sub-par products, have to find a way to get the goverment involved to get they're piece of the pie - legally. If you open a restaruant, and ten others open across the street from you. If your food sucks, you go out of business. Why should consumers be forced to eat sub-par food, or use sub-par search engines? Last edited by Kurant; 11-20-2003 at 08:01 PM..

11-14-2003, 04:17 PM	#3 (permalink)
Peetster Right Now Location: Home	This is a fascinating argument. I can see both sides. I would be almost inclined to agree with the "public utility" concept, except it serves a world's, not a country's economy. Who would have jurisdiction over that?

11-21-2003, 03:43 AM	#9 (permalink)
lordjeebus ‚±‚Ìˆó˜U‚ª–Ú‚É“ü‚ç‚Ê‚© Location: College	I think that the "public utility" designation exists for services that serve most people and cannot establish essential infrastructure without public support/approval. A power company needs a place to puts its lines, as does a phone company. The water company needs a place to lay its pipes. In order to establish a power grid, the government gives a company the right to set up power poles everywhere. This is a good thing because it would be pointless, wasteful, expensive, and inefficient to have competing networks of power grids, sewer systems, etc. In exchange for its service, the government grants a utility the power to access public land, airspace, etc. It is all right for government to demand that other companies be allowed to use present infrastructure b/c it should not be expected to make concessions for the building of parallel infrastructure that provides no net benefit. Google is different. It does not need anything beyond what any other normal corporation needs. It does not receive special access from the government to conduct its business. The public did not grant Google access to its land, its air, or any other shared property. Also, unlike utilities, there would be plenty of benefit from the existence of many competing search engine systems. Google is successful because of its own innovation, not because of government-bestowed power. Any other company is free and encouraged to create its own search technology and apply it however it wants. Google is not a utility, and to regulate it as such is an abuse of the law.

11-21-2003, 06:20 AM	#10 (permalink)
Kurant Junkie Location: Don't worry about it.	^^ Hero.