[LINK] SMH: 'Google could be your next ISP'

[Roger Clarke]

Google could be your next ISP
ASHER MOSES
The Sydney Morning Herald
18 March 2010
http://www.smh.com.au/technology/enterprise/google-could-be-your-next-isp-20100318-qgtr.html

Google's geeks are taking over the world, starting with online 
services and now with network infrastructure.

Internet behemoth Google now boasts a network that's bigger than all 
but two of the world's ISPs, and telcos fear the search giant is just 
one step away from becoming an ISP itself.

US network measurement expert Arbor Networks this week released a new 
report claiming that, if Google were an ISP, it would be the fastest 
growing carrier in the world and the third largest globally.

"Based on anonymous data from 110 ISPs around the world, we estimate 
Google contributes somewhere between 6-10 per cent of all internet 
traffic globally as of the summer of 2009," Arbor's chief scientist 
Craig Labovitz wrote.

Instead of relying on third parties to deliver its services, the 
search giant has spent billions over the past several years building 
data centres spanning millions of square feet all over the world.

Its equipment is in place at more than 60 public exchanges and, 
Labovitz said, over the past year the company has deployed its Google 
Global Cache servers in more than half of all large consumer networks 
in North America and Europe.

Google has effectively cut out the middleman and now more than half 
of its traffic is sent directly from its servers to the world's 
consumer ISPs, Arbor revealed. Next, it could cut out the ISPs as 
well by offering internet plans itself.

With a wealth of infrastructure already in place, Google recently 
announced it was taking the next step by building an experimental 
fibre-to-the-home network in parts of the US servicing initially 
between 50,000 and 500,000 homes.

Google plans to connect these homes to the internet at blistering 
speeds of 1Gbps. By comparison, the upcoming National Broadband 
Network in Australia is predicted to offer about 100Mbps.

"I think Google is gearing up to be potentially quite a formidable 
competitor to existing telcos and ISPs, given their moves into the 
infrastructure level," Warren Chaisatien, research director and 
principal analyst at Australian firm Telsyte, said.

Indeed, at the recent Mobile World Congress in Barcelona, Google 
chief executive officer Eric Schmidt was heckled by telco 
representatives in the audience who feared that Google was 
increasingly competing with them not only on the infrastructure 
level, but also by selling its mobile phone, the Nexus One, directly 
to consumers online, and by releasing apps such as Google Voice, 
which allows users to bypass the networks to make voice calls.

Schmidt stressed the Google was purely experimenting in an effort to 
see what was required to bring networks up to 1Gbps, which could pave 
the way for more exciting applications and convince telcos to upgrade 
their networks.

Analysts aren't buying it. "I think what we are seeing today is that 
Google is conquering the world, starting from online content but now 
they are building infrastructure," Chaisatien said.
Chaisatien believes that, in the next five to 10 years, the ISP, 
telecoms and utilities industries will merge to form "smart grids". 
He said this was "one of the key arenas that Google intends to play 
very strongly in".

Steve Dalby, chief regulatory officer with iiNet, said the ISP saw 
Google as a significant player in the online world but did not fear 
it any more than other potential competitors.

Peter Coroneos, chief executive of the Internet Industry Association, 
which counts both Google and the ISPs as members, said increasing 
competition between Google and telcos would only provide better 
outcomes for consumers.

He pointed to the roll-out of cable networks in the US, which unlike 
in Australia are not controlled by existing telco players, but by 
companies traditionally in the television space. The end result is 
consumers get more choice and cheaper access to the internet.

"What we're witnessing is technological convergence and, in the long 
term, people are going to be getting their internet access from many 
different sources," Coroneos said.

"Change is necessarily painful but the successful well-managed 
companies will always adapt, and that's why in the face of the cable 
threat in the US the telcos are still profitable companies."

Google's push into infrastructure will inevitably add to fears 
surrounding its overwhelming corporate power, and increase regulatory 
heat on the company. But Coroneos pointed out that Facebook this week 
overtook Google as the most trafficked site in the US, showing that 
dominance can never be assured.

"Competition is important and we have very strong laws in Australia 
to prevent abuse of market power ... so you would expect our 
competition laws to keep it in check," he said.


-- 
Roger Clarke                                 http://www.rogerclarke.com/
			            
Xamax Consultancy Pty Ltd      78 Sidaway St, Chapman ACT 2611 AUSTRALIA
                    Tel: +61 2 6288 1472, and 6288 6916
mailto:Roger.Clarke at xamax.com.au                http://www.xamax.com.au/

Visiting Professor in the Cyberspace Law & Policy Centre      Uni of NSW
Visiting Professor in Computer Science    Australian National University