MyDD :: Internet Freedom Opponents Propose Regulation of Search Engines?

Internet Freedom Opponents Propose Regulation of Search Engines?

by Matt Stoller, Wed Apr 26, 2006 at 07:12:19 PM EST

This is amazing. Charlie Gonzales proposed and 10 other Congressmen voted for an amendment to investigate search engines.

Update: The bill passed 42-12, but not before AT&T got off its final counterattack, just before passage around 7 p.m. In the empty room, right before final passage, Gonzales, from the home town of AT&T, San Antonio, offered an amendment to require the FCC to make a study "competition in the Internet world," particularly what he called "special arrangements" between Web sites and other companies. It would be similar, he said, to the type of tie-in arrangements that proponents of Net Neutrality said will exist with telephone companies favoring content. Such arrangements between Web sites and others, Gonzales says, would make it hard for a "garage-bases startup" to make a go of it. Citing an article from Southwest Airlines' magazine, he noted that Google gets revenue from ads tied to searches and that Yahoo is "fighting for deals."

Democrats were flabbergasted. Eshoo, who represents Silicon Valley, said she was "baffled by the amendment, because Gonzales, who earlier said he was opposed to regulating the Internet. This, she said, "is about regulating search engines." Markey said he was preparing an amendment to expand the study to include the top five telephone companies and top five cable operators, but didn't get to offer it. The Gonzales amendment was defeated 11-43, but Google, and Yahoo! and the others should be on notice. This isn't over. They are squarely in the gunsights.

This is hardball. Well guess what? We've got a possible primary challenger to one of the Verizon/AT&T five. I'll have more soon.

Tags: net neutrality, primary project, Charlie Gonzales (all tags)

Permalink :: 24 Comments :: Post a Comment

Re: Internet Freedom Opponents Propose (none / 0)

Tuesday evening I ran into a former member of congress who is now lobbying for the Telcos. I have always considered him, and still do, to be a progressive, smart, accomplished, fair guy. As a former lobbyist I know that it is unavoidable that the power of money is...well...powerful.

Anyway, he had special venom for the search engine companies when the net neutrality issue came up. The real bottom line was how testy and emotional he was about the issue. That is a small but good sign for our side. Lobbyists tend to be cool, calm and collected -- especially when dealing with relitive nobody's like me and when they are winning. When a lobbyist let's his opposition see some sweat, it means things are not quite going as planned. We have not won this by a long shot but we are sure in the game.

by howardpark on Wed Apr 26, 2006 at 07:45:18 PM EST

Re: Internet Freedom Opponents Propose Regulation (none / 0)

i assume your talking about charlie barron, nyc councilman, versus ed towns

by yomoma2424 on Wed Apr 26, 2006 at 08:04:45 PM EST

Re: Internet Freedom Opponents Propose Regulation (none / 0)

Nope.

by Matt Stoller on Wed Apr 26, 2006 at 08:31:40 PM EST
[ Parent ]

Re: Internet Freedom Opponents Propose Regulation (none / 0)

Someone running against Bobby Rush?

Independent Illinois Grassroots: IllinoisDemNet.com

by patachon on Wed Apr 26, 2006 at 09:07:57 PM EST
[ Parent ]

Re: Internet Freedom Opponents Propose Regulation (none / 0)

Thank god. Charlie Barron is a little nuts.

by antidoto on Wed Apr 26, 2006 at 10:24:46 PM EST
[ Parent ]

Re: Internet Freedom Opponents Propose Regulation (none / 0)

"Google, and Yahoo!"

They should help send the primary signal.

by Jerome Armstrong on Wed Apr 26, 2006 at 08:23:58 PM EST

Omigod! This is actually looking good... (none / 0)

Just scanning the opening statements on the House Judiciary Committee site from the hearing on Tuesday gives the merest sensation of an incipient warm glow.

When you find you've got Microsoft on your side, that's worth a modest sigh of relief. And, with the antitrust thing, you feel the witnesses (other than Brer McCormick of the NTSA, natch) are positively playing footsie with Sensenbrenner.

Apparently, there is not only a jurisidictional question as between Commerce and Judiciary in the House, but also between the FCC and the FTC.

I don't know how much the former is based on principle, personal animosity or a general fin de régime slide towards warlordism and anarchy.

Either way, I sense we may not need to call on Uncle Harry's services. Though it seems the Senate is going a different way entirely on telecoms legislation.

Just this once, I may be more optimistic than Stoller...

by skeptic06 on Wed Apr 26, 2006 at 09:28:19 PM EST

Re: Internet Freedom Opponents Propose Regulation (none / 0)

We've got a possible primary challenger to one of the Verizon/AT&T five.

Isn't this exactly the sort of tactic attacked in Crashing the Gate. I mean, why is it bad for NARAL to oppose anti-abortion Democrats, but OK to get primary opposition for pro-telco Democrats??????????????

by Alice Marshall on Wed Apr 26, 2006 at 10:22:35 PM EST

Wouldn't it be better to support Democratic (none / 0)

challengers of pro-telco Republicans? Thus gaining a reputation for protecting our friends?????????????????????

by Alice Marshall on Wed Apr 26, 2006 at 10:25:23 PM EST
[ Parent ]

Gonzalez (none / 0)

Charlie Gonzalez is really different from his father Henry B Gonzalez. His father was a bit of a hot head (he punched our someone for calling him a communist) but he was pretty ethical. He wouldn't take contributions from the banking community when he chair the Banking Committee in the late 1980s and early 1990s.

by John Mills on Wed Apr 26, 2006 at 10:27:27 PM EST

Re: Internet Freedom Opponents .of Search Engines? (none / 0)

Gonzales seems to ask why a business relationship between a search provider and one of its advertisers should be viewed differently than a business relationship between a search provider and a telco when both scenarios have potential for bias. Perhaps the monopoly/duopoly status of the telco/cable providers is enough of a justification but I'm not sure it would convince all audiences. Admittedly the search engine market today is more competitive, but so once was the browser market.

Oh, and I'm not sure having Microsoft on my side makes me feel more like Mother Teresa....

A balanced argument is always more convincing.

by jss on Wed Apr 26, 2006 at 10:48:59 PM EST

Re: Internet Freedom Opponents .of Search Engines? (none / 0)

A balanced argument is always more convincing.

In this case, the right analogy is from the movie version of The Lost World, where the dinosaurs are fighting each other and the hapless humans are trying not to get stepped on.

What we're seeing here is a fight to the death between the old way of doing networks and the new way. The new way, the telcos will be little more than toll booth collectors, rather than the traffic cops they want to be.

I think we can safely say that the telcos vision of the Internet is dangerous and must be stopped. So today we side ourselves with M$ and Google.

But we watch our backs and we don't get naive that these are the good guys, cute season-specific web pages notwithstanding....

by Taylor26 on Thu Apr 27, 2006 at 07:58:15 AM EST
[ Parent ]

Re: Internet Freedom Opponents Propose Regulation (none / 0)

Charlie Gonzalez is a piece of work. And, I guess, very friendly with his hometown telcos. Last time I heard him speak in a forum, there was nothing he said to make me think he wasn't a Republican, and a very slick, nasty one at that. Numero Uno would seem to be his greatest concern.

by Bean on Wed Apr 26, 2006 at 11:22:22 PM EST

Re: Internet Freedom Opponents Propose Regulation (none / 0)

Things are never a simple as they seem.

There are really only three major search engine companies: Google, Yahoo, and Microsoft. This has two effects, one is on their control of access to information. Since most people reach new sites via a search they are in effect, gatekeepers for the web. I detail the issues here:

Google Monopoly

The other issue is their dominating the online advertising business through their monopoly positions as search engines. It is a variation of "pay to play". If a firm doesn't buy into favorable placement in search results they will have a limited audience. This puts the screws on those having to advertise as well as freezing out other portal sites that might want to compete.

I don't have any suggestions, I'm just pointing out the problems.

---Policies not Politics
Daily Quiet Image

by rdf on Thu Apr 27, 2006 at 09:28:23 AM EST

Re: Internet Freedom Opponents Propose Regulation (none / 0)

A google monopoly? You don't know what you're talking about. There are basically no barriers to entry in the search engine business.

by Matt Stoller on Thu Apr 27, 2006 at 10:01:15 AM EST
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Re: Internet Freedom Opponents Propose Regulation (none / 0)

No barriers?

1. There are no technical barriers. Just set up a series of bots and gather what you will, but...

2. You need the infrastructure to hold the data. That just costs money - millions

3. You need to attract viewers and have a business model, or are you going to run the service as a charity? That implies more millions for marketing.

4. You need to persuade those with contracts with the big three to also advertise on your site (that is if they aren't already in restrictive contracts).

5. If its so easy, why are there only three dominant players?

---Policies not Politics
Daily Quiet Image

by rdf on Thu Apr 27, 2006 at 10:18:21 AM EST
[ Parent ]

Re: Internet Freedom Opponents Propose Regulation (none / 0)

Yes, there are some elements of market power and barriers to entry in today's search market, but they are nothing like the monopoly/duopoly structure of the access pipes...not to mention that users' switching costs are tiny and there's certainly room for targeted-search companies. And the degree of innovation and competition in the search and web-service spaces are FAR beyond the limited price/bundle competition of the pipe owners. And, while Google's search/ad business have become a powerful force on the web and the economy in general, it must (and does) work feverishly to retain its edge, not only over Yahoo, MSFT, but also Ebay, Amazon and a host of other web players (and also the pipe-owners). And even Google cannot so easily leverage its market power either horizontally or vertically, in spite of its many efforts to do so. And, while there may be three dominant players, there's a bunch of others in the search market and there's always the possibility that some newcomer might hit on a better idea that, due to low switching costs, can quickly gain market share. Trying to draw market-power parallels between search and pipes is not a useful exercise and only feeds the obfuscation strategies of the duopolists, (which was attempted clumsily by McCormick in the recent House Antitrust hearing)

by mitchipd on Thu Apr 27, 2006 at 03:20:04 PM EST
[ Parent ]

Re: Internet Freedom Opponents Propose Regulation (none / 0)

The structure of the american economy favors oligopoly - partly because of the way capital is allocated. But this is not an argument over economics, it is an argument about politics and democracy. Net neutrality means that carriers cannot decide to shut down BartCop because their insurance company advertisers are uncomfortable with his opinions

by flyoverperson on Sat Apr 29, 2006 at 11:58:42 AM EST
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Reply (none / 0)

Net neutrality is not a bad thing, but it simply does not belong to the class of things that should be law worthy. Congres has much better things to be doing than wasting its time on a non-issue.

by pkp646 on Thu May 04, 2006 at 11:19:37 AM EST
[ Parent ]

Re: Internet Freedom Opponents Propose Regulation (none / 0)

Google's patents on page rank are a significant barrier to entry in the search business, and a major reason the company has an effective monopoly on search. While no communications company gets more than 10% of the consumer dollars spent in that market, Google has almost all of the search business.

But perhaps it won't always be this way. The dirty little secret of Google's success is that their algorithm - which assigns page rank based on the number and quality of inbound links - doesn't work as well as it used to. In fact, you now have to page through several pages of hits to find something decent, much as you had to do with AltaVista before Google came along. It's a question of the large size of the web.

So Google has another ace in the hole in the form of its server management techniques, which allow it to respond to searches very quickly. Slow down Google's links just a little and they become very vulnerable. Or so they think.

Google's partners in funding the Internet Over-Regulation Coalition include fellow monopolists Microsoft (found guilty in a court of law, fellas), Amazon, and eBay. They're very much like the AT&T of old and very unlike the AT&T of today.

by bubbadude on Thu Apr 27, 2006 at 03:50:00 PM EST
[ Parent ]

Re: Internet Freedom Opponents Propose Regulation (none / 0)

Several colleagues of mine and I wrote some research papers in the early 1970's about using links to determine relevancy when retrieving documents.

Do you think I should bring it up and claim that Google's patents are invalid? I'm always amazed at how each new generation reinvents the wheel and thinks they have discovered something new. Perhaps Google should do some searches of their own on prior art.

What it shows is the complete corruption of the patent process and the misuse of copyright and other intellectual property constraints.

---Policies not Politics
Daily Quiet Image

by rdf on Thu Apr 27, 2006 at 05:35:09 PM EST
[ Parent ]

Re: Internet Freedom Opponents Propose Regulation (none / 0)

It's not too surprising that Google's patent examiner would have missed your papers if you and your colleagues didn't file any applications, but I imagine they'd be of considerable interest to Yahoo and Microsoft.

It's only a matter of time before somebody builds a better search engine by doing all that Google does plus some semantic parsing, but it won't amount to anything without lots of legal talent and tons of capital to build the server farms and buy the high-speed links.

by bubbadude on Thu Apr 27, 2006 at 10:24:10 PM EST
[ Parent ]

Re: Internet Freedom Opponents Propose Regulation (none / 0)

No.

by Matt Stoller on Fri Apr 28, 2006 at 08:28:48 PM EST

Reply (none / 0)

The most amazing thing about this is not that it happened, but that it took so long to occur. If anyone is seriously responsible for neutrality legislation it is the search engines. However, like the internet in general, I wish the governmetn would just keep out of this issue.

by pkp646 on Thu May 04, 2006 at 11:17:53 AM EST

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