Want to kill the web? There's an app for that.
Wired magazine sure picked a good time to declare "the Web is dead" and herald the foreboding rise of the "Internet" -- by which it means a newly powerful, vaguely malevolent, premium-services-based online world with competing content fiefdoms, controlled by powerful corporate interests.
Wired's vision is prescient because it fits well with what Google (GOOG) and Verizon (VZ) seem to be proposing with their recently announced net neutrality compromise, if the worst of the pessimists' fears are realized. (Net neutrality is the basic concept that broadband providers can't pick winners and losers on the Web or discriminate against rival content.)
In essence, the Google-Verizon compromise calls for net neutrality for wired networks and no net neutrality for wireless networks. In that sense, it's a straight-up deal. But a third aspect, the "managed services" provision, is the most opaque and troubling component, and it sounds eerily similar to the direction Wired is hinting at in the piece. Basically, Google and Verizon have proposed a separate network from the "public Internet" -- a "private Internet," if you will -- where nondiscrimination rules wouldn't apply and where wealthy companies would be able to buy proprietary chunks of bandwidth and superfast connections.
Reason for Pessimism
Open web, closed web, net neutrality, "reasonable network management" and now "managed services."
Wired co-authors Chris Anderson and Michael Wolff are both pessimistic about the future of the open web, and they have reason to be. It's natural that powerful financial interests would increase their control of the web, which has turned many a computer geek into millionaires. Reading about the great land runs of the 1880s and 1890s the other day had me envisioning scenes of thousands of immigrants racing across vast tracts of American prairie on horseback and foot, grabbing the best-looking plot they could find and putting down their stake. That's kind of how I envision the early days of the web, or the Net as it was called: the culture of the Well, Usenet, the birth and incredible journalism of Wired and others that cataloged what became a catastrophic business story. When the dot-com bubble burst, it dragged down the entire U.S. economy.
The pessimistic view of Wired's package seeks to capture the bubbling discontent among many observers who see well-heeled corporate interests trying to gobble up and control huge chunks of the web. AT&T (T), Comcast (CMCSA), Verizon and Time Warner Cable (TWC) already control most of the Internet's hardwired broadband infrastructure -- including the all-important "last-mile" to the home. They spent the billions to build all that capacity, and they don't like seeing Google and others making billions in profit over their "pipes." They want a bigger cut.
Content companies like News Corp. (NWS), Viacom, (soon-to-be) Comcast/NBC Universal, Google (despite its protestations of not being a media company), Yahoo (YHOO), AOL (AOL) (the parent of DailyFinance) and yes, even Wired's owner Conde Nast, want a bigger piece of the online revenue pie as well. (Previously, I worked at Conde Nast Portfolio and have freelanced for Wired.com.)
Managed Services, Steve Jobs and Shifting Strategies
Setting aside Google's dramatic abandonment of support for wireless net neutrality, it's the "managed services" component of the search giant's deal with Verizon that's most confusing and potentially dangerous to what Google has taken to calling "the public Internet." The companies say this separate, nonpublic, ultra-high-speed network would be used for things like fast medical file transfers, secure banking and low-latency (instant response) online gaming. Google has insisted very publicly that it would never abandon the "public Internet" in favor of using some of its $20 billion cash hoard to buy priority access or hyperspeeds from the providers. After all, the "public Internet" has been very good to Google.
The kingpin in this dystopian vision is Apple (AAPL) CEO Steve Jobs, of course, because he's seen as leading what Wired Editor Anderson describes as "the move from the wide-open Web to semiclosed platforms that use the Internet for transport but not the browser for display."
It would be foolhardy to underestimate Jobs's influence. The Apple CEO almost singlehandedly transformed three important tech industries. He popularized the PC. Ten years later he figured out a solution to the record industry's then-impending -- and still ongoing -- implosion (which the industry itself still can't seem to figure out). And, of course, his iPhone and iPad have have been hugely transformative, amazingly successful consumer devices.
Speaking of Apple, it's quite interesting that Wired should declare the death of the web just as the magazine is trying to move to its iPad application -- $4.99 -- while simultaneously painting Jobs as among those responsible for the shift away from the open web.
Contrast Jobs's approach with that traditionally pursued by the comparatively benevolent Google guys. They've basically been giving away their wares -- including the Google search box, the invention of the generation -- while capitalizing on economies of scale and algorithms to add up clicks that amount to trillions of pennies. But with the "managed services" provision of its Verizon deal, Google is moving away from its roots toward a future that looks all the more like the one Jobs has in mind: premium pipes, premium content and premium products.
The Most Premium Cable-TV Network Imaginable
Against this backdrop, Jobs looms large indeed. Princeton computer science researcher Tim B. Lee recently summed up the fears of those who think the web is giving way to the Internet, based on discrete, task-oriented apps. "Jobs's vision of the future is one that revolves around a series of proprietary 'stores' -- for music, movies, books, and so forth-controlled by Apple. And rather than running the applications of our choice, he wants to limit users to running Apple-approved software from the Apple 'app store.'"
The fear is that the Web's sprawling, free-for-all nature will be carved up by the forces of money, into the equivalent of a giant virtual mall, or perhaps the most premium cable-TV network you can imagine. Mobile devices like tablets, smartphones and laptops will become the predominant means of getting "online." And while the public Internet will remain, broadband providers will dangle incentives -- like they do for cable TV -- to entice you to upgrade to the most premium services. Yes, costs for consumers will rise.
I see no reason that Apple, with its $46 billion cash hoard couldn't use some of those funds to simply buy its own private broadband channel through a deal with one or more of the broadband providers. Similarly, once it buys NBC Universal, Comcast could offer NBC's rich programming content on a "managed services" -- prioritized -- basis to its 25 million cable customers. And Verizon, of course, is angling to deliver its own high-speed offering, FiOS, on a "managed services" basis. On the bright side, under the Google-Verizon deal, companies will have to disclose what their "managed service" products are. But how else were they going to advertise those services anyway?
Searching for the Real Google
Larry Page and Sergey Brin made a convincing case that they were creating "a different kind of company" six years ago when they took Google public. It was about more than just money; it was about the public interest. Along the way, the company built a massive amount of trust -- just consider that every second, millions of people are typing their thoughts into someone else's system without any qualms.
That code of the "the public good" is still in Google's DNA, but a $120 billion public company can't be run with the same naive idealism that a pair of brilliant PhD students running around Palo Alto during the height of the tech boom had. Is it disappointing? Yes. Has Google now stabbed the web through the heart? No.
But the future of something Google used to call "the open Internet" for years and now calls "the public Internet" is gloomier than it was three weeks ago -- before news of its proposal with Verizon emerged. Google CEO Eric Schmidt insists, of course, the company will stick with the public Internet. But just two years ago, Google supported wireless net neutrality, too.
Despite Wired's dire proclamation of the death of the Web, the public Internet won't be perish anytime soon. But given the Google-Verizon proposal, it's prognosis just got a little grimmer.
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