1. CLASS 4: Business and
Ownership
Net Neutrality

2. What is Net Neutrality?

3. The problem with big
media companies

4. The Googlezon agreement
The Googlezon agreement was written partly in
response to public interest groups and
lawmakers lobbying for the US government to
mandate "net neutrality." In a nutshell, net
neutrality means that internet service
providers like Verizon have to deliver
everything – data, services, whatever – in a
"neutral" way. For example, if we had net
neutrality laws in the US, Verizon wouldn't be
allowed to do things like make Gmail run
faster than Facebook. Neither would Verizon
be able to "prejudice" its consumers against
certain services, for example by making any
peer-to-peer traffic run really slowly.

5. Googlezon cont.
• Google has always been a staunch supporter of net
neutrality, since its income depends on people being
able to access the company's services quickly online.
Imagine if Verizon demanded that Google pay extra to
prevent YouTube from giving you the annoying twirly
circle. Google's business model would be crippled, and
you would probably have to start paying for YouTube
access.
• But nobody has successfully implemented net neutrality
laws in the US. So if Google wants to protect its
business, it has to make deals with companies like
Verizon. And here's where things get ugly.

6. So, what happens to the
internet?
• The internet becomes a pay-to-play medium
• The the Googlezon agreement includes a section where
both companies pledge to keep the "public internet"
completely neutral. Verizon says it won't privilege some
services over others (unless they are "special services"
or "mobile services," but we'll get to that). And for its
part, Google pledges that it will keep all of its services
on the public internet.
• What is "public internet"? Isn't all of the internet public?
Obviously there are internal business and government
intranets that are private, and pay-to-play services, but
the internet itself is by definition public. So why all this
talk from Googlezon about how they'll keep the public
internet neutral?

7. What is “Public Internet?”
• Googlezon is redefining the internet as a tiered service,
like cable. And this new thing called the public internet
is the lowest tier. Kind of like network television is the
lowest tier in your television service options. From here
on out, you will start to see the internet equivalent of
cable service online: For an extra ten dollars, you can
get the "movie lovers" package, where your ISP
privileges Netflix and Hulu traffic, giving them to you
super-fast. For another ten dollars, you can get the
"concerned parent" package, which blocks peer-to-peer
traffic as well as websites that they consider to be
pornographic. And so on.

8. Public internet is for the
poor to keep the "public internet" neutral
• Pledging
is great, but what happens when companies
stop wanting to offer their services on it?
Googlezon has the answer: In their proposal,
they say that it's perfectly OK for companies
and consumers to buy non-neutral, non-public
"special services" online. If you're a media
company that streams videogames, for
example, your customers want a guarantee
that the game won't stall out because of a
crappy "public internet" connection. So you
make your game available only to people with
the special service "gamer package." Your
customers pay you; you pay Googlezon; now
there's a superfast connection for the
privileged few with money to burn.

9. Corporations rule the web
• Though few businesses start without any seed money, it
is still possible for a somebody with a good idea to
launch their project online and attract investors once it
becomes popular. When the internet is a tiered service,
however, this will no longer be possible.
• As Columbia law professor Tim Wu points out in the
New York Times:
• Just consider the power and public role of firms like
Verizon or Google (especially if they work together).
Sitting atop the web, they can influence what firms
succeed or fail — by making sites load faster or slower,
or end up on page 10 of search results. It goes further
— in subtle ways, the information carriers have the
power to influence elections and even censor speech

10. Mobile battleground
• Perhaps the most disturbing part of the Googlezon
agreement is the companies' statement that there will
be no net neutrality on mobile networks. Given that
mobile networks are the future of how most people will
go online, this section of the agreement is the most
pertinent to any prediction about how this agreement
will affect the internet.
• Quite simply, the Googlezon agreement means that if
you access the internet via your Android phone (or
other mobile device), there will be no public internet at
all. Your access to the web will be determined by your
carrier, who may or may not offer special services - and
who may decide to block any content it likes.

11. INFORMATION is a
commodity that is always
in demand.
Who is in charge of your
information?

12. Zuckerburg says “it’s
complicated”
“Our philosophy is that people own their
information and control who they share it with.
. . . One of the questions about our new terms
of use is whether Facebook can use this
information forever. When a person shares
something like a message with a friend, two
copies of that information are created—one in
the person’s sent messages box and the other
in their friend’s inbox. Even if the person
deactivates their account, their friend still has
a copy of that message. We think this is the
right way for Facebook to work, and it is
consistent with how other services like email
work. One of the reasons we updated our

13. • In reality, we wouldn’t share your information in a way
you wouldn’t want. The trust you place in us as a safe
place to share information is the most important part of
what makes Facebook work. . . .
• Still, the interesting thing about this change in our
terms is that it highlights the importance of these issues
and their complexity. People want full ownership and
control of their information so they can turn off access
to it at any time. At the same time, people also want to
be able to bring the information others have shared
with them—like email addresses, phone numbers,
photos and so on—to other services and grant those
services access to those people’s information. These
two positions are at odds with each other. There is no
system today that enables me to share my email
address with you and then simultaneously lets me
control who you share it with and also lets you control
what services you share it with.”

14. Social Graphs & Facebook
• Chris Dixon, co-founder of
Hunch.com, says there is more
than just one kind of social graph
— he argues there are actually half
a dozen different graphs, relating
to things such as location and
recommendations. But one thing is
clear: Facebook wants to own
them all.

15. Social Graphics &
Facebook cont.
• Facebook has popularized the use of the term
“social graph” as a way of describing all the
various social connections you have to people
in your life, both online and in the real world.
But Chris Dixon, co-founder of Hunch.com and
an angel investor in a number of web startups,
says in a blog post published today that there
is more than just one kind of social graph — in
fact, he argues that there are actually about
half a dozen different kinds, including graphs
related to location and recommendations.
Whether he is right or not, one thing seems
pretty clear: Facebook not only wants to own
them all, but is well on its way to doing so.

16. Then comes what you might call a
taxonomy of graphs, which Dixon
says include:
Taste: This is the kind of graph Endorsement: Dixon says that
that Hunch is trying to create, this graph involves people
by looking at questions that recommending things — or
users have answered about a other people — and uses the
variety of topics (the company example of LinkedIn, which is
also has a demo that reveals trying to create an
what it knows about you based endorsement graph for people
on your tweets). GetGlue and who are looking for work.
other services are also explicitly Facebook is also going after
going after this graph. one aspect of this kind of graph
Financial Trust: Payment services with its “like” button plugins.
such as Venmo and even Blippy Local: Companies and services
(which lets you share your such as Foursquare, Gowalla
purchasing habits) are and Loopt are obviously
interested in this graph, which targeting this graph, which
relates to financial connections creates relationships between
between people and companies. people and other people — as
PayPal and other payment well as people and services —
companies are also obviously based on their physical
focused on this graph. location. As Dixon notes, this
graph is highly appealing to
advertisers.

17. • Facebook has a massive head start on
owning virtually every one of these sub-
graphs, with the possible exception of
the “financial trust” graph — and with
Facebook Credits rolling out, it’s likely
the giant social network will get its
hooks into that one soon as well.
Certainly recommendation-based
graphs powered by the “likes” of 500
million users could be fairly powerful.
And when it comes to local, Facebook
appears to be working on features in
that area as well, although it’s not clear
what form they will take.