If ISPs should be subject to "net neutrality," should companies like Google be subject to "search neutrality"?

When we wrote recently about the idea of "search neutrality," some readers seemed to believe that we had coined the term, but nothing could be further from the truth. "Search neutrality" now fills the FCC filings of companies like Comcast, Time Warner Cable, and AT&T, all of whom see no reason why their businesses should be picked out for regulatory scrutiny while Google goes about its business unmolested.

So where did the idea of search neutrality come from, and what does it mean?

"Get ready to regulate Google"

Net neutrality wasn't dreamed up by consumer interest groups, springing fully formed from the head of Gigi Sohn (Public Knowledge) or Ben Scott (Free Press). Nor did it start as a secret Google plot to clobber the ISPs.

No, net neutrality is just the latest attempt to answer some ancient questions concerning fairness, monopolies, and infrastructure. In 2008, University of Colorado law prof Phil Weiser (now in the Obama Department of Justice) wrote a paper of his own that offered this pithy summary of the basic issue.

In an important sense, the network neutrality debate merely replicates a debate now over one hundred years old in the telecommunications industry and public utility regulation more generally. In particular, a provider of basic infrastructure—a railroad or a telecommunications network—will often seek some share of the available rents from the goods or services carried on their platform. Without regulatory oversight, or countervailing monopoly power on the part of the goods manufacturer (as Standard Oil enjoyed as to oil), the railroad companies were renowned (and detested) for charging supra-competitive prices that limited the potential profits available to the farmers whose goods were shipped via their platform. Similarly, AT&T sought to entirely monopolize the provision of goods that worked in conjunction with its network, famously opposing 'foreign attachments' and claiming for itself the sole right to charge (supra-competitive rents) for applications like telephones that connected to the network. In response to both the abuses of monopoly power by the railroads and the Bell System, calls for transparency and competition policy oversight prevailed on the ground that society could not tolerate a state of affairs where 'a monopoly infrastructure business, in pursuit of its own ends, could take steps that would ruin one business and make another succeed.'

But even when you accept this idea, there are further questions to be answered about where remedies might be applied. ISPs are an obvious chokepoint, but there may be others. (The difficulty of drawing preemptive lines led Weiser to support an antitrust model, where regulators intervene after problems arise.)

Back in 2008, the University of Minnesota's Andrew Odlyzko wrote an important piece called "Network neutrality, search neutrality, and the never-ending conflict between efficiency and fairness in markets" (PDF), which he later updated in 2009.

The piece took a big picture look at the debate over net neutrality, arguing that the ideas behind it were really part of a policy debate "going back for centuries." He and Weiser agreed: the debate reflected a fundamental tension between "efficiency and fairness in markets, a tension that has never been completely resolved."

Odlyzko is a hugely respected voice on the economics of networks and on the growth of Internet traffic, so his words carried particular weight: "Should net neutrality or some similar set of rules come to dominate (either because of market forces, or through regulation), attention would likely turn to other parts of the economy that might be perceived as choke points for social, economic, and political activities.

"If Net search becomes as important as the Google stock price seems to imply, for example, it might be the focal point for such concerns... It is possible to argue that the best outcome might be to have Google defeat AT&T in the battle over net neutrality, but then (and likely in any case) society might have to get ready to regulate Google!"

From the ivory tower to the Grey Lady



As the Genachowski-led FCC started the first official rulemaking on net neutrality in 2009, opponents of the idea followed up on the puckish suggestions of Odlyzko and others. By late 2009, the idea of extending "neutrality" to search was picking up steam in the think tank world.

In October 2009, the libertarian-leaning Progress & Freedom Foundation made the case that "search neutrality" (the term was new enough it still required quote marks) was logically as important as "network neutrality" and that it was not just a "sour grapes" proposal from ISPs. The idea was to show just how far the government would inevitably go if net neutrality became an official rule.

"The basic premise of neutrality regulation is already being proposed for other layers of the Internet—and not just by AT&T in retaliation. One need not agree with all of AT&T’s accusations to recognize that, whatever the FCC might say today, any large online intermediary with a popular platform potentially faces the threat of 'network neutrality' mandates—because every platform is essentially a 'network,' too. We’re not just talking about 'search neutrality' (Google as well as Microsoft) but also about 'device neutrality' (mobile handsets), 'app neutrality' (Apple’s iTunes store, Facebook’s developers and Google’s Android mobile OS) and so on for social networking, email, instant messaging, online advertising, etc."

While PFF is funded mainly by ISPs (AT&T, Comcast, Cox, Verizon, etc.) and big rightsholders (NBC, EMI, CBS, etc.), it also gets money from Google and Microsoft—which don't like this way of thinking at all.

But it soon showed up in the Wall Street Journal, too. That same month, Bret "Exaflood/Exacloud" Swanson, who had formerly worked at PFF, was given the op-ed page to spread some doubt about net neutrality's limits.

"If net neutrality applies neutrally to all players in the Web ecosystem, then it would regulate every component and entrepreneur in a vast and unknowable future," he wrote. "If neutrality applies selectively (oxymoron alert) to only one sliver of the network, then it is merely a political tool of one set of companies to cripple its competitors."

Then came the horror stories. In the late summer and autumn of 2009, UK entrepreneur Adam Raff launched the site searchneutrality.org to describe his own shabby treatment at the hands of Google. Raff's vertical search engine, Foundem, had been "penalized" by Google's search engine. From 2006 through most of 2009, his site was "effectively disappeared from the Internet," and Google soon put him in an AdWords penalty box, too. Yahoo and Bing applied no such penalties. Raff argued that Google was targeting him as a competitor.

After years of appeals, Google finally agreed to manually whitelist Foundem. Two days after Christmas, Raff took the pages of The New York Times to describe his situation but mostly to call for expanded net neutrality rules. If the proposed new principles of "nondiscrimination" and "transparency" were good enough for ISPs, they'd better apply to dominant Internet companies like Google, too.

"Without search neutrality rules to constrain Google’s competitive advantage, we may be heading toward a bleakly uniform world of Google Everything — Google Travel, Google Finance, Google Insurance, Google Real Estate, Google Telecoms and, of course, Google Books," wrote Raff.

Such sites are incorporated into Google's search results; type in part of an address and a Google Maps box appears above all search results. Similar things happen with other services; type in a song title, and Google's special music box appears at the top of the results, allowing users to listen on Lala, iLike, or Pandora. Raff believes this gives Google an unfair advantage; it can enter any market and instantly see massive traffic if it wants to do so, simply by integrating its other products with search.

"Google was quick to recognize the threat to openness and innovation posed by the market power of Internet service providers, and has long been a leading proponent of net neutrality. But it now faces a difficult choice. Will it embrace search neutrality as the logical extension to net neutrality that truly protects equal access to the Internet? Or will it try to argue that discriminatory market power is somehow dangerous in the hands of a cable or telecommunications company but harmless in the hands of an overwhelmingly dominant search engine?"

On to the FCC!

At the FCC, ISPs and other opponents of net neutrality stepped up their discussion of "search neutrality." Google was perceived as the biggest corporate backer of the neutrality idea, and the ISPs wanted to make sure that Google felt a little pain if the FCC went ahead with the rules. Perhaps such a move would convince Google to moderate its stance.

So, in early 2010, we saw comments like this one from Time Warner Cable. "Several application behemoths are among the staunchest supporters of net neutrality regulation, but ironically, much of their conduct appears inconsistent with the principles of openness that they espouse. Most notably, Google has led the charge to adopt regulation to ensure Internet openness, yet it has the ability and incentive to engage in a range of decidedly non-neutral conduct due to its control over so many aspects of the Internet experience. Google’s core search application relies on a pay-for-priority scheme that is squarely at odds with its proposed neutrality requirements for broadband Internet access service providers."

Comcast got in on the fun, too, telling the FCC, "If the Commission were to conclude that an interventionist regulatory regime is needed to preserve the ‘neutrality’ of the Internet, it could not defensibly apply that regime to broadband providers but not to Google (or any other provider of Internet-based services)."

AT&T went so far as to tell the FCC that nothing it could possible do would be as worrisome as what Google was up to. "And more than any physical network provider, search engines pose concerns that the [rulemaking] identifies as a potential basis for government intervention: They 'determine the information . . . that customers access online' through algorithms that highlight some information, favor certain websites, and even omit some sites altogether. As a result, they can 'deter[] market entry in areas that would benefit consumers and damage[e] potential entrants.' Just as search engines dominate the selection of winners and losers on the Internet, one search engine in particular—Google’s—dominates the search engine market."

And the Competitive Enterprise Institute told the FCC that "one could just as credibly—that is, perversely—make a case for 'Search Neutrality' (All search results shall appear first!)." (No, we don't have any idea what that last jab means, either.)

What does it mean?

The whole idea of search neutrality remains murky (though net neutrality's opponents often level the same charge at that idea). Search algorithms, by definition, aren't "neutral"—it's not even clear what "neutral" would mean in such a situation. The algorithms are designed to assign value and then discriminate based on that value to produce a list of relevant results. Being discriminatory is the entire point of the exercise.

Search neutrality proponents, though, want to see more transparency about how such algorithms work. And, even if the algorithms are necessarily subjective descriptors of relevance and value, they can at least be applied in a straightforward way (i.e, by not penalizing sites like Foundem and making it unclear how to escape the penalty box). Others who use the term are concerned about the power of search engines like Google to promote Google's other services (essentially an antitrust, not a "search," concern; Google has had plenty of these lately). Finally, some ISPs apparently object to the whole practice of Google awarding ads to the highest bidder when they aren't allowed to squeeze companies like Google for extra cash for extra speed.

What did Odlyzko's paper conclude about handling this issue? "For telecommunications, given current trends in demand and in rate and sources of innovation, it appears to be better for society not to tilt towards the operators, and instead to stimulate innovation on the network by others by enforcing net neutrality. But this would likely open the way for other players, such as Google, that emerge from that open and competitive arena as big winners, to become choke points. So it would be wise to prepare to monitor what happens, and be ready to intervene by imposing neutrality rules on them when necessary."

In other words, apply net neutrality now—but keep search neutrality close at hand.