Google can't seem to win one, and big telcos and cable TV companies can't seem to lose. After not getting what it wanted out of its campaign to change 700 MHz auction rules, Google's other pet telecom issue, net neutrality, has been dealt a major blow. The U.S. Department of Justice, echoing a recommendation from the Federal Trade Commission earlier this summer, said it opposes the creation of net neutrality policy that would bar service providers from offering different broadband access pricing tiers.
Net neutrality proponents believe telcos and cable TV providers offering broadband will use those tiers to offer well-to-do customers, content companies and web site operators a premium-priced, higher-quality fast track on the Internet, while leaving the great unwashed in a slower, less reliable lane. Google, of course, can afford the fast track; it's in the net neutrality fight only on principle. It believes that only an open Internet is capable of producing great innovations (like YouTube, which Google can then buy).
Amid wireline revenue declines, the success of telcos in the future relies on their ability to create these kinds of value-added services or service tiers. They have the power to successfully fight net neutrality policy, so it's only a matter of time before this hot topic of the last year and a half becomes a dead issue.