Google Blasts "Payola Pundit" Over Telecom-Funded Study

Sam Gustin writes: In an unusually sharp rebuke, Google is slamming the author of new report funded by major phone and cable companies, saying he can't be trusted because he's on the industry's payroll. The study, by Scott Cleland of the Precurser Group, claims that Google uses 21 times more internet bandwidth than it pays for, costing taxpayers nearly $7 billion a year.

In a strongly-worded response, Richard Whitt, Google's D.C.-based telecom policy point man, attacked Cleland's credibility, saying because he is paid by the industry, "most people here in Washington take his commentary with a heavy dose of salt."

Cleland is well-known in tech and telecom circles as a paid advocate for telecom and cable companies, including Verizon, AT&T and Comcast. The study was released by NetCompetition.org, "a pro-competition Internet forum funded by broadband companies," of which Cleland is Chairman.

In the industry-funded report, Cleland says Google currently uses 16.5 percent of the internet's total bandwidth, but pays only a tiny fraction of that in broadband costs. The study echoes the famous comments made by former AT&T chief executive Ed Whitacre, who in 2005 charged that web companies like Google are essentially free-loaders who should pay to use his company's "pipes" to deliver content and services.

Cleland charges that Google uses vastly more bandwidth than it actually pays for, resulting in a "$6.9 billion subsidy of Google by U.S. consumers."

Google reacted swiftly and sharply, hours after study appeared.

"We don't fault Mr. Cleland for trying to do his job. But it's unfortunate that the phone and cable companies funding his work would rather launch poorly researched broadsides than help solve consumers' problems," Whitt wrote on the company's blog. "Not surprisingly, in his zeal to score points in the net neutrality debate, he made significant methodological and factual errors that undermine his report's conclusions."

Cleland's report -- which took several months to prepare -- is a shot across the bow aimed at Google and network neutrality advocates. Expect a full-bore confrontation over this issue once Obama -- a network neutrality supporter -- takes office.