Verizon & AOL: What Can We Learn?

Verizon's purchase of media company AOL and the growth of Google Fiber highlight the need to find a balance between content and transport.

Russ White

May 20, 2015

3 Min Read
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If you’re wondering what message to take away from Verizon’s purchase of AOL, just look to Google Fiber. How are these two related? A little history might help.

America Online (AOL) began, along with CompuServe and a multitude of Bulletin Board Systems (BBSes), as a way to find digital content over the top of the telephone network. Dial tone became carrier for bits as people chased whatever digital trends existed before funny cat videos. These services were just that: services designed to connect people together. They didn’t really generate content, they just made sharing content easy enough for the average person.

Over time, these services morphed into providing content, including curated news feeds, some amount of actual reporting and opinion pieces, and the like. AOL, for instance, owns a number of media properties, including Tech Crunch and The Huffington Post. While most technologists will remember the modems and modem banks, most users will remember the running AOL man and the trademark (and grammatically incorrect) message, “You’ve got mail.”

The common takeaway from the success of AOL, and information/services-oriented technology companies in general, is that “You’ve got mail” beats fast modems and high speed access every time. Content is king and services are queen. Or maybe it's the other way around, but you get the point. It’s not about carrying the bits; it’s about what the bits being carried contain.

Looking at the other side of the world, we have Google, the ultimate "over-the-top" service company, putting in its own fiber. As I drove to lunch with a few friends this week, we saw folks out dragging fiber alongside a street in Cary, N.C. The excitement of my friends was palpable about the prospect of high speed Internet access without relying on AT&T or Verizon; fiber to the curb.

What’s going on here? AOL is being bought by a company that traditionally provides transport, and Google, the over-the-top company, is burying fiber. Does this mean the over-the-top model doesn’t really work? Or does Verizon buying AOL tell us that the transport-only mode of running a network doesn’t work -- that Verizon must jump into content to balance out their transport business?

The actual lesson, I think, is something different. It’s ultimately about finding a balance between content and transport. It is, in a sense, a vindication of the separation of transport as a service and content as a service enshrined in the end-to-end principle the Internet started with years ago. At the same time, it's a recognition that neither will truly stand alone at scale.

Over the top is here to stay because walled gardens don’t really attract enough business to stay in business. At the same time, the owner of the network wants users to face a little resistance when stepping outside the virtual world the provider has created, in order to capture as much value from the user as possible. Users can’t be entirely contained, but they can’t be entirely  set free to wander the wide horizons of the Internet at large, if a provider is to optimize revenue.

The key to this model is a clean and clear separation of content from delivery method, along with a recognition that the two must live alongside one another in some practical way. To put it in other terms, software isn’t the same as hardware. Trying to make software completely independent of the hardware isn’t going to work anymore than trying to embed software in the hardware in a way that captures users in a walled garden.

For IT organizations, the lesson might be that we need to pay attention to the end-to-end principle in our own designs --that we need to build networks and organizations that have a boundary, but the boundary needs to be permeable. There needs to be resistance to capture our user’s attention, but a walled garden is going to turn users off just as surely as the old line dial-up services. Content and services are the focal point, but access is part of the service people expect.

About the Author(s)

Russ White

Russ WhiteArchitect, LinkedIn

Russ White is an architect a LinkedIn who writes regularly here and at 'net Work. Russ is CCIE #2635, CCDE 2007:001, is a Cisco Certified Architect, and has earned an MSIT from Capella University and an MACM from Shepherds Theological Seminary. He is currently working towards a PhD in philosophy at Southeastern Baptist Theological Seminary.

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