The Google/Verizon proposal for a two-class system for Internet delivery differs from previous proposals rejected by the Federal Communications Commission (FCC) in that it is for cellular carriers only. One thing that makes this interesting is that Verizon is, of course, both a wireline and a cellular carrier, so what it is proposing in essence is net neutrality on its wired service, including Fios, and a two-tiered system for its cellular data service. Verizon certainly gets marks for creativity, and industry response seems to be predictable – the other cellular companies like it, the cable and wired carriers don’t.

The arguments for this approach are that cellular has a different basic technical problem than fibre optic cable – the severe limit of carrying capacity on the available wavelengths. A cellular carrier only has X amount of wavelength to play with, unlike a wireline or cable company, which in theory at least has infinite wavelength, since it can add more fiber cable at any time. Of course, this is theory – in reality cable costs money to install and maintain, so wireline and cable companies are also limited in their resources. And cellular carriers can to an extent increase network carrying capacity by adding new towers to subdivide cells in high demand areas. However, that also costs money and is often politically controversial – people want better cell service, but they do not want cell towers in their back yards. And in some of the highest demand areas – think Manhattan here – viable cell tower sites can be at a real premium even with zoning approval.

So I can hear Verizon and Google arguing that cellular carriers need more freedom to manage the use of their limited network capacity. And while this will inevitably mean that the providers that pay for premium service will get greater accessibility — which is what they are paying for, after all, — this is only for cellular service, and users can get to other sites on their desktops at home or in their offices, or at public WiFi hot spots. From Verizon’s view this probably sounds perfectly reasonable. BTW, I have no idea why Google is co-sponsoring this, given that its major competitors are also large companies such as Yahoo and Microsoft, which certainly can afford the premium service fees, should this be approved.

The problem is that this argument ignores the fast-growing class of users who use their mobile devices as their primary Internet communications tools. This group tends to be highly mobile and includes both people with jobs that require high mobility and people who simply prefer a mobile lifestyle. This certainly includes a lot of middle-class teenagers for whom their cell is their personal computing device, as opposed to a shared and supervised laptop at home. But it also includes a lot of business travelers – both outside sales and support personnel who travel mainly by car and executives such as my former colleagues at META Group who spend their lives flying for business. And then you have people who simply love their iPads and want to use them as much as possible.

This, of course, is an important market for many SMBs. The question for business executives, therefore, is can your business afford to become a second-class citizen on cellular data networks? How much of your business comes through mobile Internet devices, and how fast is that growing? And how fast is it likely to grow as more slate computing appliances come on the market? Unless the answer is none and none, then any move to create a two-class system for Internet services on cellular networks is bad news. Google, Microsoft, and Yahoo will simply pay the premium fees as a cost of doing business. Your company, however, may well find itself as a second class citizen, which certainly will not help business.