Why Google Just Bought Nest, the “Smart Thermostat” Company
Google just announced that it’s buying Nest for $3.2 billion, in the highest-profile tech acquisition of the young year.
Nest is best known for its smart thermostat, which learns your habits over time and adjusts your heat settings accordingly. More broadly, the startup appeared well-positioned to build a platform for other Internet-connected devices in the home.
From Google’s statement:
Nest’s mission is to reinvent unloved but important devices in the home such as thermostats and smoke alarms. Since its launch in 2011, the Nest Learning Thermostat has been a consistent best seller—and the recently launched Protect (Smoke + CO Alarm) has had rave reviews.
Larry Page, CEO of Google, said: “Nest’s founders, Tony Fadell and Matt Rogers, have built a tremendous team that we are excited to welcome into the Google family. They’re already delivering amazing products you can buy right now–thermostats that save energy and smoke/CO alarms that can help keep your family safe. We are excited to bring great experiences to more homes in more countries and fulfill their dreams!”
Tony Fadell, CEO of Nest, said: “We’re thrilled to join Google. With their support, Nest will be even better placed to build simple, thoughtful devices that make life easier at home, and that have a positive impact on the world.”
Nest will continue to operate under the leadership of Tony Fadell and with its own distinct brand identity. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the US. It is expected to close in the next few months.
For Google, this continues a big new push to apply its machine-learning expertise to physical objects, from self-driving cars to robots and now home appliances. Once a search company, Google has been broadening its focus over the years to artificial intelligence and machine learning in myriad forms. It’s probably best thought of at this point as a machine-learning company. That is, its goal is to imbue machines with the ability to respond and adapt themselves to human behaviors and environments, so that machines become not only more personalized, but fundamentally more human-like.
The acquisition of Nest implies that Google sees the home, along with the car and the smartphone, as one of the primary frontiers for this project. The end goal would be a home that gets to know you better the more you use it—not entirely unlike the vision of the automated home that you saw in The Jetsons.
Federal court strikes down FCC net neutrality rules
A federal appeals court has struck down important segments of the FCC’s Open Internet rules, determining that the agency doesn’t have the power to require internet service providers to treat all traffic equally. The DC circuit court has ruled on Verizon v. FCC, a challenge to the net neutrality rules put in place in 2010, vacating the FCC’s anti-discrimination and anti-blocking policies, though it preserved disclosure requirements that Verizon opposed — in other words, carriers can make some traffic run faster or block other services, but they have to tell subscribers.
The problem isn’t that the court opposed the FCC’s goals, it’s that unlike older telecommunications providers, ISPs aren’t classified as “common carriers” that must pass information through their networks without preference. By enforcing net neutrality, the court found, the agency was imposing rules that didn’t apply to carriers. It’s an issue that net neutrality supporters have been worried about for years: “The FCC — under the leadership of former Chairman Julius Genachowski — made a grave mistake when it failed to ground its Open Internet rules on solid legal footing,” says Free Press president Craig Aaron. “Internet users will pay dearly for the previous chairman’s lack of political will.”
Despite striking down parts of the rules, Judge David Tatel said that the FCC should have some authority to regulate service providers. The FCC justified its rules partly by saying that the Open Internet order promotes broadband development, an explicit agency goal. While opponents of net neutrality have said that there’s little evidence these rules actually help, Tatel disagreed, saying that the idea was “both rational and supported by substantial evidence.” Verizon also argued that Congress was responsible for passing regulations, but “although regulation of broadband Internet providers certainly involves decisions of great ‘economic and political significance’ … we have little reason given this history to think that Congress could not have delegated some of these decisions to the Commission.”
Notably, Tatel also agreed that striking down net neutrality could have negative effects on consumers. “The commission has adequately supported and explained its conclusion that absent rules such as those set forth in the Open Internet Order, broadband providers represent a threat to internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment,” he said, saying that broadband companies have “powerful incentives” to charge for prioritized access or to exclude services that competed with their own offerings.
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