Verizon, Google strike net-neutrality deal

Google and Verizon’s chief executives unveiled an agreement on Monday that they said would preserve an open Internet, but that critics charged would hurt consumers by eventually making content providers pay for more advanced services. 

Under the agreement, which Google CEO Eric Schmidt stressed is a “joint public announcement” and not a “deal,” large Internet companies would not be able to secure a competitive advantage by paying cable and phone companies to fast-track their content to users. 

{mosads}”That was a principle Google established from the beginning,” said Verizon chief executive Ivan Seidenberg, who joined Schmidt on the call. 

The press conference followed reports last week that the search engine and telecommunications giants were working on a deal on how Internet service providers should treat the traffic running over their networks. 

Suggestions that Google and Verizon were negotiating in private led the Federal Communications Commission (FCC) to suspend its own net-neutrality talks, and raised questions about the future of a key priority of the Obama administration. Those questions were magnified by reports that Google was agreeing as part of the deal to allow companies to pay for faster content delivery, known as paid prioritization, which would have been a major reversal.  

Schmidt blasted the reports — “almost all of which were wrong,” he said — that Google had reversed its stance on net neutrality. 

The backbone of the deal announced by Verizon and Google is for wireline Internet traffic. The proposed deal gives the FCC a role in enforcing a non-discrimination rule. The rules only apply to Verizon and Google, but Seidenberg and Schmidt said they want other Internet, phone and cable players to consider adopting their regulations.

In what could prove a major sticking point for net-neutrality purists, the agreement does not apply the same traffic management expectations to wireless networks. The agreement includes a disclosure rule for mobile services. 

“Our transparency requirement would give people very good information about what services they’re purchasing,” Seidenberg said.

AT&T Vice President of Public Affairs and Media Relations Claudia Jones noted her company wasn’t involved in the discussions, but offered a generally positive statement about the agreement.  

“We remain committed to achieving a consensus solution to the net-neutrality issue, either with the FCC or with the Congress,” she said. “In that sense, the Verizon-Google agreement demonstrates that it is possible to bridge differences on this issue.”

Net neutrality supporters, however, are panning the deal. 

“Some will claim that this announcement moves the discussion forward. That’s one of its many problems,” said Michael Copps, a Democratic FCC commissioner who supports net-neutrality rules. He wants to FCC to take swift action to enforce traffic regulations. 

Gigi Sohn, president of Public Knowledge, said the wireless exemption is problematic and the agreement is unenforceable. 

She also panned a provision of the agreement that allows phone and cable companies to offer faster services for a fee — as long as the traffic does not ride over the public Internet. 

The practice, known as “managed services,” could be appropriate for 3-D video or remote medical monitoring, according to Seidenberg. Both would eat up considerable bandwidth and might not function properly over a public Internet, where all traffic is treated equally. 

“If managed services are allowed to cannibalize the best efforts, Internet — whatever protections are agreed to for the latter become, for all intents and purposes, meaningless,” Sohn said.

Google, however, wants to remain on the public Internet and would not take advantage of managed services, according to Schmidt. “We’re not interested in doing any of those things,” Schmidt said.

Though the proposal provides the FCC with limited enforcement authority, the executives barely mentioned the agency during their press conference. 

“With respect to the FCC, both firms have met many, many times with the FCC. The FCC will review the proposal and make some comments when they get a chance and when they are organized to do that,” Schmidt said. The office of FCC Chairman Julius Genachowski declined to comment on the agreement.  

Seidenberg and Schmidt criticized the tenor of the traffic management debate, which has galvanized die-hard activists on both sides. Seidenberg said the debate has been “hijacked by discussion and issues not reflective of what the companies are doing.” Schmidt said the companies’ effort comes as a way to “set aside that divisive debate.” 

Seidenberg also revealed his view on the tenor of the debate when he was asked which entertainment offerings might be appropriate for non-public networks. He suggested his reply would wind up being printed in a cynical way. Accordingly, he named music from the Metropolitan Opera as an example of an entertainment offering that could demand special services.