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Google and Verizon try to decide future of internet

AT&T has unveiled a free content store partnership

Turns out Google and Verizon were up to something after all. Behind the scenes the two companies have been doing what the FCC failed to do – forge a compromise agreement on net neutrality. The only thing is that the wording of the agreement raises some of the same concerns that emerged last week when word of the deal was first heard.

A joint policy proposal for an open internet was posted by representatives from both Verizon and Google on Monday evening, following up on the shared statement of principles outlined by the two firms in October of last year. The foundation of the agreement is supposedly defined by two goals: Users should choose what content, applications, or devices they use, since openness has been central to the explosive innovation that has made the internet a transformative medium; and America must continue to encourage both investment and innovation to support the underlying broadband infrastructure.

The joint proposal laid out by Alan Davidson, Google director of public policy and Tom Tauke, Verizon executive vice president of public affairs, policy, and communications, takes the form of a suggested legislative framework with seven key elements:

1)      Wireline broadband openness principles, which ensure that consumers have access to all legal content on the internet, and can use what applications, services, and devices they choose. Those principles should be fully enforceable at the FCC.

2)      Wireline broadband providers would not be able to discriminate against or prioritize lawful internet content, applications or services in a way that causes harm to users or competition. Wireline broadband providers also could not favour particular internet traffic over other traffic.

3)      Enforceable transparency rules, for both wireline and wireless services. Broadband providers would be required to give consumers clear, understandable information about the services they offer and their capabilities. Broadband providers would also provide to application and content providers information about network management practices and any other information they need to ensure that they can reach consumers.

4)      Because of the confusion about the FCC’s authority following the Comcast court decision, the proposal spells out the FCC’s role and authority in the broadband space and provides for a new enforcement mechanism for the FCC to use including the power to impose a penalty of up to $2m on bad actors.

5)      The proposal would allow broadband providers to offer “additional, differentiated online services, in addition to the internet access and video services (such as Verizon’s FIOS TV) offered today”. Health care monitoring, the smart grid, advanced educational services, or new entertainment and gaming options are given as examples. The FCC would also monitor the development of these services to make sure they don’t interfere with the continued development of internet access services.

6)      Most of the proposals would not apply to wireless, except for the transparency requirement.

7)      The companies announced their support for reform of the Federal Universal Service Fund, so that it is focused on deploying broadband in areas where it is not now available.

On the surface, the agreement looks good, especially the reestablishment of the FCC’s authority after the Comcast decision shook things up. “Google and Verizon have done what the FCC has so far failed to do: forge a meaningful compromise on net neutrality between the two sides,” said Jan Dawson, chief telecoms analyst at Ovum. “Verizon has made real concessions here, notably forgoing paid prioritization on the public Internet. The agreement also proves that last week’s rumours and the accusations lobbed at Google were untrue, and it should get some credit for standing firm on the prioritization issue in particular.”

But the alarm bells should start ringing at points five and six. With mobile broadband connections growing at a surprising rate, something seems amiss if these rules are not applied to the wireless network. In fact applying these policies to the fixed line but not wireless makes it seem like wireless would just turn into the digital Wild West.

Secondly, as a number of pundits have picked up on, point five is a major loophole for operators, using vague terminology that suggests the foundations for an officially tiered internet have already been laid.

“The companies have provided very little detail about this in the policy proposal or in their conference call, and it is incredibly vague as it stands. Despite the prohibition on paid prioritization, this category seems designed to do allow some services to benefit from exactly that. It is, in effect, a sort of Private Internet, either physically or logically separate from the public Internet, with different rules,” said Dawson.

The Ovum analyst points to Verizon’s FiOS TV service as an example, which runs on a parallel channel on Verizon’s fibre lines to its customers’ homes, and doesn’t touch the public internet. However, the other more general examples cited by the companies include health care monitoring, smart grid, educational and entertainment services. It is not clear on what infrastructure these services would run, or exactly what the dividing line would be between these services and the elements of the public internet Verizon uses for its broadband service.

“This, together with the exemption for wireless networks, is likely to be the largest sticking point in getting the broader range of stakeholders to agree to move forward with the companies’ proposal. As presently defined, this category of services is so wide as to make the other provisions almost meaningless. The definition and limits for this category will have to be tightened up considerably before they can be meaningful,” said Dawson.

Now the ball is in the FCC’s court. Having abandoned similar talks with all the major industry stakeholders without making any progress, this proposal, with all its flaws, could still be a useful tool for the FCC to pick up where it left off.

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One comment

  1. Loop 10/08/2010 @ 8:36 pm

    In Romania/Europe I had 100mbps in any direction with only $23/month. I lived there for 5 months and I WILL REMEMBER the internet connection from Ilink Telecom (local ISP)

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