Google Verizon Proposal Gets Little Immediate Support

News of the agreement last week led indirectly to the collapse of broader discussions at the FCC on what officials there call a tougher proposal that would not have excluded wireless (CD Aug 6 p1), though Chairman Julius Genachowski later made a round of calls keeping alive the possibility of a broader agreement (CD Aug 9 p1). Public interest groups went on the attack Monday, repeating many of the criticisms they made last week.

"Because of the unique technical and operational characteristics of wireless networks, and the competitive and still-developing nature of wireless broadband services, only the transparency principle would apply to wireless broadband at this time,” the agreement (http://xrl.us/bhvks6) says in a key passage. “The U.S. Government Accountability Office would report to Congress annually on the continued development and robustness of wireless broadband Internet access services.”

Wireline providers would be prohibited from engaging in “undue discrimination against any lawful Internet content, application, or service in a manner that causes meaningful harm to competition or to users,” the agreement says. Prioritization would be presumed to be “inconsistent with the non-discrimination standard, but the presumption could be rebutted."

The FCC could enforce “consumer protection and nondiscrimination requirements through case-by-case adjudication” but would have no rulemaking authority. However, if actual harm is demonstrated, the FCC could assess fines “up to $2,000,000 for knowing violations of the consumer-protection or non-discrimination provisions."

FCC Commissioner Michael Copps said the FCC should move forward on reclassification regardless of any agreements between the companies. “Some will claim this announcement moves the discussion forward,” Copps said. “That’s one of its many problems. It is time to move a decision forward -- a decision to reassert FCC authority over broadband telecommunications, to guarantee an open Internet now and forever, and to put the interests of consumers in front of the interests of giant corporations.”

The agreement “falls far short of the net neutrality principles necessary to protect consumers online,” said Rep. Jay Inslee, D-Wash., a member of the House Communications Subcommittee. “I'm disappointed that such esteemed leaders would put forward a policy proposal that fails to protect the very foundation of the Internet’s success -- open access for all. ... Today’s announcement is one more reason that the FCC must act to reclassify broadband and protect consumers online.” Other Hill lawmakers didn’t immediately comment.

Media Access Project Senior Vice President Andrew Schwartzman told us the Google-Verizon agreement is weaker than the agreement that was being negotiated at the FCC. The consumer protection standard is weaker, since “proving harm is almost impossible,” he said. The managed service standard is “much broader than what they were talking about” at the FCC, and wireless is exempted in the agreement, he said. He found the consumer protection provisions “particularly troublesome,” he said. “The fact that there is supposedly a transparency requirement offers scant reassurance. As the Comcast case demonstrated, some carriers lie to their customers. And a cap on fines at a $2 million dollar fine is a rounding error on the balance sheet for companies like Verizon."

"If codified, this arrangement will lead to toll booths on the information superhighway,” Free Press said. “It will lead to outright blocking of applications and content on increasingly popular wireless platforms. It would give companies like Verizon, Comcast and AT&T the right to decide which content will move fast and which should be slowed down. And it will destroy the open Internet as a platform for small business innovation and job creation, cementing companies’, like Google’s, dominant market power online."

"The agreement between Verizon and Google about how to manage Internet traffic is nothing more than a private agreement between two corporate behemoths, and should not be a template or basis for either Congressional or FCC action,” Public Knowledge said. “It is unenforceable, and does almost nothing to preserve an open Internet. ... The public outrage to the initial reports of this agreement should be a sign to the FCC and Congress -- the public wants the FCC to protect an open Internet and ensure that the next Google, the next Facebook, the next Twitter and the next Wikipedia can succeed."

"Google, a company that I've long admired and currently hold thousands of dollars of stock in, just ‘went evil,'” said Adam Green, co-founder of the Progressive Change Campaign Committee.

"The idea here is for this proposal to follow a consumer-driven orientation,” said Verizon CEO Ivan Seidenberg in a call with reporters Monday. “Google is, if not the leading company, certainly one of the leading companies in the world that represent what consumers expect of a robust, vibrant Internet. We want to follow suit and demonstrate that, from our perspective ... our company will continue to follow the principles outlined in this proposal to make sure ... customers get the best experience possible."

Google and Verizon posted on their public policy websites a statement defending the proposal. “For the first time, 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,” they said. “Importantly, this new nondiscrimination principle includes a presumption against prioritization of Internet traffic -- including paid prioritization. So, in addition to not blocking or degrading of Internet content and applications, wireline broadband providers also could not favor particular Internet traffic over other traffic."

The proposal also would “create enforceable transparency rules” and eliminate confusion stemming from the Comcast decision, the companies said. “We believe this policy framework properly empowers consumers and gives the FCC a role carefully tailored for the new world of broadband, while also allowing broadband providers the flexibility to manage their networks and provide new types of online services. Ultimately, we think this proposal provides the certainty that allows both web startups to bring their novel ideas to users, and broadband providers to invest in their networks."

AT&T spokeswoman Claudia Jones said her company wasn’t a party to the agreement but would look at it closely. “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."

Thomas Lenard, president of the Technology Policy Institute, said the agreement is a “serious and constructive effort to address the policy impasse that the FCC has created for itself."

"We don’t believe the Verizon-Google proposal in itself will be enough to convince FCC Chairman Genachowski to definitively back off possible Title II broadband reclassification, as we believe he is looking for greater network neutrality safety safeguards and a broader agreement among parties,” Stifel Nicolaus said in a research report. “We have heard some talk that the FCC might try to reclassify but delay implementation for some period of time in order to give lawmakers an opportunity to pass targeted legislation that would clarify network neutrality safeguards and the FCC’s authority to enforce them. ... We believe the FCC chairman and others will likely demand that wireless be covered by a network neutrality framework in some way, and that the details of managed/specialized services be nailed down in a way to ensure those services do not become an exception that swallows a general prohibition or presumption against prioritization of the best-efforts public Internet.”