Verizon, Google offer net neutrality pact that exempts wireless

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Verizon Communications (NYSE:VZ) and Google announced a joint public policy statement on net neutrality that forbids any kind of prioritization--including paid prioritization--of Internet traffic over wired networks, but does not apply to wireless networks.

Speaking on a conference call with the media, Verizon CEO Ivan Seidenberg and Google CEO Eric Schmidt addressed the speculation that erupted last week following press reports about an impending deal between the two companies. The two chief executives said their teaming is not a business deal but instead a public policy framework they hope other carriers and public interest groups will examine and endorse.

"Our basic goal is to set aside the very divisive debate that everyone is engaging in and instead recognize that we are extremely dependent upon each other," Schmidt said.

The companies' proposal outlines seven key elements, including that "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." The statement also calls for enforceable "transparency rules," for both wireline and wireless services. The pact calls for broadband providers to be required to give consumers "clear, understandable information about the services they offer and their capabilities." Under the proposal, the FCC would enforce the policies on a case-by-case basis, using a complaint-driven process, and could impose a penalty of up to $2 million on companies that disobey the rules.

Importantly, the proposal wouldn't apply to wireless because of mobile networks' architecture. The CTIA has argued numerous times that net neutrality should not apply to wireless networks, and the FCC's draft net neutrality rules were set to consider whether the regulations should apply to wireless. Another key aspect to the proposal is that the companies have called for "additional, differentiated online services," separate from the public Internet, to be allowed--such as health care monitoring, smart grid technology or new entertainment and gaming options. The companies said the FCC would also monitor the development of these services to ensure they don't interfere with the continued development of Internet access services.

The companies--which were initially on opposite sides of the issue but have since filed joint statements on the topic--are hoping the proposal will provide framework for an industrywide compromise on net neutrality. "There has been so much discussion and so much interest in this topic," Seidenberg said. "We feel that this debate has been somewhat hijacked by a lot of discussion and issues that are not really reflective of what the company is doing."

An FCC spokeswoman, Jen Howard, declined to comment on the proposal. Schmidt said the companies briefed FCC Chairman Julius Genachowski on the proposal.

The five-member commission, under Genachowski, has been working on a proposal to reclassify broadband as a Title II common-carrier service, which is seen as a key legal prerequisite for enacting net neutrality regulations. That proposal, which is opposed by the CTIA and the big telcos, has drawn fire from many in Congress, including many Democratic lawmakers, who want to move forward with net neutrality legislation instead.

Michael Copps, one of the FCC's three Democratic commissioners, criticized the Verizon/Google announcement. "Some will claim this announcement moves the discussion forward. That's one of its many problems," Copps said in a statement. "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 proposal was also criticized by Democratic lawmakers who support net neutrality.

Public interest groups that have fought for net neutrality rules also blasted the announcement. "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," Gigi Sohn, the president of Public Knowledge, said in a statement. "It is unenforceable, and does almost nothing to preserve an open Internet. Most critically, it sacrifices the future of the mobile wireless Internet as this platform becomes more central to the lives of all Americans."

 For more:
- see this NYT article
- see this Washington Post article
- see this Phone Scoop post
- see this Google public policy blog post
- see this WSJ live blog (sub. req.)
- see this NYT live blog
- see this Washington Post live blog

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