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Google and Verizon Unveil Net Policy Proposal

Google and Verizon have unveiled a proposed legislative framework to deal with the sticky issue of “net neutrality,” in an effort to make a “constructive contribution” to how broadband and mobile services should be regulated to ensure both freedom for consumers and provide incentive for investors and communications operators to lay down broadband infrastructure. In a nutshell, Google and Verizon would like to see the FCC’s “four principles” of openness—essentially that consumers should be able to access any lawful content or service from any lawful device—enshrined as law, removing any doubt about their enforceability in the wake of Comcast’s recent court victory against the FCC. The proposal would also prohibit paid prioritization of traffic, meaning broadband operators would be barred from granting preferential treatment to particular applications or service, such as those willing to pay for better performance. However, Google and Verizon’s framework would not apply most of those principles to mobile broadband, and also leaves way for broadband operators to create and roll out unspecified “differentiated services” in addition to Internet access and video services…and providers would be able to prioritize traffic on those services however they like.

“It is imperative that we find ways to protect the future openness of the Internet and encourage the rapid deployment of broadband,” Google’s director of public policy Alan Davidson and Verizon’s executive VP of public affairs wrote in a joint statement. “Crafting a compromise proposal has not been an easy process, and we have certainly had our differences along the way. But what has kept us moving forward is our mutual interest in a healthy and growing Internet that can continue to be a laboratory for innovation.”

Google and Verizon’s proposal breaks down into seven primarily provisions:

  1. The FCC’s “four principles” of openness—as outlined in a 2005 Internet Policy Statement (PDF) should be made enforceable as a matter of law.
  2. A new principle of openness should prohibit prioritization of Internet traffic “in a way that causes harm to consumers of competition.”
  3. Both wireless and wireline services should be subject to enforceable transparency rules, including complete information about services, capabilities, and fees.
  4. The FCC’s authority in the broadband arena should be clearly defined, and enforcement of broadband regulations should be handled by a complaint-driven process that can carry penalties of up to $2 million.
  5. Providers may create new, differentiated managed services in addition to Internet and video services. Examples given include health care monitoring, gaming, smart grid, and advanced educational services. These managed services could not be used to “circumvent the rules,” but would not be subject to openness principles.
  6. Aside from the transparency provision, above, mobile services would not be subject to openness principles. That means mobile operators could charge for traffic prioritization and arbitrarily bar (or degrade) unwanted applications or services, so long as they told everyone what they were doing. Congress would receive an annual report on consumers were being adequately protected in the wireless marketplace.
  7. The Federal Universal Service Fund would be redefined to support nationwide broadband access in addition to telephone service.

Google and Verizon’s policy proposal comes just after the FCC shut down closed-door hearings regarding network neutrality—a process that has been underway for about a year and that is widely believed to have been undercut by Google’s and Verizon’s ex parte framework. Industry reports also point to disagreements on how to handle wireless services as a major reason for the talks breaking down.

Public interest groups have wasted no time decrying the proposed framework.

“If codified, this arrangement [..] will lead to outright blocking of applications and content on increasingly popular wireless platforms,” wrote Free Press political advisor Joel Kelsey, in a statement. “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. Still worse, this deal proposes to keep the FCC from making rules at all.”

Some industry watchers speculate that the FCC is unlikely to throw its weight behind a policy proposal that omits mobile broadband services from openness requirements and enables providers to create largely unregulated premium services running alongside the public Internet. However, the FCC is not the target of Google and Verizon’s proposal: Congress is. Whatever Congress decides to enact into law—if anything—the FCC will be tasked to enforce.

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