Tuesday, August 10, 2010

Google and Verizon propose net neutrality legislation

MELBOURNE, AUSTRALIA: Google and Verizon announced on Monday that they were putting forward a proposal for legislation which would deal with the issue of net neutrality.

The proposal would give the FCC clear authority to regulate wireline net neutrality while exempting wireless from all but the transparency requirements applied to wireline. However, it also leaves Verizon and other carriers a major loophole for as yet undefined services which would be exempt from many of the requirements, Ovum’s Chief Telecoms Analyst Jan Dawson believes.

“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 rumors and the accusations lobbed at Google were untrue, and it should get some credit for standing firm on the prioritization issue in particular. However, the proposed legislation leaves a major loophole in the form of the category of 'additional, differentiated services' which would be exempt from most of the requirements.

“In essence, this category creates a sort of private Internet which wouldn't be subject to most of new rules. As currently described, the category is wide enough to capture almost anything, and it needs to be significantly tightened in order to be meaningful. However, if this category is clarified and the definition tightened, this may be just the sort of compromise the FCC needs to get the stalled talks back on track, and finally make some progress in this area,” added Dawson.

Surprising bedfellows produce a reasonable compromise
Google and Verizon, which theoretically at least come from opposite sides of the net neutrality debate, have come together to propose legislation which would give the FCC clear authority to enforce certain key net neutrality principles.

Specifically, the legislation would allow the FCC to prevent discriminatory behavior and the blocking of services and applications consumers want to access, forbid prioritization of services or traffic on the public Internet, enforce transparency over services offered and network management, and give the FCC enforcement authority with hefty fines. It would, however, exempt a vague category of ‘additional, differentiated services’ from most of these rules, and would also exempt wireless services from all but the transparency requirement.

Verizon and Google have here done what the FCC failed to do with a much larger number of interested parties: forge a reasonable compromise between the two sides in this debate. Cynics will point out that Verizon and Google are pretty friendly these days as business partners in rolling out Android devices on Verizon’s network, but this compromise includes real concessions from Verizon.

Verizon will submit to significant additional scrutiny over the management of its network, will forgo paid prioritization of content on the public Internet, and will guarantee open access to all content and services consumers want to access.

Google, on the other hand, has made few compromises here, getting most of what it always said it wanted. The agreement directly contradicts many of last week’s news stories about the talks between the two companies in that it explicitly rules out paid prioritization. Google should get some credit for standing firm on this and other issues in the face of a great deal of recent criticism that it had abandoned its “don’t be evil” motto.

Additional services category is a major loophole
The major loophole in the proposal, however, is the ‘additional, differentiated online services’ category it mentions. 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. Interestingly, during the conference call announcing the agreement, Google CEO Eric Schmidt repeatedly said that Google would not make use of this channel.

The only real example of this sort of service cited is Verizon’s FiOS TV, which presently runs essentially on a parallel channel on Verizon’s fiber 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.

The FCC will now have to gather the key stakeholders together once again to confer on whether they find the Verizon / Google proposal acceptable, or whether a revised version might form the basis of an agreement. It has no legal force at present, and parties on both sides of the debate may find it objectionable. But, with the previous set of talks abandoned without any meaningful progress, the FCC should latch onto this compromise as a key plank of its net neutrality strategy. With some tweaks, it may well turn out to be just the sort of compromise the FCC has been looking for.

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