UPDATE: Google, Verizon make net neutrality proposal

The recommendations would allow the FCC to fine broadband providers up to $2 million.

Google and Verizon Communications have released a proposal that would give the U.S. Federal Communications Commission limited power to enforce network neutrality rules, including levying fines up to US$2 million for violations by broadband providers.

Officials from the two companies, in an announcement Monday, said they hope to move the often-contentious net neutrality debate ahead with the recommendations. Under the proposal, broadband providers could not block or degrade Web traffic, although they could provide "differentiated online" services apart from the public Internet.

The proposal prohibits providers 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." Prioritization of Internet traffic would be presumed as discriminatory, but broadband providers would have an opportunity to rebut that.

The proposal applies to the wired Internet, not wireless broadband, the companies said. The wireless broadband market is "still nascent," the companies said in a joint blog post. "We both recognize that wireless broadband is different from the traditional wireline world, in part because the mobile marketplace is more competitive and changing rapidly," the blog post said.

Under the proposal, the FCC would have authority to enforce existing net neutrality principles, but it would not have the power to create new rules, as the agency's chairman, Julius Genachowski , has proposed. The FCC would handle net neutrality complaints on a case-by-case basis, after the parties in a dispute attempt to resolve their differences through Internet community governance organizations.

The FCC would be "directed to give appropriate deference to decisions or advisory opinions of such groups," the policy proposal said.

An FCC spokeswoman didn't immediately respond to a request for comment.

The proposal would also require broadband providers to be transparent about the services and speeds they offer.

The announcement comes after days of rumors and news reports that the two companies had reached an agreement on how Verizon would handle Google's traffic. But the proposal is a set of recommendations to U.S. policymakers and broadband providers, and the proposal would not allow for any prioritization of Google's traffic on the public Internet, said Ivan Seidenberg, Verizon's chairman and CEO.

"There is no business arrangement, and reports that there was a business relationship are false, misleading and not correct," said Eric Schmidt, Google's chairman and CEO.

Under net neutrality, or open Internet, rules, broadband providers would be prohibited from selectively blocking or slowing Web traffic.

"The original architects of the Internet got the big things right," said Alan Davidson, Google's director of public policy, and Tom Tauke, Verizon's executive vice president of public affairs, policy, and communications, in a blog post. "By making the network open, they enabled the greatest exchange of ideas in history. By making the Internet scalable, they enabled explosive innovation in the infrastructure."

The proposal is an effort to "find ways to protect the future openness of the Internet and encourage the rapid deployment of broadband," Davidson and Tauke wrote.

Public Knowledge and Free Press, two digital rights groups pushing for formal net neutrality rules at the FCC, ripped the proposal, saying it does not go far enough to protect an open Internet.

"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, president of Public Knowledge, said in a statement. "It is unenforceable, and does almost nothing to preserve an open Internet."

The proposal would allow wireless broadband providers to lock any application, content or service so long as they told consumers they were doing so," Sohn added.

Sohn and Free Press political adviser Joel Kelsey both complained that the agreement would allow broadband providers to offer managed services exempt from net neutrality rules.

"It is conceivable under the agreement that a network provider could devote 90 percent of its broadband capacity to these priority services and 10 percent to the best efforts Internet," Sohn said. "If managed services are allowed to cannibalize the best efforts Internet, whatever protections are agreed to for the latter become, for all intents and purposes, meaningless."

The agreement is "much worse" than a business arrangement between the two companies, as was rumored, Kelsey added.

"Google and Verizon can try all they want to disguise this deal as a reasonable path forward, but the simple fact is this framework, if embraced by Congress and the Federal Communications Commission, would transform the free and open Internet into a closed platform like cable television," he said. "It's a signed-sealed-and-delivered policy framework that blesses the carving up of the Internet for the few deep-pocketed Internet companies and carriers."

Schmidt downplayed concerns that the proposal would allow broadband providers to move most of their investment to private managed services. "Verizon and others have a large financial incentive to make the public Internet more useful, simply because that's what their customers want," he said. "If they were to choose to degrade it, other competitors would enter the market."

Officials from Verizon and Google said the proposal is an effort to move forward on an often-contentious debate over net neutrality in recent years. The two companies want to ensure the growth of the Internet, Seidenberg said.

"This is a real step forward, in my view," Schmidt said. "If it's implemented broadly across the Internet, and we hope it will be, it could materially affect quality of service and openness for literally all the citizens of the United States."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantusG. Grant's e-mail address is grant_gross@idg.com.

Copyright © 2010 IDG Communications, Inc.

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