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August 9, 2010

Both Google and Verizon Wireless are challenging a story published by the New York Times that suggests the two companies have negotiated a deal that would force mobile users to pay certain fees to get Internet content at a faster rate on their MIDs (mobile Internet devices).

The New York Times said the deal could result in 'tiered charges' for Web access, under which ISPs would force users to pay higher fees for faster speeds.

Such a deal would fly in the face of net neutrality, under which all Internet content is treated equally and with no expections.

Verizon said the article "fundamentally misunderstands our purpose. As we said in our earlier FCC filing, our goal is an Internet policy framework that ensures full openness and complete accountability at all times, and further incorporates specific FCC authority, while maintaining investment and innovation. To suggest this is a business arrangement between our companies is entirely incorrect."

Verizon and Google flatly denied the story in separate statements issued Thursday. Google's public policy blog stated on Twitter that "The New York Times is wrong. We didn't have any conversations with Verizon about paying for carriage of our traffic in any way, shape or form. We remain fully committed to an open Internet and we will make sure that it stays that way."

The story broke late Friday after its was announced that the FCC had ended a round of closed-door discussions with companies, including Google and Verizon Wireless, on Web regulation and Internet content after it failed to produce a way forward on net neutrality issues.

FCC Chief of Staff Edward Lazarus said the stakeholder discussions had "been productive on several fronts, but have not generated a robust framework to preserve the openness and freedom of the Internet, at least not yet, and could be one that drives innovation, investment, free speech and consumer choice."

Lazarus added "All options still remain on the table at this time, as we continue to seek broader input on this vital problem of net neutrality as it concerns all of us."

The meetings were part of the FCC's ongoing efforts to enforce net neutrality regulations in the wake of the Comcast decision. The regulations are a key interest to mobile operators of both cable and wireless networks.

The regulations could potentially undermine wireless operators' ability to manage their networks, particularly with heavy data users who pose a threat to network performance and overall reliability.

In July, Congress said it was mulling over new rules towards wireless spectrum utilization that could impact all mobile operators if it goes into law.

Senators Olympia Snowe (R-Maine) and John Kerry (D-Massachussets) will soon introduce the Spectrum Measurement and Policy Reform Act, a proposed new legislation aimed at modernizing radio spectrum planning in the United States. It could also affect the management and some spectrum coordination activities at the FCC.

Snowe and Kerry, senior members of the Senate Committee on Commerce, Science and Transportation and longtime supporters of wireless spectrum reform, designed the proposed new legislation to complement the FCC's National Broadband Plan.

According to a press release, the new legislation would create a mandate for a full spectrum inventory.

The new bill would also require greater collaboration between the FCC and the NTIA (National Telecommunications and Information Administration) on spectrum policy and management related issues, implementation of wireless spectrum sharing and reuse programs, as well as more market-based incentives to promote efficient spectrum use.

The proposed new legislation would also set a deadline for the creation of the National Strategic Spectrum Plan, which will provide a long-term vision for domestic spectrum use and strategies in the U.S.

Snowe said in a statement "This legislation will lay the groundwork to develop a strong and effective 21st century comprehensive spectrum policy that will provide wireless users with additional choices, greater innovation, lower prices and more reliable services."

"Our nation's airwaves are not unlimited resources, and we need to use them as efficiently as possible," Kerry added.

Last month, the Democratic majority voted in favor of an NOI (Notice of Inquiry). Initial comments are due July 15 and reply comments are due Aug. 12th.

The NOI asks for comments on whether the FCC should continue to regulate broadband under Title 1 regulations.

Whether the agency should pursue Title 2 authority, a light regulatory touch often referred to as the “third way” or any other ideas of how to regulate broadband Internet.

FCC commissioner Mygnon Clyburn, in voting for the NOI, said wireless services are subject to a nearly identical set of regulations similar to the “third way” proposal and has thrived under a parallel paradigm.

But others disagree.

Commissioner Meredith Attwell Baker dissented on the NOI, saying that even initiating the proceeding creates significant consequences. “This is the rare case where opening a proceeding creates so much regulatory uncertainty” that it harms investment potential, she said.

Furthermore, Baker said she is worried that the outcome of the NOI has been pre-judged and citing the following statements: The NOI comes as the result of the U.S. Court of Appeals' ruling in April that the FCC lacked the authority to demand that Internet service providers like Comcast have to offer equal access to anyone who wants to connect to their network.

The case dates back over three years ago, when Comcast started blocking some peer-to-peer networking applications that it said consumed too much network bandwidth.

Some opponents believed Comcast was degrading traffic in 2007 from BitTorrent because it competed against Comcast's on-demand video offering.

Two net-neutrality proponents, Public Knowledge and Free Press, complained to the FCC that the ISP shouldn't be able to decide which applications should run on the network.

Comcast later complied with the FCC recommendations but pursued the case in court.

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Source: Verizon Wireless and Google.