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August 10, 2010

If seven new principles proposed yesterday by Google and Verizon Wireless are adopted by the FCC, wireless broadband access in the U.S. would remain largely unregulated.

Essentially, the net-neutrality compromise offered by the two firms takes into account various government goals, but the newly proposed plan does reserve some yet-to-be-created services that would be treated differently if the plan is adopted.

Verizon and Google's proposal uses the competitive argument to urge wireless industry regulators to use a lighter touch in governing the mobile communications industry.

“We both recognize that wireless broadband is different from the traditional wireline world, in part because the mobile marketplace is a lot more competitive and changes so rapidly almost everyday. In recognition of the still-nascent nature of the wireless broadband marketplace, under this proposal we would not apply most of the wireline principles to wireless, except for the transparency requirement,” the statement read.

In May, the FCC ruled that the wireless industry wasn't competitive, instead finding it too concentrated.

The seven new principles proposed by Verizon Wireless and Google mostly relate to wireline broadband access, including a component that offers nondiscriminatory access to the Web.

“Importantly, this new nondiscrimination principle includes a presumption against prioritization of Internet traffic including paid prioritization. In addition to not blocking or degrading Internet content and applications, wireline broadband providers also could not favor particular Internet traffic over other traffic,” according to Google's public policy blog.

If the seven proposed principles are accepted, it would help 'put to bed' the never-ending net neutrality conflict that has been discussed so much in the past two years, especially as it relates to all wireless communications.

At the very heart of the proposal is to allow ISPs and broadband providers to develop new services with their backbone partners, and presumably treat those services differently. Google said some services could include health care monitoring and smart-grid services.

Verizon and Google made media headlines yesterday when it was reported that the two had reached an agreement on net neutrality. At the time the two companies denied any such agreement, and later noted this is a joint proposal and not a done deal. But somehow, some in the media interpreted this as a done deal, hence all the confusion.

As a result, public-interest groups were quick to denounce the effort, noting that these managed services could take up all of the network traffic.

“The agreement between Google and Verizon Wireless about how to manage Internet traffic is nothing more than a private agreement between two large companies and should not be a template or basis for either Congressional or FCC action. It is unenforceable, and does almost nothing to preserve an open Internet,” said Gigi Sohn, president and co-founder of Public Knowledge.

“It sacrifices the future of the mobile wireless Internet as this platform becomes more central to the lives of all Americans. Under the Verizon-Google definition of net neutrality, wireless companies would only have to be transparent about their network practices, meaning that they could block any application, content or service so long as they told consumers they were doing so," added Sohn.

"While there would be no charges for priority on the best efforts Internet, there are almost no limits on so-called managed services, other than that they would need to be distinguishable in purpose and scope, from the Internet. Thus, it is conceivable under the agreement that a network provider could devote 90 to 95 percent of its broadband capacity to these priority services and just 5 or 10 percent to the best efforts Internet", said Sohn.

FCC Commissioner Michael Copps said it is time for the FCC to make a decision on net-neutrality rules.

“Some will claim this announcement moves the discussion forward. That's one of its many problems. It is time to move a forward decision to reassert FCC authority over broadband telecommunications, to guarantee an open Internet now and forever, and to put the interests of wireless users in front of the interests of big companies,” said Copps.

In the past, the mobile industry has lobbied strong against net neutrality regulation on the grounds that mobile and wireless networks are fundamentally different from wired networks because they depend on a limited resource – spectrum – to provide enough bandwidth for mobile broadband users.

And it goes on to say "in particular, consumers should continue to have access to the information, products and services of their choice online, to better encourage investment in robust, advanced networks, and to protect and promote Internet openness."

Both Verizon and Google added that the FCC should examine specific market segments and technical factors before applying any general oversight or specific rule to wireless broadband networks.

In a letter sent to the FCC, CTIA President Steve Largent said that the agency's proposed new rules would "be incompatible with wireless broadband and are inappropriate for mobile broadband networks and unnecessary to ensure that wireless consumers continue to enjoy the open Internet."

For its part, Skype took a much more hardline approach to the FCC's regulation stance on wireless broadband, saying: "Some evidence suggests that wireless carriers and operators have the incentive and ability to harm innovation in the real-time communications application market, such as that made possible by Skype, either by outright blocking or more subtle forms of discrimination."

"Because these applications offer consumers additional choice and savings, they should not be delayed, obstructed or throttled by broadband access providers," a Skype spokesperson said.

So far, other wireless carriers and operators such as Sprint, Boost Mobile and MetroPCS haven't commented on the issue of net neutrality, but we will keep you posted.

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Source: Verizon Wireless and Google.