We’ll have to wait and see what emerges from the reported discussions between Verizon and Google. However prospect of a patchwork of agreements between large internet companies and ISPs like Verizon over web traffic is highly undesirable. (See update below.)
The private Google-Verizon talks are an apparent response to the slow pace of progress on “net neutrality” discussions at the FCC, according to the New York Times and Bloomberg. The FCC and large internet companies want to ensure that online content is not selectively discriminated against (“throttled”) while ISPs want unregulated freedom to manage their networks.
The Times reports that “the compromise as described would restrict Verizon from selectively slowing Internet content that travels over its wires, but wouldn’t apply such limits to Internet use on mobile phones, according to the people, who spoke yesterday and asked not to be identified before an announcement.” The Times is also reporting that guaranteed access to the fastest lane by services such as YouTube would cost Google money:
[The potential Google-Verizon agreement] could allow Verizon to speed some online content to Internet users more quickly if the content’s creators are willing to pay for the privilege.
The charges could be paid by companies, like YouTube, owned by Google, for example, to Verizon, one of the nation’s leading Internet service providers, to ensure that its content received priority as it made its way to consumers. The agreement could eventually lead to higher charges for Internet users.
It’s important to be cautious about drawing conclusions before the facts come out. But the prospect of ISPs being permitted to discriminate in favor of some content and companies that pay them is bad all the way around: bad for startups and smaller companies and very bad for consumers. It would represent a kind of internet “payola.”
The problem surrounding net neutrality negotiations stems from the fact that Comcast successfully sued the Federal Communications Commission in 2008 over an order preventing Comcast from blocking and throttling traffic from P2P networks. The FCC sought to punish Comcast with sanctions and prevent this type of activity among ISPs in general. Comcast filed suit in 2008 in response, arguing that the FCC had no legal authority to regulate its manipulation or control of traffic — and won.
Now there’s something of a legal vacuum as the FCC tries to figure out how to set national broadband policy.
The FCC has been holding talks among the big ISPs and internet companies but those negotiations have yet to produce any results — largely because the FCC is now less threatening — hence the private discussions between Google and Verizon. Those talks have also partly occurred because the two companies are now close collaborators in Android. Previously they were very public rivals.
Consumers already pay relatively high fees for broadband internet access and the idea that private “toll road” agreements would ultimately result in even higher consumer fees is unacceptable.
Beyond this, according to the Bloomberg story, any private toll agreements wouldn’t extend to mobile internet access. Again it’s all speculation right now. Meanwhile the FCC is scrambling to figure out how to reassert its authority over the ISPs.
Despite the Google-Verizon discussions, my guess is that a patchwork of private, variable agreements is probably not going to be the outcome of this process.
Recognizing the competitive significance of the internet for US business and the centrality of the internet now to consumer decision-making, Congress is probably ultimately going to ensure that rules providing uniform treatment of content are in place. But legislators are clearly open to lobbying and influence.
So while we’re likely to have uniformity the rules that emerge might not be favorable to consumers. But if markets and competition are working — and that’s a big “if” — ISPs in the end won’t be in a position to manipulate traffic or “jack” consumer fees, because cheaper and more transparent providers will be out there.
Postscript: Google has formally denied these accounts, telling the Guardian (UK):
“The New York Times is quite simply wrong. We have not had any conversations with Verizon about paying for carriage of Google traffic. We remain as committed as we always have been to an open internet.”
The publication also quoted a Verizon statement, similarly denying the existence of a deal:
“The NYT article regarding conversations between Google and Verizon is mistaken. It fundamentally misunderstands our purpose. As we said in our earlier FCC filing, our goal is an internet policy framework that ensures openness and accountability, and incorporates specific FCC authority, while maintaining investment and innovation. To suggest this is a business arrangement between our companies is entirely incorrect.”