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  • A Google-Verizon Truce On Internet Regulation?

    Google and Verizon, two of the leading antagonists in the long-running drama over FCC net neutrality regulation, may be about to call a truce.   According to numerous media reports, the two firms have or will soon agree to a compromise framework for regulation, which would provide for a limited degree of regulation by the FCC.

    The exact provisions of the compromise are unclear.   Reportedly, however, the plan would ban Internet access providers such as Verizon from blocking content outright, while allowing them to offer prioritized service for a fee.   The provisions would not apply to wireless Internet access, which would be kept mostly free of regulation.

    While Google and Verizon have long been adversaries on this issue, it’s been no secret that the two have been working together to craft out common ground.   The two in fact, filed joint comments in the FCC’s rulemaking on the issue earlier this year, and the CEOs of the two firms even jointly authored a Wall Street Journal op-ed on broadband policy.

    The incentives for both are clear.   With federal courts earlier this year rebuffing the FCC’s attempts to impose regulation, it was no doubt clear to Google that nothing could happen without a compromise.   Moreover, the “big is bad” tenor of the debate no doubt gave Google – one of the largest firms in our galaxy – reason to rethink.   For Verizon, a deal would provide some policy certainty, which is much-needed given the vast investments in broadband it is making.  And since the firm has always disavowed any desire to block wireline content, the new rules would come at little apparent cost.

    For many die-hard neutrality regulation purists, the reported deal was seen as a Category 5 catastrophe.   “Google Decides It Can Be Evil,” read one post on the Daily Kos.   “The End of the Internet as We Know It,” wrote Josh Silver of Free Press, a pro-regulation activist group.

    But the despair on the left doesn’t necessarily mean this is a big victory for the free market.  Far from it.   For starters, the plan would give the FCC clear authority – which it does not now have – to oversee Internet service.   Even if this were limited to outright blocking of content and not other form of network management, there is reason for concern.   In 2008, remember, the FCC found Comcast liable for “blocking” BitTorrent traffic, even though that blocking was incidental and temporary.

    Secondly, it is unclear how an exemption for wireless service would be crafted.  But such mode-specific rules tend not to cope well in the ever-changing wireless world. It may seem easy today to differentiate the two, but what happens in the future?  Most “wireless” traffic even today travel by wire as least some part of the way.  What happens if the two are intermixed further?  Does it matter if the services are marketed together?  Or if the distinction is made invisible to the user?

    Regardless, whatever, if anything is eventually agreed to by Google and Verizon, it is unlikely that the long-running net neutrality show will end anytime soon.   Over the past few weeks, FCC chairman Julius Genachowski has been facilitating talks among a broader group of interested parties on net neutrality.   There’s no reason to believe that an agreement between Google and Verizon would be accepted by that broader group, at least not without considerable changes.  AT&T, for instance, has already made it clear that it is not a party to any deal.   In addition, it’s nearly certain that any plan would have to be approved by Congress, which in the past has been a virtual black hole for telecommunications reform proposals.

    The lawyers and lobbyists who have built their careers out of working this issue can rest easy.   For good or bad, the net neutrality debate is not ending anytime soon.

    Posted in Economics [slideshow_deploy]

    4 Responses to A Google-Verizon Truce On Internet Regulation?

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    3. Monica says:

      All for money.

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