U.S. Ends Private Talks on Web Rules

Net Neutrality
By AMY SCHATZ | AUGUST 6, 2010

WASHINGTON—U.S. officials called off closed-door talks with lobbyists aimed at reaching a compromise on ways to regulate Internet traffic, saying they couldn't reach a solution.

The meetings, which involved Internet and telecommunications giants, sought to give the Federal Communications Commission authority to act as an Internet traffic cop without the need to adopt controversial wholesale changes to the law.

The agency abandoned the talks a day after news reports that two participants, Verizon Communications Inc. and Google Inc., had reached a separate agreement on Internet traffic rules that would allow the phone giant to carry some broadband traffic at faster speeds.

People familiar with the situation said the talks were cut off abruptly. These people said FCC officials felt the Verizon-Google deal undermined their broader talks. The companies haven't publicly released the agreement.

At stake is how far the government can go to dictate the way Internet providers manage traffic on networks they have spent billions of dollars rolling out. The FCC has proposed s0-called net neutrality rules that would ensure carriers treat all content equally, and not slow or block access to websites.

Web companies like Google and Amazon.com Inc., which want to offer Web video and other high-bandwidth services, have called for the FCC to prevent broadband providers from blocking websites, or selectively delaying access.

Cable and phone companies fear further regulation would handcuff their ability to cope with the growing demand put on their networks and limit the prices they can charge businesses or consumers.

For the past six weeks, a small group of lobbyists for both sides had been meeting privately at the FCC trying to hammer out a compromise. Consumer groups have taken to Twitter and blogs in recent weeks to blast the FCC's chairman, Julius Genachowski, for sponsoring private meetings with industry lobbyists. They argued the meetings violated the spirit of the Obama administration's pledge to open up government to more transparency.

A group of angry representatives of public interest groups were meeting with Mr. Genachowski about the issue in an FCC conference room Thursday afternoon when his chief of staff entered and announced that they'd pulled the plug on the lobbyists' negotiations, according to people familiar with the situation.

FCC officials declined to comment on the Verizon-Google agreement but had signaled their displeasure. On Thursday morning, Mr. Genachowski told reporters that any deal on net neutrality "that does not preserve the freedom and openness of the Internet for consumers and entrepreneurs would be unacceptable."

While Verizon and Google designed their agreement as a model for lawmakers and regulators on net neutrality, it includes several provisions that Web start-ups and Internet activists might find unacceptable, including one that would let companies pay a premium for faster delivery speeds to consumers, according to people briefed on the plan.

The Verizon-Google deal also wouldn't apply to wireless networks, according to these people.
Net neutrality proponents blasted the Verizon-Google agreement, saying reports of its contents point to it undermining the concept of net neutrality.

"The potential deal between two broadband behemoths underscores the need for the FCC to act quickly to protect the free and open Internet," said Rep. Edward Markey (D., Mass.), a member of the House Energy and Commerce Committee. "In the absence of such action, it's increasingly clear that cozy cooperation between communications colossi will reign on the Internet."

Google and Verizon denied a news report that suggested their agreement represented a business deal in which Google would pay Verizon for faster delivery of its online content to Internet users.
The companies didn't deny that they have reached an agreement on net neutrality which they hope could be used as a model for future legislation or FCC rules.

"We remain as committed as we always have been to an open Internet," said Google spokeswoman Mistique Cano. "We have not had any conversations with Verizon about paying for carriage of Google or YouTube traffic." Google owns the Internet video site YouTube.

In a statement, Verizon didn't provide details but said the agreement aimed to create "an Internet policy framework that ensures openness and accountability, and incorporates specific FCC authority, while maintaining investment and innovation."