Google, Verizon Shake Hands on Plan Threatening Net Neutrality

Updated: Would create “two” internets, one public and one that would charge extra for higher-priority services, which could include better-quality movie downloads

Updated:

Google and Verizon on Monday formally announced a joint agreement on handling internet content that would severely impact net neutrality.

As reported on TheWrap last week, the agreement could lead to movie studios being charged extra if they want to deliver high-quality downloads of films over the web.

Google CEO Eric Schmidt and Verizon CEO Ivan Seidenberg made the announcement in a call with the media. They suggested the plan would ensure freedom of choice for consumers but also let internet service providers attract the investment needed to expand and improve the speed of internet connections.

Hoping to calm fears that there was an actual deal in place between the two major players — and that it would doom net neutrality — Schmidt said that the plan is intended to set aside “a very divisive debate.”

“There is no business arrangement," he said. "Not a deal. This is a joint policy announcement,” he said.

The proposal, which the CEOs said would be offered to the Federal Communications Commission and Congress, preserves the openness of the internet, Seidenberg said. “There is no paid prioritization over the [existing] internet,” he said.

As presented by the two CEOs, the plan offers a plan for wired connections and then one for mobile connections.

(Read the whole agreement here.)

On wired connections, it anticipates “two” internets — one free of discrimination and then a second private network where content providers could be charged for higher-quality priority services. The FCC would ensure that no discrimination takes place on the public internet.

Seidenberg described the private network as being for “other services that could be built in addition to those that ride the public internet” and specifically mentioned entertainment and medical monitoring as possible users. He suggesting at one point that it could be used to provide 3D films or TV programming.

“Examples of this could be very high sophisticated health-care monitoring services, smart grid services, super advanced educational services or even entertainment services,” he said. The services, he said, would be “distinguishable” from traditional internet services.

There would be no similar guarantee of non-discrimination on mobile networks. Instead, internet service providers would just have to be transparent about what they were doing.

The plan would also block the FCC from reclassifying internet connections as phone services and starting to regulate internet service providers.

As for the marriage of the two companies, it should be mentioned that Verizon sells several phones which are powered by Google's Android software. That put Google, in pushing for net neutrality, in the position of fighting a big customer. Additionally, the deal would appear to prevent Google's browser, its search business or its other products from being disadvantaged for normal web traffic.

Consumer groups immediately ripped the proposal in statements.

“The agreement between Verizon and Google about how to manage internet traffic is nothing more than a private agreement between two corporate behemoths, and should not be a template or basis for either Congressional or FCC action,” said Gigi B. Sohn,  president and co-founder of Public Knowledge.

“It is unenforceable, and does almost nothing to preserve an open Internet. Most critically, it sacrifices the future of the mobile wireless Internet as this platform becomes more central to the lives of all Americans.”

Free Press Political Adviser Joel Kelsey said that the companies can call the proposal a reasonable step forward, “but the simple fact is this framework, if embraced by Congress and the Federal Communications Commission, would transform the free and open Internet into a closed platform like cable television.

“This is much worse than a business arrangement between two companies. It's a signed-sealed-and-delivered policy framework with giant loopholes that blesses the carving up of the internet for a few deep-pocketed Internet companies and carriers.”

Supporters of net neutrality, among them the Writers Guild of America East, denounced the agreement when it first came to light last week, suggesting it smacks of big internet companies carving up the internet. 

The Writers Guild of America East also condemned the proposal in a statement from President Michael Winship and Executive Director Lowell Peterson:
 
“While the Writers Guild of America, East, AFL-CIO, usually takes pride in celebrating creativity, we must condemn the creative magic by which Verizon and Google have split the online world into  the 'public Internet' and 'additional differentiated online services.' This semantic sleight-of-hand seeks to prioritize online content, granting privilege and advantage to those content creators with deeper pockets who would like nothing better than to destroy the concept of net neutrality."