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Google Ready to Abandon Net Neutrality for Verizon Deal

As-yet unannounced deal could lead to movie studios being charged extra if they want to deliver better-quality movie downloads

On the issue of net neutrality, Google seems to have gone over to the Dark Side.

While the Federal Communications Commission continues to wrestle over the issue, Verizon and Google have reached a tentative deal on handling internet content that could lead to movie studios being charged extra if they want to deliver better-quality movie downloads, an individual familiar with the deal has told TheWrap.

The so-far unannounced agreement — potentially to be presented to legislators or the Federal Communications Commission as a model for legislation — essentially anticipates splitting internet connections into two. One would be for normal traffic and one for “managed services," an individual familiar with the deal told TheWrap.

For wired connections, normal traffic would compete much as it does today, with Verizon offering a voluntary guarantee not to favor big websites. In return, Verizon would be able to charge for higher priority traffic that could include medical uses, sports or gaming — or for some assurance that premium-priced, first-run movies aren't interrupted with constant blips or breaks.

For wireless connections, there would be no neutrality guarantee, and Verizon could charge websites individually for better service.

The agreement appears to abandon net neutrality principles that Google, among others, had been pushing.

Verizon, of course, 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.

There was no official word from either company Wednesday.

Meanwhile, Verizon said it is continuing to work with the FCC on developing an overall industry agreement that would hammer out an agreement on broadband policy issues.

“We've been working with Google for 10 months to reach an agreement on broadband policy,” said David Fish, a Verizon spokesperson. “We are currently engaged in and committed to the negotiation process led by the FCC.  We are optimistic this process will reach a consensus that can maintain an open Internet and the investment and innovation required to sustain it.”

Google spokesperson Mistique Cano declined comment.

FCC press secretary Jen Howard noted there has been no change in the discussions. “The broad stakeholder discussions continue to actively include Google and Verizon,” she said.

The agreement comes as the FCC readies to push forward with a plan to reclassify internet services as phone services, a plan that would allow it gain control of the net-neutrality issue after the courts ruled that by law it had no oversight of internet services.

Phone companies, cable providers and other internet service providers have vociferously opposed the FCC acting, arguing that action could threaten investment and growth of the internet. Meanwhile consumer groups and businesses including Google and Amazon have urged government action to impose net neutrality, warning that the internet’s future as a innovator could be threatened if service providers can unilaterally decide which content gets delivered faster.

Wednesday the consumer groups were irate about the reported agreement.

"What is good for Google and Verizon is not necessarily good for innovation and competition on the Internet,” said Andy Schwartzman, senior VP and policy director for the Media Access Project, in a statement.

“What the two companies have in common is that both are incumbents with dominant positions in their markets. It’s no wonder they are prepared to strike a deal that protects their market position at the detriment of the next Verizon and the next Google.”

Free Press president and CEO Josh Silver called the agreement, if true, “a bold grab for market power by two monopolistic players.

“Such abuse of the open Internet would put to final rest the Google mandate to ‘do no evil,’” he said.

Gigi B. Sohn, president and co-founder of Public Knowledge, called the deal “deeply regrettable” and warned that the agreement was meaningless because it is not legally binding.

“The fate of the Internet is too large a matter to be decided by negotiations involving two companies, even companies as big as Verizon and Google,” she said in a statement.

First reports of the agreement came from Bloomberg and the Washington Post.