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Google and Verizon Push Tiered Broadband Services

Google and Verizon this week issued a statement on United States broadband policy, describing an approach that would permit differentiated services and assign a hands-off regulatory role to the Federal Communications Commission (FCC).

The statement by the two companies was characterized by Eric Schmidt, Google's CEO, as "a joint policy announcement" and not a deal between Verizon and Google, according to a press conference transcript recorded by The New York Times. Last week, both The Times and The Wall Street Journal carried stories suggesting that Google and Verizon planned to advocate against "net neutrality" and for tiered broadband services.

The idea behind the tiered broadband services claim was that the two companies would advocate for public access to the Internet, but that the content would be available at different speeds and different subscription rates.

Google subsequently issued a denial of sorts to some news outlets, such as PCMag.com, although it now seems clear that The Times' reporting was correct. Google and Verizon are indeed proposing tiered broadband Web access.

Google and Verizon's Plan for the United States
The Google-Verizon statement is contained in a two-page document that Google's blog described as a "suggested legislative framework for consideration by lawmakers." This framework contains nine points for wireline broadband (but not wireless broadband), including a proposal for "additional online services." Internet service providers (ISPs) would be able to prioritize traffic for these additional online services.

"Such other services would have to be distinguishable in scope and purpose from broadband Internet access service, but could make use of or access Internet content, applications or services and could include traffic prioritization," the document states.

The document includes a nuanced--and even contradictory--statement about traffic prioritization by ISPs: "Prioritization of Internet traffic would be presumed inconsistent with the non-discrimination standard, but the presumption could be rebutted." In addition, ISPs are permitted to manage their networks, and that includes the ability "to prioritize general classes or types of Internet traffic, based on latency."

While this latter statement may apply to voice services, which have acute latency management issues, it could also apply to bandwidth-eating services such as BitTorrent. A federal appeals court ruling on Comcast's suppression of the BitTorrent service has put the FCC in limbo. The court ruled that the FCC didn't have oversight over an "information service" such as the Internet.

The FCC is chartered to oversee "communications services," such as the public switched telephone network. However, the Internet was reclassified by the 1996 Telecommunications Act as an information service. As such, the court ruled that it remains outside the FCC's purview.

The Comcast court ruling threatens the FCC's National Broadband Plan to ensure that all parts of the country have access to high-speed Internet service, as mandated by Congress. Google and Verizon, in their document, both affirm that they see the FCC as lacking this regulatory authority. Instead, they propose "non-governmental dispute resolution processes," created by a group of technical experts, to adjudicate any public disputes. Fines would be limited to $2 million maximum.

United States Falling Behind on Broadband Services
Last week, the FCC has issued a Notice of Inquiry (PDF) seeking guidance on broadband policy. This Notice cites an earlier report indicating that the country lags in delivering broadband services.

"In the 2010 Sixth Broadband Deployment Report, the Commission found that approximately 14 [million] to 24 million Americans remain without broadband access capable of originating and receiving high-quality voice, data, graphics, and video telecommunications and that, absent changes in policy, those Americans will not gain such access in the near future," the Notice states. "The Commission therefore concluded that broadband deployment to all Americans was not reasonable and timely."

The United States, according to some estimates, is 16th or 17th in the world in terms of broadband penetration. However, U.S. subscribers also pay far more than other countries' residents to get lower bit rates.

Google-Verizon Pact Condemned
While the FCC has its own version of net neutrality, most of the advocacy on this issue has come from various public interest groups, such as Common Cause, Free Press, and many others. Those groups have generally condemned the proposal by Google and Verizon.

The Free Press issued a public statement saying that the two companies were planning net neutrality only for that portion of the Internet where they don't plan to put their investment dollars. The policy would lead to blocking applications "just as Comcast did with BitTorrent." It would create "new private fast lanes for the big players while leaving the little guy stranded on a winding dirt road," the statement added.

"Worse still, this pact would turn the Federal Communications Commission into a toothless watchdog, left fruitlessly chasing complaints and unable to make rules of its own," the Free Press statement added.

In a blog post announcing the policy, Google described net neutrality as a "thorny issue" and described the Verizon-Google statement as a "principled compromise." Earlier, Google's CEO provided his own definition of net neutrality.

"People get confused about Net neutrality," Schmidt told CNet last week. "I want to make sure that everybody understands what we mean about it. What we mean is that if you have one data type, like video, you don't discriminate against one person's video in favor of another."

That definition partly agrees with a definition of net neutrality by Common Cause, except that the public advocacy organization warns that ISPs could ignore net neutrality principles by creating a "two-tier Internet" with fast lanes and slow lanes. And that appears to be what Google and Verizon are proposing.

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