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Satellite TV provider Dish Network Corp. has said it was "100% behind" the FCC's proposal to move all broadband under the more stringently controlled Title 2 clause!
The two companies released a proposal stating that broadband providers shouldn't be able to discriminate against Internet content providers. But the plan provides benefits to both companies. Marcelo Prince and Amy Schatz discuss. Also, Dennis Berman discusses why bond investors are giving up on recovery and jobs as investment-grade yields fall to some of the lowest levels ever.
Google Inc. and Verizon Communications Inc. on Monday called on legislators to enact laws preventing Internet carriers from blocking websites or selectively delaying access to content common on the Internet today, while leaving the door open for private "specialized networks" down the line.
The proposal by the two companies, in the form of a suggested legislative framework, also said regulators should have authority to stop offenders by imposing penalties of up to $2 million on "bad actors."
In a significant exception, the principles wouldn't apply to Internet services provided over cellphone networks, in part, the companies said, because the mobile marketplace is more competitive and changing rapidly.
The policy framework marks a joint effort by the companies to move the discussion over "net neutrality" forward, as well as head off more rigorous restrictions by lawmakers or regulators.
While Verizon, one of the largest cellular and Internet providers, agreed to the basic principles, it left room to offer new "differentiated online services," ranging from health care to entertainment. Broadband providers could offer these for a fee—and they could prioritize traffic over these networks.
Critics said the proposal could result in the creation of private, closed broadband networks akin to cable television systems, as opposed to today's open Internet in which anyone can create a Web site or service.
Google Chief Executive Eric Schmidt, in noting that carriers and Internet companies depend on each other, said the agreement was designed to strike a balance over the thorny issue of network neutrality.
"We recognize we're extremely dependent on each other," Mr. Schmidt said in a press conference. He called the agreement "the next step" in clarifying the debate over net neutrality
Verizon CEO Ivan Seidenberg added, "We have one of the most vibrant industries going, and we want to make sure we don't…go backwards."
The proposal would effectively establish a baseline between current services and content, and innovative new services that have yet to be developed.
"For the first time, wire-line broadband providers would not be able to discriminate against or prioritize lawful Internet content, applications or services in a way that causes harm to users or competition," Google said in a blog post.
"This new nondiscrimination principle includes a presumption against prioritization of Internet traffic—including paid prioritization."
In agreeing to these principles, Mr. Schmidt said the carriers still would have a right to manage their network for practical needs, such as security or the integrity of the infrastructure.
Mr. Seidenberg characterized the management of the network as an "even treatment" that wouldn't target specific services or companies.
He added that the principles, which also includes more transparency, would be incorporated into the company's corporate practices.
Critics, however, believed the proposal would lead to the creation of many small, private networks.
"Google and Verizon can try all they want to disguise this deal as a reasonable path 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," said Joel Kelsey, adviser to media watchdog Free Press.
Some believe the incentive to provide more private networks would lead to less investment in the public Internet, but Mr. Seidenberg said Google has shown Verizon more ways to make money off of the public broadband business.
The lack of a mobile component in the proposal may be a stumbling block for the two companies. The FCC is seeking to extend its policy control over the mobile Internet as more data moves over wireless networks.
The Google-Verzion agreement was announced a week after reports that they had reached a pact on net neutrality that might undermine federal regulators' effort to dictate the way Internet providers manage traffic on networks they have spent billions of dollars to build.
Reports last week that the two companies had reached an agreement prompted the FCC to cancel talks aimed establishing net neutrality rules that would ensure carriers treat all content equally, and not slow or block access to websites.
Mr. Schmidt addressed those reports in a conference call on Monday, denying there was a business arrangement between the two companies.
Internet companies like Google and Yahoo Inc., which offer broadband-intensive Web content such as video, have called on the FCC to prevent carriers from blocking websites, or selectively delaying access.
Satellite TV provider Dish Network Corp. has said it was "100% behind" the FCC's proposal to move all broadband under the more stringently controlled Title 2 clause, which refers to all telecommunications services.
Cable and phone companies have argued that such regulation would limit the prices they can charge businesses and consumers, and hamper their ability to invest in new infrastructure to cope with the growing data traffic on their networks.
The companies in January filed a joint submission to the FCC endorsing "a principled approach to finding common ground with respect to an open Internet."
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