Google CEO Eric SchmidtVerizon CEO Ivan Seidenberg

Net neutrality and the idea of an open Internet have been at the center of contentious debates of late. It has been a confusing issue and one that remains perplexing to this day. I have outlined what has happened in the past week, some of the problems inherent in our current broadband system and summarized Google and Verizon’s proposal, which was announced Monday. Hopefully this will erase some of the confusion that exists. Let's dive into it after the break.

Last week, the New York Times ran a story that suggested Google and Verizon had agreed to a deal that would allow Verizon to prioritize Internet traffic based on who paid the most. This obviously upset a lot of people and went against the open web that Google and Verizon have said they have always stood for. They both came out very publicly against the article, saying adamantly that the information was false.

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It may have been planned already or due to the hysteria last week, but Google and Verizon held a conference call Monday with media outlets outlining a proposal that they submitted to the FCC regarding net neutrality. Their proposal calls for a sustained open Internet that will be made possible with certain policy changes and an increased role of the FCC.

The main problem: Private Internet service providers (ISPs) want to discriminate against certain web traffic and give more broadband to others. The way they decide this can be from personal preference, whoever pays more, or to stifle the competition. Obviously this is a bad thing and nobody wants this to happen.

There are two solutions to this problem:

  1. Allow competition to force the private companies to change
  2. Let the FCC regulate the industry

Ideally, the former sounds like a good plan. More ISPs will drive down prices and force more transparency while making everything better for the consumer. However, there is one fatal flaw to this plan: competition is pretty much non-existant in this industry. There are other options for accessing the web (satellite, dial up, etc...), however, if you want high speed access, you’re more than likely stuck with whichever provider has a monopoly in your area.

So how about plan number 2? The Internet has always been an open industry that has thrived on little to no regulation. Many fear that if the FCC starts to regulate it, they will find ways to keep regulating and eventually we’ll end up with an over-regulated space that doesn’t foster innovation. Between ISP monopolies and FCC regulation, it seems as if we are between a rock and a hard place.

Google and Verizon have been talking extensively and have made a lengthy proposal to the FCC, inviting certain regulations.

Here are several of the key items in the proposal: 

  1. Their proposal would make key elements of the Internet openness principles enforceable, meaning that ISPs are required to allow consumers to use whichever applications, services and devices they choose
  2. They suggest that in addition to the already set in stone principles, there should be another, which will also be subject to enforceability. This relates to discriminatory practices (ISPs would not be able to prioritize some web traffic over others)
  3. The third item would provide greater transparency and produce a larger knowledgeable consumer base. It would require ISPs to provide clear, understandable information about their services and regulations
  4. Fourthly, their proposal would create a new enforceability mechanism for the FCC. The agency would decide disputes on a case-to-case basis and would be complaint driven
  5. A fifth part of the proposal involves the encouragement that broadband providers enter other sectors such as what Verizon did with FIOS TV.
  6. Sixth, most of the proposals will not apply to the wireless world. In fact, it would require the Government Accountability Office to provide annual reviews of the current state of wireless broadband, to determine if these principles need to be applied in the space or not
  7. Seventh, they support reform of the Federal Universal Service Fund in order to allow more people to connect to the Internet

Immediately following the conference call and ever since, journalists and bloggers have been vociferously attacking the two giants.

Check out these pieces for more analysis:

Jeff Jarvis: “Internet, Schminternet”

Stacey Higginbotham (Giga Om): “Tech Companies, Google Sold You Out”

Larry Downes (CNET): “What the Google-Verizon proposal really says”

Eric Schmidt & Ivan Seidenberg (Google & Verizon): "From Google and Verizon, a path to an open internet"

Why are they receiving such vehement attacks? Simple: they want to differentiate between wired and wireless web traffic. Their proposals are aimed the hard wire lines, so that broadband providers cannot discriminate. They say next to nothing (except the annual review) about wireless, which leads many to believe that they would like to see prioritized wireless web traffic. Such an action would be like an act of betrayal, many believe, by the very company that claims to stand for openness. We are going to continue to monitor the situation and the developments, which we’re sure there will be many.

Hopefully this clears up some of the confusion. Google and Verizon are trying to keep an open web, but have obviously made sacrifices for it (such as proposing to increase the FCC’s power and excluding wireless traffic). Naturally some will love it and some will hate it. Whatever your opinion is, please make up your mind once you have all of the correct facts, not some rumor floating around the open web. I encourage you to read as much as you can on the subject, as it is one of the most important technology issues of our time. [Google Public Policy Blog]