Google Denies Reported Deal With Verizon

Internet giant Google is denying that it's reached a deal with Verizon on Internet traffic management. Both companies have been part of closed-door negotiations on the future of broadband regulation brokered by the Federal Communications Commission — talks that have also now been called off, perhaps in response to the uproar over the reported Google-Verizon deal. Public interest groups fear that a compromise between the dominant broadband carriers and the biggest Internet companies will create a two-tiered Internet: faster speeds for those who can pay and slower service for everyone else.

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Internet giant Google is denying reports that it's reached an agreement with Verizon over broadband service. The two have been talking about a deal that would ensure speedier delivery of Google's content for a price, and that stirred angry responses from public interest advocates who fear that such a deal would lead to a two-tiered Internet. Verizon and Google had been part of closed-door negotiations convened by the Federal Communications Commission on the future of broadband regulations.

As Joel Rose reports, those talks are now apparently on hold.

JOEL ROSE: As reported this morning by The New York Times and others, the deal would allow Verizon to speed up some of the content flowing through its pipes if the creators of that content are willing to pay extra. That would be a major departure from the Internet of today, where all traffic is supposed to flow through those pipes at the same speed, whether it's a big Hollywood movie or some guy's home video of a double rainbow in California.

(Soundbite of laughter)

Mr. PAUL VASQUEZ (Owner, Double Rainbow video): It's is too much. I doubt what it means.

ROSE: Despite what you might be thinking, this is an important point. The idea that broadband companies have to treat all of the traffic on their networks equally is known as net neutrality. And it's what allows you to use any application or visit the most obscure websites with equal ease. Net neutrality advocates worry that a Google-Verizon deal as reported would mean the end for the open Internet and the beginning of a new two-tiered Internet, with a fast lane for the biggest companies and a slow lane for everyone else.

Gigi Sohn is the founder of the Washington, D.C. nonprofit, Public Knowledge.

Ms. GIGI SOHN (Founder, Public Knowledge): The things that are going to come over your Internet pipe faster and with better quality are the same things you see on cable television: the Time Warners, the Disneys, the CNNs. And it becomes more and more difficult for the YouTubes, the next YouTubes of the world, to make a splash; the next Twitters of the world, the next Tumblers of the world because they are put in the slow lane.

ROSE: Both Verizon and Google declined to be interviewed for this story. Google is denying reports that it talked with Verizon about, quote, "paying for carriage of Google or YouTube traffic." A spokesman for Verizon would only say that the two companies have been talking for 10 months about broadband policy that would support, quote, "an open Internet and the investment and innovation required to sustain it."

Its no secret that the phone and cable companies that deliver broadband to most American homes would like to charge content companies a premium for faster service. Rebecca Arbogast is managing director at the investment firm Stifel Nicholas. She says those companies are already getting what they can out of consumers.

Ms. REBECCA ARBOGAST (Managing Director, Stifel Nicholas): Theres a limit to what you or I are going to be willing to pay for broadband service to our home. They're hoping to find some other revenue sources by charging the app companies and the content companies themselves. So what it basically would do would be allow them to harvest from a whole new set of revenue sources.

ROSE: The future of net neutrality has been a hot topic this summer in Washington. Both Verizon and Google participated in a series of closed-door negotiations at the FCC about the future of broadband regulation.

By all accounts, the FCC was trying to broker a deal on net neutrality and other sticky issues that the broadband providers and big Internet companies can all live with.

Mr. PAUL MISENER (Vice President, Amazon.com): Were not ashamed to invest on behalf of our customers. We really want to provide them the best possible services, and were willing to invest to do it.

ROSE: Amazon.com vice president Paul Misener laid out one potential compromise in an editorial last month. Misener says broadband providers should be allowed to offer faster service and that Internet companies like his should be allowed to pay more for the privilege if they want.

Mr. MISENER: We believe that network operators ought to be able to provide special services so long as they are equally available and do not harm other traffic.

ROSE: Misener says that last point is crucial. The cable giant Comcast was caught slowing some traffic on its network in 2007, leading to a court case that has called the FCC's regulatory authority over broadband into question.

And net neutrality advocates say any compromise allowing new fast lanes on the Internet should be carefully defined so that the big broadband companies dont put all their investment into premium services, in effect creating a slower, second-class network for everyone who cant afford to pay.

Ultimately, the FCC's closed-door negotiations ended without an agreement. The FCC officially called off the talks today. Gigi Sohn at Public Knowledge says thats a step in the right direction.

Ms. SOHN: If two big corporate behemoths want to sing "Kumbayah" and come to an agreement, thats fine. But it shouldn't be the basis for public policy. Go ahead and do your thing, but were talking about the fate about the most democratic medium weve ever known. And it shouldnt be left up to the business whims of Google and Verizon or any two or four or six companies.

ROSE: Sohn would like to see the FCC go back to the plan it announced in May and impose tougher regulations to ensure that broadband providers abide by the principles of net neutrality. But in any case, she hopes to see more stakeholders at the negotiating table if talks resume.

For NPR News, Im Joel Rose.

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