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NCTA: Verizon/Google Principles Are Positive Sign - Broadcasting & Cable

NCTA: Verizon/Google Principles Are Positive Sign

Sources say look for FCC to reach out to stakeholders, informal talks to continue, on wider agreement
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Comments were flying as fast as unimpeded bits and bytes
Monday after Google and Verizon outlined their meeting of the minds over
network neutrality principles
. They were pretty much divided between industry
players who praised the fact that an agreement had been reached at all but
stopped short of endorsing it, and network neutrality backers who saw it as a
backroom deal to carve up the Internet.

National Cable & Telecommunications Association spokesman
Brian Dietz had no comment on the specifics of the announcement, which included
allowing managed services and not applying most of the principles to wireless
broadband delivery, but he saw the agreement as a signal of a possible wider
agreement.

"[I]t is a positive sign that two companies with divergent
views on the need for regulation can reach agreement on this complicated set of
issues. We remain focused and committed to exploring a targeted legislative
framework that can be applied more broadly across all industry players. The
Google-Verizon announcement shows that it is possible for compromise and that
we can reach a constructive solution."

While the FCC announced last week it was ending talks it had hosted
among major players in the network neutrality debate, including representatives
of Verizon, Google and NCTA, those parties are free to continue to talk on
their own. Verizon and Google top execs said Monday they had reached out to
those other players to fill them in on the agreement and sources speaking on
background suggested the FCC would continue to reach out to stakeholders, who
would continue to talk among themselves, about a wider agreement on openness
principles.

AT&T, another company in those talks, agreed that Verizon and
Google had built a bridge, but did not say whether it would take AT&T where
it wanted to go on the issue. "We're not a party to this agreement, but will
examine it closely," said Claudia Jones, AT&T VP of public affairs and
media relations. "We remain committed to achieving a consensus solution to
the net neutrality issue, either with the FCC or with the Congress.  In
that sense, the Verizon-Google agreement demonstrates that it is possible to
bridge differences on this issue."

Andrew Schwartzman, SVP and policy director of Media Access
Project, said that the fact that wireless would not be subject to the
principles (with the exception of a customer transparency principle) made the
agreement a "non-starter," adding that it raised more questions than
it answered.

He also took issue with the "actual consumer harm"
standard for the FCC's case-by-case enforcement of the principles, saying that
showing would be virtually impossible to make. He also suggested the fine was
little more than a tiny slap on a huge wrist. "[A] cap on fines at $2
million dollar fine is a rounding error on the balance sheet for companies like
Verizon."

FCC Commissioner Michael Copps, who has pushed the FCC to
reclassify broadband transmission under Title II common carrier regs, was not
assuaged by the companies' commitments. "Some will claim this announcement
moves the discussion forward," he said in a statement. "That's one of
its many problems. It is time to move a decision forward-a decision to reassert
FCC authority over broadband telecommunications, to guarantee an open Internet
now and forever, and to put the interests of consumers in front of the
interests of giant corporations."

A spokesperson for FCC Chairman Julius Genachowski had no comment
on the proposal or the assertion by top Google and Verizon executives that the
chairman had been briefed on their proposal and that the FCC would comment on
it.

Free Press, which along with Copps has pushed the FCC to assert
authority over broadband, suggested the principles was an 800 pound gorilla in
sheep's clothing. "Google and Verizon can try all they want to disguise
this deal as a reasonable path forward," said Free Press political advisor
Joel Kelsey, "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 television. This is much worse than
a business arrangement between two companies. It's a signed-sealed-and-delivered
policy framework with giant loopholes that blesses the carving up of the
Internet for a few deep-pocketed Internet companies and carriers."

In a statement, The Writers Guild of America East called the
agreement a "semantic sleight of hand seeks to prioritize online content,
granting privilege and advantage to those content creators with deeper pockets
who would like nothing better than to destroy the concept of net
neutrality." WGAE President Michael Winship and Executive Director Lowell
Peterson condemned what they called the "creative magic" with which
the companies had divided the online world into the "public Internet"
and "additional differentiated online services."

The Google/Verizon framework would have Congress put teeth into
the FCC's four Internet openness principles, plus the two additional ones--on
nondiscrimination and transparency--that the FCC is proposing in its rulemaking
on network neutrality. But the Google/Verizon principles would also say that
so-called managed services, or online alternatives to the public Internet, were
not a violation of openness. In such cases, content providers would be able to
pay a premium to deliver broadband-hungry services like medical imaging or 3D,
HD video, via those alternative online routes. There would be no paid
prioritization of traffic on the public Internet, and the managed services
could not be used as work-arounds or come at the expense of performance of
traffic on that public Internet, with the FCC charged with monitoring that
environment.

One member of Congress who weighed in Monday didn't like the idea.

Rep. Jay Inslee (D-Wash.), said the agreement simply spotlighted the need for the FCC to step in and take charge. "This afternoon's announcement from Google and Verizon falls far short of the net neutrality principles necessary to protect consumers online,: he said in a statement. "I'm disappointed that such esteemed leaders would put forward a policy proposal that fails to protect the very foundation of the Internet's success - open access for all. Many of us have been warning for a number of years that broadband service providers would begin to use a lack of net neutrality regulations to prioritize their increasingly diverse business offerings and content, thereby jeopardizing open Internet access. Today's announcement is one more reason that the FCC must act to reclassify broadband and protect consumers online."

The SaveTheInternet coalition, which includes Moveon.org, Free
Press and others, said the "pact" would turn the FCC into a
"toothless watchdog" chasing complaints it could do nothing about.
"They are promising Net Neutrality only for a certain part of the Internet, one that they'll likely stop
investing in," said the group. "But they are also paving the way for
a new 'Internet' via fiber and wireless phones where Net Neutrality will not
apply and corporations can pick and choose which sites people can easily view
on their phones or any other Internet device using these networks."

Verizon CEO Ivan Seidenberg told reporters Monday that if there
was one thing the company had learned from working with Google over the past
few months on the issue, was that there were ways to monetize the public
Internet that went beyond their initial understanding. He insisted that managed
services would not drain investment in that public Internet. The term
"public Internet" was used several times in the Google/Verizon press
conference, establishing a rhetorical demarcation between the Internet, where
paid prioritization would not be allowed, to the managed services where it
could be.

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