Federal Communications Commission officials reportedly put an end Thursday to further private talks with Google (GOOG) and Verizon (VZ) to develop a loosely regulated level playing field for how Internet content gets delivered by telecom and cable operators, according to a report in The Wall Street Journal.
FCC officials are apparently steamed over news reports that Google and Verizon were playing footsie under the table while the agency tried to hammer out a net neutrality arrangement among telecoms, cable and Internet content providers. The FCC is seeking to ensure that telecommunications and cable operators don't slow down or bar access to certain websites, and that all content providers are given a fair and level playing field to get their information to viewers.
Google, according to the reports, was willing to pay Verizon for faster speed, which in turn would allow its pages to load faster. The two companies denied they had reached such an agreement, but didn't go as far as to say there wasn't some form of an agreement.
Not a Level Playing Field
According to The Wall Street Journal, Verizon issued a statement that says its agreement aims to develop an "Internet policy framework that ensures openness and accountability, and incorporates specific FCC authority." The article further notes that the agreement calls for the ability of broadband providers to offer up a premium service where it would charge content providers who wanted access to faster speeds -- but does not specifically describe it as a Google/Verizon deal.
Advocates for a level online playing field say that whole premise flies in the face of what net neutrality is all about. A tiered payment system would put less well-financed content providers at a disadvantage. After all, who wants to shop on an e-commerce site during the holiday crunch where it takes forever for the pages to load?
Verizon and Google may have opened Pandora's box with this alleged side agreement. The FCC is considering seeking to change the designation of broadband service from an information service to a telecommunications service. In doing so, the FCC would likely gain clear authority to oversee broadband services.
Last April, a federal appeals court struck down that authority, ruling that the FCC could not prevent broadband providers from blocking certain websites or slowing down access to others. Since that court ruling, the FCC has been looking for a way to regain its authority over broadband.
Why do investors make the decisions that they do?View Course »