Yesterday, Google and Verizon jointly released a two-page document entitled "Verizon-Google Legislative Framework Proposal." The blandness of this name notwithstanding, the news has people talking about an online "fast lane" and "two internets." The Huffington Post calls it "the pact to end the Internet as we know it." Why has this announcement caused so much speculation and outrage?
The answer lies in the laws governing broadband internet and what they do and don't have the power to do. Originally, the same law that created the Federal Communications Commission--the Communications Act of 1934--classified "wire and radio" communications into several types, the most relevant of which are commonly referred to as "Title I" and "Title II" classification. Title II services are known as "common carriers": a company who wants to offer a Title II service has to connect its networks with other companies' networks and, with a few exceptions, allow anyone who wants to make a connection to that service to do so. Landline phone service is regulated under common carriage provisions: if you make a call on a landline with one service provider and call a landline served by a different provider, you aren't charged an extra fee to connect that one call. You also have the right to plug anything you want into your landline--a phone, a modem, a fax machine--as long as it won't do harm to the network.
- 1934: Communications Act of 1934 establishes the FCC
- 1984: AT&T's phone service broken into smaller regional companies ("divestiture")
- 1996: Telecommunications Act of 1996
- 2002: FCC classifies broadband provision as an "information service"
- 2008: FCC upholds complaint against Comcast
- April 2010: D.C Court of Appeals rules against FCC
- August 2010: Google-Verizon joint statement released
Low-speed dial-up internet, because it is carried over standard phone lines, is regulated under Title II, but high-speed internet isn't. In 2002, the FCC officially declared that cable, DSL, and other high-speed Internet services were not "telecommunications services" and hence not subject to common carrier regulations. Instead, the FCC classified them as "information services," which meant they fell under the jurisdiction of Title I and were subject to fewer regulations.
Three years later, the FCC issued a policy statement known colloquially as the "Four Freedoms," which stipulated that, within the boundaries of the law, broadband Internet users had the freedom to access any content they chose, run any application they chose, attach any devices they chose to their Internet connections, and choose among competing network, application, and content providers. These principles were in full accord with "net neutrality," the idea that all content carried over the Internet should be given equal priority. Net neutrality holds that it doesn't matter whether you're doing something that doesn't require much network activity, like running a Google search or reading a blog, or whether you're doing something that requires more information and more network activity, such as streaming video or making a Skype call. In a framework of net neutrality, an internet service provider gives the same priority to the light traffic as to the heavy.
From 2005 through 2009, the FCC reiterated the "four freedoms" with only slight modifications. When it became known in 2007 that Comcast, a major cable service provider, was interfering with its subscribers' uploads to torrent websites (which provide a way to distribute very large files), the FCC upheld a formal complaint against the company and required it to end the practice in 2008.
Comcast, however, maintained that torrents put such a heavy load on local networks that the actions of a few would slow service down for all users on that network. Accordingly, the company argued, it had the right to single out a certain class of content and place restrictions on its use in order to keep their network running optimally for all users. Comcast took the FCC to court and, this April, won: the D.C. circuit of the U.S. Court of Appeals ruled that since broadband was not classified under Title II, the FCC had no status to enforce their policy [pdf] as binding on broadband providers. (Disclosure: a member of my family works for Comcast.) The FCC found itself with no legal authority to support the four freedoms--and net neutrality--over any broadband connection, either wired or wireless (such as the 3G and 4G networks used by smartphones). Not only was it legal for an internet service provider to single out certain kinds of content to slow down, it was also legal for an ISP to single out certain kinds of content to speed up.
A few Democratic members of Congress started talking about updating the Communications Act, last overhauled in 1996, but two months later, GOP senators introduced legislation to limit the FCC's ability to regulate broadband. Obama, who had mentioned earlier in 2010 that "I continue to be a strong supporter" of net neutrality, did not address the subject again. With Congress and the executive branch making no great headway, in June the FCC opened talks among parties with a stake in broadband services, hoping to establish some industry consensus regarding net neutrality or broadband regulation, which would make it more likely that Congress would pass laws to that effect. But the New York Times reported last week that the talks were not leading to any breakthrough or consensus on "the few big issues that are the most important."
Enter Google & Verizon. In January 2010, the two companies filed a joint statement with the FCC, in which they declared (in an echo of the FCC's "four freedoms") that "customers should continue to have access to the information, products, and services of their choice online"--and that they believed "self-governance" (i.e., not strong regulation by the FCC) was the best policy of first resort for the "the players in the Internet ecosystem."
So it is not surprising that when FCC talks did not lead to a clear consensus, Google and Verizon--who had already established common ground--set up their own private talks.
After Google & Verizon's side talks were reported in the NYT, the FCC ended the series of stakeholder discussions. Three days later, Google & Verizon came out with the joint 2-page proposal regarding internet regulation that has been the subject of so much discussion. It echoes the FCC's policy language, asserting that broadband providers must not keep users from the "lawful content," "lawful applications," and "legal devices" of their choice--but only when it comes to broadband internet carried over wires. When it comes to wireless broadband--used by both smartphones and computers to access the Internet without requiring a WiFi hotspot--Google and Verizon require only that the network's management practices be "transparent," i.e., disclosed. And the "network management" section allows for broadband companies to do as Comcast did--to slow down targeted traffic on their system in the interests of optimal network efficiency.
Right now, Google & Verizon's statement is only a white paper, and has absolutely no force of law. But it establishes a direction for the industry and offers a vision of how the laws about broadband might be written, at a time when the FCC, Congress, and the President have not yet come up with any clear proposal themselves.