The Net Neutrality spat explained

By ProPublica
August 7th, 2010

By Marian Wang in Propublica

In recent weeks, top officials from the Federal Communications Commission have held closed-door meetings to negotiate with the country’s biggest communications companies and online service providers on how the Internet should be regulated. In a statement today, the FCC said it had called off those talks, saying the effort “has been productive on several fronts, but has not generated a robust framework to preserve the openness and freedom of the Internet.”

At stake is the principle of net neutrality — the idea that Internet service providers must treat all traffic equally, and not privilege certain content by giving it more, or less, bandwidth — a principle that the FCC has been more aggressive about implementingunder the Obama administration.

Here’s how Eric Schmidt, Google’s CEO, has explained net neutrality, as reported in the Guardian:

Google defines net neutrality in the following way: if you have a content category like video we want to make sure that the operator does not favour one video [provider] over another because that would then allow the operator to pick winners in the category,” he said. “Imagine a situation where the operator also owned a TV network and discriminated in favour of that TV programming against the other choices. That would not be seen as fair.

Google has historically come out in favor of net neutrality. That puts it in opposition with big cable and Internet companies likeVerizon and AT&T, which would wield a great deal of power — and could stand to gain payments from content providers who want their content delivered more quickly than competitors’ — if the government’s efforts to regulate and protect net neutrality are weakened.

So when The New York Times reported today that — separate from the FCC’s negotiations — Google and Verizon were nearing a deal that “could allow Verizon to speed some online content to Internet users more quickly if the content’s creators are willing to pay for the privilege,” it lit some corners of the Internet on fire with indignation.

Though Google’s public policy team said over Twitter that the Times piece was wrong, The Wall Street Journal put out a similar piece — also citing anonymous sources. Bloomberg has come out reporting that the deal would apply only to Internet use on mobile phones. Following the news of a Google-Verizon deal, the FCC broke off the private meetings it had been conducting with the communications and online content companies, announcing they had not been able to reach a compromise. No Google-Verizon deal has officially been announced.

Whatever the case, it’s worth noting that in recent months, these companies have not been holding back on their lobbying cash on this issue and others.

Tech blog Ars Technica pointed out that Verizon has outspent its competitors lately, spending more than $4.4 million on lobbying in the second quarter of this year — more than triple what it spent in the same time last year. On the whole, cable and Internet companies opposing net neutrality seem to be spending significantly more than the content providers, which also have a lot at stake:

AT&T spent $3,086,786.27 on lobbying in Q2, about $30,000 more than it did in the second quarter of 2009. Of late, Comcast dispersed $3,820,000 in green love to various causes dear to the cable giants’ heart. And Time Warner Cable spent $1,440,000.

And don’t forget about the companies that provide online content. Google budgeted $1,340,000 for lobbying in Q2, Amazon set aside $500,000, slightly less than Yahoo!’s $550,000, and Microsoft had $1,850,000 on hand for the task.

As we noted, many of these broadband companies turned their backs on stimulus money last fall, afraid that the funds would come with strings attached when it came to net neutrality.

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