Opinion: Google and Verizon Put the Squeeze on the FCC

(Aug. 13) -- Earlier this week, longtime net neutrality supporter Google teamed up with longtime net neutrality opponent Verizon to offer a proposed framework for the regulation of the Internet. The proposal would prohibit Internet service providers from discriminating on wireline networks -- like cable or DSL -- but would also let ISPs charge some Web content providers more for speedier service. In addition, it would let wireless networks -- such as those that serve iPhones and BlackBerrys -- operate outside of neutrality rules.

Both Google and Verizon have business interests that are served by the deal. But the proposal also serves as a way for two major industry players to take the lead at a moment when the Federal Communications Commission is faltering. Will the proposal allow both companies to hurdle the agency's intended regulatory barriers? Perhaps. But the real question is whether the FCC should be involved at all.

The Google-Verizon proposal comes at a time when, at least on Internet policy, the FCC looks increasingly weak. In theory, the FCC is charged with overseeing the domestic network of data-carrying landlines and wireless signals that make up the Internet. But many of its recent regulatory plans have been foiled. Now, despite attempts at compromise, it's having trouble finding backers for its agenda.

The FCC's troubles started in April, when a court ruled against the agency's censure of cable giant Comcast. The FCC had attacked Comcast for slowing the service of BitTorrent, a popular file-sharing service, which the agency saw as a violation of its net neutrality guidelines. But the court ruled that the FCC lacked the authority to require ISPs to abide by its neutrality principles; guidelines, it said, were not enforceable rules.

Yet rather than drop the issue, the FCC offered up a radical solution: Why not begin a wholesale shift in the way broadband Internet providers are regulated by lumping them into the same category as old-style wireline telephone operators? Agency Chairman Julius Genachowski portrayed his solution as a "third way" compromise, but no one seemed too thrilled by it.

On the industry side, Genachowski's compromise faced years of drawn-out court battles with no guarantee the agency would win. Indeed, it's never been clear whether Congress has actually granted the FCC the authority to make the change.

Politically, it's been a nonstarter. In May, 37 Senate Republicans sent Genachowski a letter warning that his proposal was "heavy-handed" -- and quite possibly illegal. And 74 House Democrats warned the agency to back off, saying the proposed change "should not be done without additional direction from Congress." Even the White House has been quietly pushing the agency to move with caution.

With the FCC getting squeezed from all sides, a proposal from two major players traditionally understood to be on opposite sides of the issue stands a good chance of getting both companies what they want most. For Google, that means a guarantee that no ISP will actively block Web content, but also the option to pay for enhanced service if it wants. For Verizon, that means not having to worry about neutrality in its wireless offerings. Google stands to benefit from this, too, as it has increasingly partnered with Verizon to offer phones that run on its Android mobile operating system.

Neutrality backers like Free Press are outraged: the group's website banner reads "Don't Let Google Be Evil."

But the question we should be asking isn't why the FCC looks so weak, it's why the agency is involved at all.

Verizon and Google managed to independently agree on a policy that encourages innovation and prohibits discrimination. Even the original Comcast net neutrality case was solved privately: After an outpouring of consumer concern, Comcast and BitTorrent worked out a mutual agreement in which Comcast agreed to change its practices -- months before the FCC's censure.

The history of the Internet is a history of consumer welfare improving as innovative tech companies negotiate to expand services. So yes, the Google-Verizon proposal is an attempt to take advantage of a moment of FCC weakness. But it's also an attempt to do what's in the interests of both the industry and the consumers it serves -- by moving past the FCC's regulatory roadblocks and getting down to business.

Peter Suderman is a columnist and associate editor at Reason magazine.