NEW YORK (AdAge.com) -- Executives from Google and Verizon denied a New York Times report from last week outlining an agreement where the broadband carrier would deliver Google content at higher internet traffic speeds for a fee.
"There is no business arrangement," Google CEO Eric Schmidt said in a phone conference. "You've read a lot in the press -- almost all of which is almost completely wrong."
Verizon CEO Ivan Seidenberg echoed Mr. Schmidt's statements and said that the broadband provider was equally committed to an open internet. "This debate has been somewhat hijacked by a lot of discussion and issues that are not really reflective of what the company is doing," Mr. Seidenberg said.
At stake is the issue of "net neutrality," a tacit tenet of internet commerce that suggests all content should be treated equally across internet lines. In reference to that principle, as well as to the Times report, the two companies issued a statement outlining a joint policy proposal to the Federal Communications Commission that would make net neutrality a de jure regulation subject to FCC oversight. The commission has limited jurisdiction over internet traffic, according to a recent federal-appeals-court ruling. Congressional leaders have been looking for ways to amend the 1996 Telecommunications Act to bestow greater authority on the FCC.
In recent years, some broadband providers, including Verizon, had looked at the possibility of segregating certain kinds of content, such as video content, which puts a higher stress on broadband carriers' internet lines. Google property YouTube, for example, takes up a lot of bandwidth, and internet providers have suggested in the past that tiered pricing for such content would allow them to better manage the data loads.
But according to Messrs. Schmidt and Seidenberg, the two companies have at least agreed to keep what they call the "public internet" free from any such separation and pricing of content, and went further by taking steps to define a model for net neutrality legislation.
"This new nondiscrimination principle includes a presumption against prioritization of internet traffic -- including paid prioritization," their statement reads.
But Verizon's Mr. Seidenberg said their proposal would still allow for "broadband providers to offer additional, differentiated online services, in addition to the internet," he said, suggesting that the telecommunications giant could offer content on a network separate from the internet. But despite reporters' questions, neither Mr. Schmidt nor Mr. Seidenberg could explain how this network would work or how it would be built.
"It's too soon to predict how these new services will develop," Mr. Seidenberg said, "but examples might include health-care monitoring, the smart grid, advanced educational services or new entertainment and gaming options." He later offered another example that might include the Metropolitan Opera broadcasting in 3D.
Such a proposal suggests a backdoor for carriers like Verizon to keep the internet open while finding other ways to charge for content through a competing network. Mobile broadband, for example, was cited by both executives as being exempt from their proposed FCC guidelines for openness, though it was unclear if that could mean that different kinds of content would be streamed across the mobile network at different rates, or at different prices. Neither company responded to questions about the mobile exemption.
In some ways, Apple has already created a de facto network of tiered content through both their App and iTunes stores. To be sure, traffic is not treated differently on those venues, but the effect of charging for content, whether to the content provider or the consumer, is still apparent.
Mr. Schmidt said, however, that Google would not be part of any schemes to price content or traffic. "Google services will always be on the public internet," he said. "We love the public internet."