proposal from Google and Verizon to create a framework for Congress to enact new competitive rules for ISPs. That proposal in turn seeks to fill a vacuum left by a federal appeals court, which effectively stripped the FCC of its authority to oversee broadband earlier this year.

The delicacy of the negotiations to reassert federal control of the internet were made clear on Wednesday when the FCC announced that, due to recent events — a clear reference to Google and Verizon’s recent policy “compromise” statement — it needs even more comments on “what framework will guarantee Internet freedom and openness, and maximize private investment and innovation.”

Specifically, the FCC wants feedback on whether ISPs should be allowed to build special web services for their own customers (.pdf), or if they should be prevented from competing directly with companies that create services for the general internet and thus depend on unbiased service from network providers.

At stake is an arcane administrative ruling issued during the Bush administration that reclassified internet providers as “information services” rather than “telecommunications services.” The FCC is specifically authorized to regulate only the latter. Now anti-regulatory factions, which naturally include the giant telecom monopolies that control the fixed and wireless broadband markets in the U.S., are fighting tooth and nail to keep the distinction intact, and the FCC off their turf.

Until the FCC finds a way through the thicket, there is still no federal authority that can prevent your ISP from dictating what browser you use, what brand of mobile phone computer or router you plug into the network or blocking your favorite website or protocol.

Your ISP and mobile phone company can make their services go faster than their competitors without fear of federal regulators fining them, and they can throttle your connection at any time, for any reason, without having to explain to anyone why they did it.

Free market groups argue that’s fine, since the market is competitive enough that ISPs will have to play fair with their customers. Others argue that the very basis of the internet is a transport layer that simply works, tries its best and doesn’t play favorites, and letting large telecoms muck with that puts all the innovation of the last two decades and those of the decades to come at risk.

Google and Verizon had long been at opposite ends of the net neutrality debate. Google, which makes its money on the web, wants the government to ensure that people have the right to use whatever services, devices and applications they want, and that wireless and traditional wired ISPs should be required to act as disinterested conduits — simply ferrying packets back and forth. Innovation, according to Google and many net neutrality supporters, happens in the development of applications and services, not in the network itself, regardless of whether that network is cable or 3G.

But telecoms including Verizon, the nation’s largest wireless company and one of its biggest fixed broadband companies, protest that such rules would be heavy-handed, reduce innovation and throttle investment in new infrastructure, especially in the wireless world.

Making good on an Obama campaign promise, the FCC announced last fall that it was going to formally adopt six broad principles of so-called net neutrality. The first four had been established informally in 2005 for cable and DSL customers: People would have the right to use whatever legal online services, devices and applications they wanted, and Americans would have the right to choose service providers from among various competing ISPs.

FCC head Julius Genachowski, a law school classmate of President Obama, wanted to add two more rules: One, broadband providers cannot discriminate against services or applications by slowing them down, and two, broadband providers must tell customers how its engineers manage the network congestion.

The FCC also wanted apply some of the rules to the growing mobile broadband industry, something that Skype and Google had been fighting for. That fight included a $4.6 billion bet by Google that forced Verizon to buy wireless spectrum with open access rules applied to it. (The FCC has never ruled one way or the other if the original rules applied to wireless.)

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Authors: Ryan Singel

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