FCC net neutrality talks come to an impasse

FCC Chairman Julius Genachowski's net neutrality dream took another hit this week when the agency decided to call off talks when it could not reach a consensus on its proposed regulations.

Over the past month and a half, the FCC held closed-door meetings with incumbent service providers AT&T (NYSE: T) and Verizon (NYSE: VZ) and next-gen Internet application companies Google (Nasdaq: GOOG) and Skype to hammer out an agreement on how to manage Internet traffic.

Edward Lazarus, FCC chief of staff, said in a statement that while the discussion "has been productive on several fronts, but has not generated a robust framework to preserve the openness and freedom of the Internet," adding that "all options remain on the table as we continue to seek broad input on this vital issue."

This latest development comes a day after reports in both Bloomberg and the New York Times emerged that the Verizon and Google--two companies clearly on both sides of the net neutrality issue--worked out a deal to manage traffic. Bloomberg reported that Verizon would not be able to selectively slow down Internet traffic on its wireline network, while the New York Times story revealed that Verizon would be allowed to offer faster speeds for some Internet content if the content's creators paid more for service. However, both Verizon and Google refuted the NYT report.  

According to the Wall Street Journal, people close to the matter said that the FCC thought the potential Verizon-Google deal "undermined their broader talks."  

Opposition from public interest groups--many of which were kept out of the talks--said that Internet regulations should not be based on deal crafted solely by two companies.

 "As an agreement in principle, it should not be taken as a template or basis for Congressional action," said Gigi Sohn, the president of Public Knowledge, said in a statement. "The fate of the Internet is too large a matter to be decided by negotiations involving two companies, even companies as big as Verizon and Google, or even the six companies and groups engaged in other discussions at the FCC on similar topics."

But it appears that public interest groups aren't the only ones opposed to the net neutrality proposal. The FCC's proposals to reclassify broadband a Title II service continue to be met with opposition from a growing number of Democratic Congressional leaders. As reported in FierceTelecom's sister publication FierceWireless, about 78 Democrats in the House of Representatives and three in the Senate have opposed Chairman Genachowski's reclassification proposal.

For more:
- here's FierceCable's take on the issue
- Reuters has this article
- The Wall Street Journal also has this coverage (sub. req.)

Related articles:
FCC's net neutrality compromise meetings grind on
Comcast, Google and Verizon create network management advisory group
Comcast wins; Court says FCC has no authority to regulate broadband
Net neutrality won't close the digital divide
France flirts with net neutrality

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