• by Wendy Davis , Staff Writer @wendyndavis, August 5, 2010

A report in today's New York Times that Google and Verizon had reached a deal regarding Web traffic infuriated net neutrality advocates, resulting in heated accusations that Google -- a longtime proponent of open Internet rules -- had betrayed its principles.

The Times article said the companies were discussing a paid prioritization plan that could result in owners of services like YouTube paying extra for speedy delivery. If so, that potentially contradicts the neutrality principle that Internet service providers shouldn't discriminate against services either by degrading or prioritizing traffic.

Google and Verizon both denied arriving at such an arrangement, and a Google spokesperson specifically said that the company has "not had any conversations with Verizon about paying for carriage of Google or YouTube traffic," according to Dow Jones.

Still, advocates point out that the companies aren't ruling out paid prioritization for "managed services" -- a fuzzy concept that appears to involve ISPs dedicating pipes to specific traffic that will be prioritized for a fee.

Advocacy group Free Press says that allowing prioritization of managed services would create a loophole in neutrality rules. "For the managed-service business model to work, the quality differential between the open Internet and the closed managed services would have to be so great that content companies like Google would be willing to pay for this specialized treatment. This could stall investment in the open Internet -- freezing the public Internet in 2010 while the new high-speed lanes take a few big players into the future," Free Press research director S. Derek Turner said in a statement.

An earlier report in the press said that the two companies had largely agreed to preserve neutrality principles for wired services, but not wireless. But that scenario also troubles neutrality advocates, who worry that carriers will prevent smartphone users from using the apps of their choice or visiting particular sites.

Regardless of the particulars, two private companies like Google and Verizon obviously can't make new law. Only Congress or governmental bodies, like the Federal Communications Commission, can require Internet service providers to adhere to neutrality rules. And even the FCC can't enact neutrality rules unless it first reclassifies broadband access as a Title II telecommunications service, given the court's ruling earlier this year in a case involving Comcast. (In that matter, a federal appeals court ruled that the FCC lacked authority to sanction Comcast for throttling traffic because broadband was classified as an information service, and not a telecommunications service.)

Nonetheless, consumer advocates fear that the private Google-Verizon pact will derail efforts to craft meaningful neutrality rules. One scenario put forward by advocates is that the FCC could reclassify broadband access as a telecommunications service, and then proceed with a rulemaking that imposes the Google-Verizon principles on all ISPs.

But a lot of other parties -- ranging from ISPs to Web companies to consumer advocates -- would have a chance to weigh in before that happened.

In the meantime, the FCC said today it had canceled private discussions it had convened with a host of companies -- Google, Verizon, Skype, AT&T, the National Cable & Telecommunications Association and the Open Internet Coalition (which includes Amazon, eBay and Netflix).

Edward Lazarus, FCC chief of staff, said in a statement that the latest round of discussions were "productive," but didn't generate "a robust framework to preserve the openness and freedom of the Internet -- one that drives innovation, investment, free speech, and consumer choice."