Google and Verizon, two powerhouses, have outlined a seven point net neutrality proposal that has the Internet buzzing with comments, and if acted upon could well change the way consumers get and access information. One notable aspect of the policy outlined is the differentiation between the Internet and the mobile Internet. It appears that a distinct definition on mobile internet is surfacing. This makes sense because cell companies are the primary conduit for mobile internet, and with limited bandwidth, they run great risks of overload. It is this distinction that has some carriers implementing higher data plan fees and even avoiding offering unlimited plans.
Google and Verizon stated two main goals:
1. Users should choose what content, applications, or devices they use, since openness has been central to the explosive innovation that has made the Internet a transformative medium.
2. America must continue to encourage both investment and innovation to support the underlying broadband infrastructure; it is imperative for our global competitiveness.
The plan outlines seven points that if acted upon could transform the way we get our information and even offer priorities to certain content over other content. You will have to read a lot between the lines here, but what is happening is two industry giants are teaming up to possibly set policy that will impact the daily lives of consumers in nearly every facet of their daily lives because we are now so connected to the net.
The Seven Points:
First, both companies have long been proponents of the FCC’s current wireline broadband openness principles, which ensure that consumers have access to all legal content on the Internet, and can use what applications, services, and devices they choose. The enforceability of those principles was called into serious question by the recent Comcast court decision. Our proposal would now make those principles fully enforceable at the FCC.
Notice the distinction between wired and wireless here. Most consumers have not yet realized that there are two classes of Internet, but this is indeed the case.
Second, we agree that in addition to these existing principles there should be a new, enforceable prohibition against discriminatory practices. This means that for the first time, wireline broadband providers would not be able to discriminate against or prioritize lawful Internet content, applications or services in a way that causes harm to users or competition.
Importantly, this new nondiscrimination principle includes a presumption against prioritization of Internet traffic – including paid prioritization. So, in addition to not blocking or degrading of Internet content and applications, wireline broadband providers also could not favor particular Internet traffic over other traffic.
Again, a wired distinction. This, along with point #1 seem to offer nothing new at first blush, but the use of “wireline” is setting up for a distinction that becomes more clear in the following points.
Third, it’s important that the consumer be fully informed about their Internet experiences. Our proposal would create enforceable transparency rules, for both wireline and wireless services. Broadband providers would be required to give consumers clear, understandable information about the services they offer and their capabilities. Broadband providers would also provide to application and content providers information about network management practices and any other information they need to ensure that they can reach consumers.
It appears that “wireline” is now shifting to “Broadband” in the language of the points.
Fourth, because of the confusion about the FCC’s authority following the Comcast court decision, our proposal spells out the FCC’s role and authority in the broadband space. In addition to creating enforceable consumer protection and nondiscrimination standards that go beyond the FCC’s preexisting consumer safeguards, the proposal also provides for a new enforcement mechanism for the FCC to use. Specifically, the FCC would enforce these openness policies on a case-by-case basis, using a complaint-driven process. The FCC could move swiftly to stop a practice that violates these safeguards, and it could impose a penalty of up to $2 million on bad actors.
This would apply to “broadband/wireline” services. There is a distinct openness to what Google and verizon want to have happen on broadband services. It is the core of the Internet, and everyone will have open access.
Fifth, we want the broadband infrastructure to be a platform for innovation. Therefore, our proposal would allow broadband providers to offer additional, differentiated online services, in addition to the Internet access and video services (such as Verizon’s FIOS TV) offered today. This means that broadband providers can work with other players to develop new services. It is too soon to predict how these new services will develop, but examples might include health care monitoring, the smart grid, advanced educational services, or new entertainment and gaming options. Our proposal also includes safeguards to ensure that such online services must be distinguishable from traditional broadband Internet access services and are not designed to circumvent the rules. The FCC would also monitor the development of these services to make sure they don’t interfere with the continued development of Internet access services.
Now a distinction on allowing a new tier on Broadband Internet. The FCC would have some controls, but in reality the commission does not have the resources to govern what happens.
Sixth, we both recognize that wireless broadband is different from the traditional wireline world, in part because the mobile marketplace is more competitive and changing rapidly. In recognition of the still-nascent nature of the wireless broadband marketplace, under this proposal we would not now apply most of the wireline principles to wireless, except for the transparency requirement. In addition, the Government Accountability Office would be required to report to Congress annually on developments in the wireless broadband marketplace, and whether or not current policies are working to protect consumers.
The transparency requirement disappears here, and the use of the phrase “most polices” allows a lot of latitude.
Seventh, and finally, we strongly believe that it is in the national interest for all Americans to have broadband access to the Internet. Therefore, we support reform of the Federal Universal Service Fund, so that it is focused on deploying broadband in areas where it is not now available.
Google wants the Internet everywhere. This is not really news. It is through the Internet that Google makes all of its revenue. What is interesting here is that Google’s latest foray in business is highly centered on the wireless side of the house, and the proposed policies give a loophole a mile wide to the wireless side of the business.
Now satellite radio investors may be wondering what this has to do with Sirius XM. The answer is that at the current time there is not a huge impact, but in the future there could be. What if Sirius XM was the “preferred” music provider over a Verizon network and received priority in getting their signals through? What if the “preferred provider” was Google’s as yet launched Google Music?
The fact of the matter is that Internet will penetrate more and more devices in the months and years to come. The distinction of “mobile” that falls under different rules will allow any industry giant to have more control over establishing policy. It creates a wild west out there that lets the biggest players get entrenched with millions of consumers already on board. By the time an annual meeting happens, any new rule would have to be weighed against millions of consumers that are already using a service.
There is a lot happening in the world of the Internet that can impact the world of audio entertainment. Sometimes it is prudent to take a look at the bigger picture and to understand the players involved. Sirius XM is a large company with a substantial subscriber base that drives a lot of revenue into the company. That being said, it pales in comparison to the Verizon’s and Google’s of the world. These players have deeper pockets, more lawyers, and more lobbyists than anyone out there.
With more and more entertainment being delivered over wireless networks, it is only a matter of time before the wireless world becomes just as important as our wired world.