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2010-08-06

Verizon & Google Enter Reported Deal for Tiered Internet Use, Is Net Neutrality in Jeopardy?

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Josh Silver, president and CEO of Free Press

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The internet and telecom giants Verizon and Google have reportedly reached an agreement to impose a tiered system for accessing the internet. The deal would enable Verizon to charge for quicker access to online content over wireless devices, a violation of the concept of net neutrality that calls for equal access to all services. The deal comes amidst closed-door meetings between the Federal Communications Commission and major telecom giants on crafting new regulations. [includes rush transcript]

Transcript

This is a rush transcript. Copy may not be in its final form.

JUAN GONZALEZ: We begin today with news about the reported deal between internet and telecom giants Google and Verizon that many fear could spell the end of the internet as we know it. The two corporations were reported to have reached an agreement to impose a tiered system for accessing the internet. The deal would enable Verizon to charge for quicker access to online content over wireless devices, a violation of the concept of net neutrality that calls for equal access to all services.

Both firms denied they were close to an agreement that would lead to a, quote, "two-tier internet." In statements, both Google and Verizon reiterated their commitment to an open internet.

AMY GOODMAN: Meanwhile, the Federal Communications Commission has called off its closed-door negotiations with major telecom giants on crafting these new regulations and pledged to seek broader input. FCC Chair Julius Genachowski said, quote, "Any outcome, any deal that doesn’t preserve the freedom and openness of the internet for consumers and entrepreneurs will be unacceptable."

Well, for more on this story, we’re joined from Chicopee, Massachusetts, by Josh Silver, the executive director of Free Press, [freepress.net], a national media reform organization.

Josh, welcome to Democracy Now!

JOSH SILVER: Thank you.

AMY GOODMAN: What are your major concerns, and what’s the latest you’ve heard on this reported deal?

JOSH SILVER: Well, before I answer that question, I want to back up a little bit and get to this idea of net neutrality, which so many Americans, so many viewers and listeners to your show, probably think, well, that maybe — that’s just for geeks. The reason net neutrality matters — it’s been the law of the land for the internet since it was created about forty years ago — this is the principle that says all content on the web travels at the same speed, whether it’s ABC News sending it or it’s Democracy Now! or it’s your cousin’s wedding video. And the key there is understanding that as internet speed increases, then we’re going to see all media — television, radio, phone service, emerging technologies — all delivered through an internet connection. Any website could become a television network or a radio network. It’s a complete game changer that breaks open access and distribution of media content. So, when we have the changes in policy deals like the Google-Verizon deal that we’re going to talk about today, this is going to have a profound effect over whether that revolutionary sort of opportunity is realized or whether it’s going to be squandered.

Now, with the Google-Verizon deal, there is an interesting backdrop to all this. First of all, the United States is slipping perilously behind other nations in internet speed and adoption. We’ve gone from fourth to twenty-second in the last ten years, because of failed hands-off policies, the same kind of policies that led us into the financial crisis, same kind of policies that led to the Gulf of Mexico spill, sort of, you know, government saying, "Go ahead, industry. Do whatever you want." And guess what? Consumers get the bad side of the deal.

In April of this year, an astounding thing happened. Because of moves made by the Bush FCC, the current Federal Communications Commission was stripped of all authority to regulate the internet, to regulate — or not just the internet, but the internet service providers — a key distinction. They are no longer able to say, "Hey, Verizon, hey, AT&T, that’s not fair. You can’t price gouge consumers. You can’t indiscriminately block content." And that comes in the backdrop of a president who had said during the campaign, President Obama, "I am a fierce advocate of net neutrality," and then he appointed an FCC chairman, the current chairman, Julius Genachowski, as you mentioned, an avowed net neutrality supporter. But then things got — started to get really strange. Over the past couple of months, Chairman Genachowski pulled industry leaders into his offices, no public interest groups, and said, "I’m not going to make a move to reassert my agency’s authority, even though that would be an easy thing for me to do. Instead, I’m going to ask you industry players to broker a deal and try to create a compromise that we can all live with. And I’m not going to worry so much about the public interest groups." At least, that’s how it felt from here.

And so, now we’re in this strange limbo where the FCC chairman is sitting on his hands. He’s not reasserting the authority of his agency that’s needed to protect net neutrality and bring competition and drive down prices and get universal broadband to every American. And we’ve got Google and Verizon, who, amidst this, announced a deal unexpectedly this week — there had been rumors of it, certainly didn’t think it was going to happen so quickly — a deal that would essentially say, "OK, it’s going to be alright if we actually block or slow down content in the wireless space. And in the wired connections to the home or to businesses, we can sort of have something called 'managed services,' which lets us slow and discriminate content as we see fit." And part of what’s so remarkable about this, Google, for the last five years, during this epic battle over net neutrality, Google has sided with the public interest groups and with other internet companies like Skype and Verizon —- or, excuse me, Skype and Amazon and eBay and others to support net neutrality and support consumers. So, them, this giant elephant -—

JUAN GONZALEZ: Josh, I just want to interrupt for one second. Before we get to the Google-Verizon deal, I want to backtrack a little bit to the net neutrality issue, as you defined it. The argument of the telecom companies has obviously been — and the cable companies — "Hey, these are our pipes. Why shouldn’t the people who hog more bandwidth and use up more of the bandwidth on our pipes be charged more for what they do?"

JOSH SILVER: Well, here’s the problem, Juan. In the United States, we have an incredibly uncompetitive market. And as a result, we pay — the American consumer pays — far more money, orders of magnitude more money, for much slower service than in countries like Denmark or Japan or France or England. And so, what we’ve got is an uncompetitive market with two or fewer internet service providers in 97, 98 percent of markets across the country. And so, consumers don’t have choices. So if, let’s say, that your Verizon provider is blocking or slowing down traffic, and you don’t like it, you don’t really have a choice. That’s problem number one. Number two, you know, losing net neutrality then allows these companies to prioritize some traffic — video, say — and de-prioritize others, and then what effectively happens is the internet becomes like cable television, where Verizon, AT&T, Comcast and Time Warner Cable decide what’s fast, what’s — how much it costs, and who’s slow. And you suddenly have the exact same problem we have with cable, with lack of access and distribution for regular people.

JUAN GONZALEZ: Now, do you think there may have been some naïveté or errors on the part of the consumer advocates in this alliance that’s been in existence now for several years, with companies like Google and the eBays of the world, that there was a sense that they would stick up for the right thing on the issue of net neutrality, but now that it’s become — the proper price that they like has apparently been offered by Verizon, they’re now willing to desert the advocates and move over to a deal with the telecom companies?

JOSH SILVER: No, I think, at the time, it certainly was a smart tactical decision. Remember, we had a presidential candidate in Obama that literally said, "I will take a backseat to no one for net neutrality." Those are strong words. And suddenly we have all these powerful industry players echoing that sentiment and agreeing specific — with the identical policy that the public interest community wanted. Everybody thought that when Julius Genachowski took over the Federal Communications Commission, he would quickly pass a net neutrality rule and solve this problem and make good on the President’s promises. It is a testament to the massive lobbying clout of the telephone and cable companies that this has happened, that this FCC chairman — certainly unexcusable, but it explains why he’s sitting on his hands, although it really is to the surprise to all of us. We all thought that this would not be a problem by now. Nobody expected the court case in April that took away the agency’s authority. Many people are not talking about the fact that it would be very easy for Chairman Genachowski — he has the votes — to simply move what’s called a reclassification of agency authority, and he could reestablish his authority at the agency, and we can solve this problem.

And what’s really the most alarming thing, Juan, is the fact that what we’re seeing is the same old same old, the same kind of approach to policy making and regulation that we saw in the run-up to the financial crisis, the same kind of oversight that we saw with the oil spill. It’s the same kind of money in politics kind of running the show and running the table in Washington. And at some point, we have to stop it, because the fact is, if we can’t deal with this money-in-politics problem and the campaign finance problem, and if we cannot ensure quality journalism and access to information for the American people, we have no democracy. It will not work. And those are the two lynchpins of our current democracy, and every problem with every other issue circle back to them. Fortunately, especially with this internet issue, there is something you can do. You can go to savetheinternet.com. You can take action, join millions of people who get it and are starting to get involved.

JUAN GONZALEZ: And what about Congress, the overwhelmingly Democratic Congress? Is there any hope that Congress can step in and right what’s occurred right now and be able to put some limits on these deals that are being put together by Google and Verizon and the other companies?

JOSH SILVER: The reason Congress can’t act on this in a way that’s reliable is the same reason that the healthcare bill got glutted with loopholes. The telephone and telecom industry is second only to big pharmaceutical in Washington spending. They run the table with the US Congress, and it’s well known in town. The fact is, is that we had all but one House Republican vote against the FCC having any authority over internet service providers. We had seventy-four Democrats from the House come out and say no agency authority. These are folks that are really doing whatever the phone companies tell them to. And so, if you leave this to Congress, you can be certain that, if there is any legislation, it too will be riddled with loopholes, and the consumers will pay.

AMY GOODMAN: Finally, Google is denying this. They said, "We have not had any conversations with Verizon about paying for carriage of Google traffic. We remain as committed as we always have been to an open internet." Josh Silver, your response?

JOSH SILVER: Those are bogus and expected denials. They also — it should be noted, they’ve been very opaque. They’ve been in short statements and in Twitter feeds. The fact is, is that what Google is saying is almost like saying, "We don’t want to sell cigarettes to nine-year-olds, but we want to be able to sell cigarettes to nine-year-olds if we decide to." That’s the analogy that you could use in this case.

AMY GOODMAN: And Google’s slogan, "Do no evil"?

JOSH SILVER: I think it’s over. The era of Google doing no evil just ended at the moment of this deal. Now, there is a possibility they’re going to change the terms of this deal, which has yet to be announced — it’s expected it’ll be announced on Monday — but if they go ahead with this, Google is joining the ranks of the evil corporations that will do anything to make a profit at the consumer’s expense.

AMY GOODMAN: Josh Silver, we want to thank you for being with us, president and CEO of Free Press. That’s freepress.net.

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