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A manager demonstrates Motorola's new Droid smart phone sold through Verizon at the Verizon store November 5, 2009 in Orem, Utah.
Google and Verizon have reportedly struck a deal to tier access to certain internet sites. The news has revived the debate on the meaning -- and future -- of net neutrality.
This post was updated at 2:50 p.m. to reflect denials from Verizon and Google.
In a move that could change the landscape of the Internet, Google and Verizon are reportedly close to a deal that would allow Internet service providers to prioritize traffic from certain websites.
Citing unnamed sources, The New York Times first reported the news on Wednesday. The negotiations between the two companies are continuing and neither of them has announced any agreement.
Verizon issued a statement Thursday, saying the the Times article was "mistaken" and "fundamentally misunderstands our purpose" in talking to Google.
... our goal is an Internet policy framework that ensures openness and accountability, and incorporates specific FCC authority ... .To suggest this is a business arrangement between our companies is entirely incorrect.
Google also denied making a deal. A company statement said that it has not talked to Verizon about "paying for carriage of Google or YouTube traffic" and that the company remains "committed" to "an open Internet."
In essence, a deal like the one described in the Times could mean that a company like YouTube -- owned by Google -- could pay Verizon to make sure that traffic from its site is delivered to consumers faster than traffic from a site that doesn't pay Verizon for that privilege.
The purported agreement comes on the heels of a federal court decision that dramatically curbed the Federal Communications Commission's ability to regulate the broadband market.
In that decision, the U.S. Court of Appeals for the D.C. Circuit struck down the FCC's ability to regulate and ensure net-neutrality. It ruled in favor of Comcast, asserting the cable company's right to slow down traffic for people using certain bandwidth-hogging services like BitTorrent.
Bloomberg News and The Wall Street Journal reported a slightly different deal was in the works. In that version, Verizon would be allowed to tier Internet delivery on their wireless broadband, but not their wired broadband.
Roger Entner, head of research and insights at Nielsen, said these reports just pour oil "onto the flames of the net neutrality followers."
The reaction from bloggers has been swift. Om Malik's post on the news came with this dramatic headline: "Did Net Neutrality Just Get Knifed in The Back?"
Gigi B. Sohn, president and co-founder of Public Knowledge, a digital consumer advocacy group, put out a statement saying the fate of the Internet is too important to be decided by two companies.
She went on to say:
The point of a network neutrality rule is to prevent big companies from dividing the Internet between them. We do not need rules to protect Google and Verizon, but we need a rule to protect the customers of Google and Verizon and the competitors of Google and Verizon.
Entner said this only brings net neutrality back into the spotlight.
"We have very strong proponents of net neutrality in the current administration," said Entner. "They've lost in the courts. This is the beginning of the battle around net neutrality, rather than the end."
Adam D. Thierer, the president and director of the Center for Digital Media Freedom, wasn't shocked, surprised or concerned about the reported deal. Thierer has been a critic of net neutrality, but beyond an ideological opposition to more regulation, he sees this as an industry trying to find its groove.
"Consumers," he said, "have a lot more power than we give them credit." If, indeed, consumers start seeing that quick access to YouTube comes at a cost to access to Vimeo, for example, consumers would react and the companies would have no choice but to change the way they do things, he said.
Even before the FCC's complaint against Comcast slowing down connections for BitTorrent users, the news had consumers reacting strongly. Comcast backed down, even though the courts ruled in their favor.
Also, Thierer said, the reason wireless companies are coming up with creative ways to control traffic is because consumers have reacted adversely to metered pricing.
"AOL tried it back in the narrowband days, and they had to turn back because consumers had gotten used to the all-you-can-eat model," he said.
It leaves wireless companies little choice but to look for revenue elsewhere, he said. So he thinks what will emerge will be a "net-neutral lite model," in which the networks that can handle big loads of traffic (landlines) will be neutral and those which are strained (wireless) will be tiered.
Entner, of Nielsen, says ultimately this is something Congress will have to pick up.
"I think it's becoming clearer and clearer that the Telecom Act of 1996 is describing the past, not the future," he says. "It's such mess and a huge undertaking that no one wants to take on revising it." Copyright 2010 National Public Radio. To see more, visit http://www.npr.org/.