Over the last 10 months Google and Verizon have been working on a deal that could change the way we consume and peruse the Web. The deal would allow companies like Google, a content creator, to pay an ISP like Verizon to deliver its content to users much faster than any other content provider.
According to the NYT, the Federal Communications Commission has been working with Internet and content providers, including Google and Verizon, to hammer out an agreement in light of a recent court decision that hindered the FCC’s ability to control or police the Web from stopping something like this from happening in the first place.
What does this mean for us? Nothing, yet. The deal would simply allow Web sites, news organizations, etc. to pay ISP’s to load their pages faster. As it stands, Techland content is delivered at the same speed as, let’s say, Joe Blow’s tech blog. If this deal were to go through then we’d most likely pay ISP’s to decrease load times. It could also lead to tiered service much like cable TV, which would raise the price of Internet service across the board. We pay extra for premium channels like HBO or Showtime, so what would stop us from paying more or less for the Web?
But this deal could mean more than us having to pay a little extra to stream YouTube videos. For example, the publishing industry is teetering back and forth on erecting paywalls for certain content, right? So how would this potential deal work into the grand scheme of things? Well, we might have to pay extra to get content from the NYT or TIME because of existing paywalls. The industry is notorious for acting slow or not at all.
It’s also worth noting that Google’s TV platform Google TV launches in the fall and could factor into the deal as it’s a major play for more ad dollars for Google. Their mobile OS Android has also seen a major upswing in market share over the course of the last six months putting pressure on RIM and Apple. Rumors have also been floating around about a possible Chrome tablet that would be made available exclusively through Verizon Wireless.
Talks between Google and Verizon could falter or end altogether, though. And this would amount to a case of the boy who cried wolf.
Update: Google is firing back via Twitter saying the NYT’s source is wrong:
@NYTimes is wrong. We’ve not had any convos with VZN about paying for carriage of our traffic. We remain committed to an open internet.
Update 2: We’ve just received an official statement from Verizon on the Times article.
The NYT article regarding conversations between Google and Verizon is mistaken. It fundamentally misunderstands our purpose. As we said in our earlier FCC filing, our goal is an Internet policy framework that ensures openness and accountability, and incorporates specific FCC authority, while maintaining investment and innovation. To suggest this is a business arrangement between our companies is entirely incorrect.
Update 3: Bloomberg is reporting that talks have occurred between Google and Verizon but not over tiered Internet offerings.
The compromise as described would restrict Verizon from selectively slowing Internet content that travels over its wires, but wouldn’t apply such limits to Internet use on mobile phones, according to the people, who spoke yesterday and asked not to be identified before an announcement.
Update 4: The WSJ is chiming in with details that fall in line with the NYT. They’re also reporting that an announcement could come about as early as tomorrow.
People familiar with the negotiations said the companies have reached a tentative agreement on managing network traffic that could be announced as soon as Friday.
Details are scarce. People briefed on the tentative agreement, however, said it could provide a framework for legislation that would codify some of the Federal Communications Commission’s net-neutrality principles. It would, however, allow phone and cable companies to offer faster, priority delivery of Internet traffic for companies that pay extra for the service, these people said.
The agreement would not apply net-neutrality principles to wireless networks, these people said. Discussions currently taking place at the FCC have centered partly on whether wireless networks should be subject to net neutrality.
Update 5: FCC Chairman Julius Genachowski has chimed in:
Any outcome, any deal that doesn’t preserve the freedom and openness of the Internet for consumers and entrepreneurs will be unacceptable.