Google disputes it has deal to pay Verizon for Internet priority

Several news services including Bloomberg and Reuters are reporting that Google and Verizon have reached a deal which would regulate how Internet traffic would be handled. While generally upholding net neutrality principles, it does seem to offer Verizon considerable leeway.

Google defended itself on Thursday, claiming reports that it had paid Verizon for Internet priority were false, specifically the account provided by the New York Times was wrong. It did not refute reports that a deal had been reached, which was reported by other outlets.

Verizon backed up those claims, saying in a statement today that "to suggest this is a business arrangement between our companies is entirely incorrect."

The deal comes amid the FCC attempts to negotiate directly with major Internet companies over the matter. Google, AT&T, Verizon, and Skype have all been invited to Washington for closed-door meetings with the FCC in an attempt to salvage net neutrality and be able to present legislation to Congress that is agreeable by all parties.

Under the terms of the deal, Verizon has apparently agreed to not treat traffic delivered over landlines differently. The company would however reserve the right to discriminate on traffic sent to wireless devices, however.

While seemingly a victory for net neutrality, the absence of a similar deal for wireless Internet connections may prove troubling and actually a blow to the effort. With devices increasingly cutting the cord, a growing percentage of Internet traffic is being delivered wirelessly.

According to a statement from Verizon, the two sides have been working on such an agreement for about ten months. Neither Google nor Verizon would confirm however if any deal did indeed exist.

The significance of the deal is also in question, considering it only would cover one service provider and a single content provider. It is not known whether other companies would sign on, as they were not privy to the talks. Add to this that smaller companies -- especially those working in the mobile space -- may object to the deal, and it seems to suggest the agreement may carry very little weight at all.

In Washington, it appears the FCC is interested in something more comprehensive. Following an appeals court decision in April that said the agency lacked the authority to regulate how companies treat traffic, the agency has looked for ways to deal with the issue of net neutrality.

One of the ways to do so would be to reclassify broadband as a telecommunications service, which is subject to stronger regulation but very unpopular in the industry. Another option appears to be legislation in Congress, which may be easier to get through if it can gain support from the industry's biggest players first.

Such a technique has not been well received by all. "The agency's job is to serve the public. Accordingly, the FCC's primary concern should be the needs of the nation, not those of big telecommunications or cable carriers," Kamilla Kovacs said, who is development and communications director for the non-profit law firm Media Access Project.

Opponents argue that it is the content providers that power the Internet, and thus should have unfettered access. Allowing ISPs to prioritize traffic, and possibly charge for better access, could stifle innovation.