FCC Ends Round of Talks With Companies on Internet Regulation

U.S. regulators ended closed-door discussions with companies on Internet regulation after Google Inc. and Verizon Communications Inc. were said to have reached their own deal.

The talks, which drew criticism for their secrecy, haven’t “generated a robust framework to preserve the openness and freedom of the Internet,” Edward Lazarus, chief of staff of the Federal Communications Commission, said yesterday in a statement.

At issue was the FCC’s power over providers of Internet service and whether phone and cable companies may favor some Web traffic, such as speeding certain videos in return for payment. Among participants were AT&T Inc., Verizon, Google, Skype Technologies SA, and the National Cable & Telecommunications Association, representing companies led by Comcast Corp. and Time Warner Cable Inc.

“We’re relieved to see that the FCC now apparently finds dangerous side deals from companies like Verizon and Google to be distasteful and unproductive,” Derek Turner, research director of the Washington-based advocacy group Free Press, said in an e-mailed statement. “The corporate deal-making and the closed-door meetings have generated widespread public outrage.”

Verizon, the second-biggest U.S. phone company, and Google, owner of the largest Internet search engine, reached their own agreement on network rules as the federal talks were under way, two people briefed on the discussions said Aug. 4.

Mobile Phones Exempted

The compromise 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 asked not to be identified before an announcement.

FCC Chairman Julius Genachowski told reporters in Washington yesterday any resolution “that doesn’t preserve the freedom and openness of the Internet for consumers and entrepreneurs will be unacceptable.”

“We’ve been working with Google for 10 months to reach an agreement on broadband policy,” David Fish, a spokesman for New York-based Verizon said Aug. 4.

Google has “nothing to announce at this point,” Mistique Cano, a Washington-based spokeswoman for the Mountain View, California, company, said in an e-mail the same day.

The long-running fight over net neutrality has pitted cable and phone companies that say they need leeway to protect the performance of their networks against content providers and advocacy groups that say the communications companies may favor their own online offerings or those of partners.

Court Decision

The negotiations at the FCC, led by Lazarus, followed a court decision in April that eviscerated the agency’s authority over Internet service providers, and Genachowski’s subsequent proposal to claim authority using rules applied to phone calls. His idea sparked opposition from phone and cable companies and from members of Congress of both parties.

AT&T of Dallas, the biggest U.S. phone company, is disappointed the FCC talks broke down, Jim Cicconi, senior executive vice president, said in an e-mailed statement yesterday.

“We put a number of significant concessions on the table and, despite today’s setback, remain convinced that a consensus solution can be achieved,” Cicconi said.

The FCC talks “made good progress toward consensus,” Tom Tauke, Verizon’s executive vice president, said in an e- mailed statement. Tauke said Verizon will continue to work toward a solution that will keep the Internet open while attracting investment.

Collapse of Talks

The FCC should claim authority over Web service providers and pass rules ensuring an open Internet, following the “collapse” of the talks, Gigi Sohn, president of Public Knowledge, a Washington-based advocacy group, said in an e- mailed statement.

“We were concerned about the negotiations because they were largely restricted to the biggest industry players,” Sohn said.

The participating companies met with the FCC at least nine times since June 22, according to disclosure statements filed at the agency.

Also attending was the Open Internet Coalition. The group, which says it works to keep the Internet fast and open, lists as supporters EBay Inc., Google, Skype, Free Press, Media Access Project, Public Knowledge, Netflix Inc. and IAC/InterActiveCorp unit Ask.com.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

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