FCC scraps Net neutrality talks

The Federal Communications Commission Thursday suspended its weeks-long series of talks with Internet providers on Net neutrality, dealing a blow to efforts to produce a deal that the agency could take to Congress. The decision to cut off negotiations marks a major political setback for Chairman Julius Genachowski, whose office reached out to stakeholders six weeks ago to strike an agreement and avoid a public battle over rules that would treat all users’ Web traffic equally. Advertisement But the end to industry discussions — which a source close to the FCC talks blamed entirely on news that Google and Verizon separately sought some form of net neutrality agreement — could now force the FCC to take a more aggressive approach to solidifying its broadband authority. FCC chief of staff Edward Lazarus stressed in a briefly worded statement that the agency has no plans to back down on Net neutrality, months after a federal court in a case involving Comcast essentially nullified much of the agency’s broadband authority. Lazarus said the agency’s round of stakeholder meetings had not “generated a robust framework to preserve the openness and freedom of the Internet.” But he added that “all options remain on the table.” "Any outcome, any deal that doesn't preserve the freedom and openness of the Internet for consumers and entrepreneurs, will be unacceptable,” he said. At first, the FCC had signaled it hoped to avoid that contentious process by brokering an agreement with key industry players — including Verizon, AT&T, Google, Skype, a cable association and the Open Internet Coalition, a group of Internet companies, such as Amazon, and public interest groups including Free Press. If successful, the talks could have led to a road map for lawmakers, many of whom were left uneasy by the FCC's push to use its own rule-making process to solidify its broadband authority. From the beginning, there was much consternation over the private meetings. Many stakeholders, especially the consumer advocate community, felt left out of the discussions. The secretive talks also excluded the other FCC commissioners and left some in the tech community feeling as if major companies were defining the future of the Internet without their input.

A source close to those discussions says it was news that Google and Verizon sought a separate deal that primarily torpedoed the FCC’s work. The source told POLITICO that many participants, including the FCC, only learned Google and Verizon had started talking as recently as last week, just as the FCC began to pick up the pace in pursuit of some sort of stakeholder deal.

But another source close the negotiations disputed that claim, saying the participants were all aware of existing talks happening between the two companies.

"It's very hard to believe that any two parties could stop a chairman if a deal was there to be made," the source said. "Plus, it was no surprise to anyone that Google and Verizon were working together for months."

At the same time, fear that Google and Verizon might debut a plan calling for the prioritization of Web traffic for content providers willing to pay extra engendered fears among public interest groups. Others feared that alliance of sorts would jeopardize their goal of extending net neutrality to wireless Web, or that a Google-Verizon pact could serve as some kind of imperfect model for congressional action on the issue.

Google soundly denied any deal with Verizon on traffic prioritization on Thursday. But the pressure from initial reports otherwise ultimately seem to unravel the FCC’s efforts, sources told POLITICO.

Still, the collapse of stakeholder discussions could put the agency on a collision course with Congress.

More than half of the House and a considerable number of senators have urged Genachowski to stand down on the “third way,” especially if he does it using the agency’s rule-making process, and still others have implored him to halt action until they return from recess. The agency has not yet signaled, however, whether it will heed lawmakers’ advice heading into its September meeting.

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