Verizon, Google make net neutrality pact, sources say

Google and Verizon have come to an agreement on how network operators can manage Web traffic, according to two sources briefed on their negotiations.

The agreement, expected to be announced within days, comes as the Federal Communications Commission tries to get major Internet content firms and network service providers to strike a deal on disputed points of so-called net neutrality rules. It's unclear how the deal will affect the direction of those discussions.

The FCC said Verizon and Google are still part of meetings between senior staff and officials at AT&T, Skype, a cable trade association and the Open Internet Coalition. Public interest groups criticized the meetings and the rumored agreement between Verizon and Google for allowing giant Internet firms to have a greater say in the future of how consumers access the Web.

Verizon wouldn't confirm that a deal was struck but said in an e-mail statement:

"We've been working with Google for 10 months to reach an agreement on broadband policy. We are currently engaged in and committed to the negotiation process led by the FCC. We are optimistic this process will reach a consensus that can maintain an open Internet and the investment and innovation required to sustain it."

Specifically, Google and Verizon's agreement could prevent Verizon from offering some prioritization to the biggest bidders who want better delivery of content on its DSL and fiber networks, according to the sources. But that wouldn’t apply to mobile phones, the sources said, speaking on the condition of anonymity because the companies have not officially made their announcement.

And Verizon could offer some managed services -- better quality to some Web sites such as those offering health care services, the sources said. But some analysts speculate that managed services could also include discounted YouTube and other services to FiOs customers at better quality.

Google did not reply to a request for comment.

The rumored deal drew criticism from public interest groups, who have argued that the country's biggest Web firms and broadband service providers shouldn't have such a strong influence on how federal rules are formed on Internet access.

“The fate of the Internet is too large a matter to be decided by negotiations involving two companies, even companies as big as Verizon and Google, or even the six companies and groups engaged in other discussions at the Federal Communications Commission (FCC) on similar topics," said Gigi Sohn, president of public interest group Public Knowledge.

FCC Chairman Julius Genachowski's chief of staff has orchestrated meetings with Google, AT&T, Verizon, Skype, a cable trade association and the Open Internet Coalition in hopes of presenting to Congress consensus ground rules that would prevent network operators from blocking or slowing down certain Web sites. Genachowski wants an agreement that will encourage lawmakers to introduce net neutrality legislation as the FCC struggles over its ability to regulate broadband providers.

The six officials at the FCC meetings, which continued Wednesday and will resume Thursday, are hashing out details on whether wireless phones should be included in legislation and if carriers can charge for better quality of service.

The FCC declined to comment specifically on Verizon and Google's deal, but an FCC spokesperson said: "The broad stakeholder discussions continue to actively include Google and Verizon.”

According to the sources, Verizon and Google have met separately to reach an agreement they will tout as an example of successful self-regulation. Once bitter opponents in the so-called net neutrality debate, the firms have grown closer on the issue as their business ties have also strengthened. Verizon partners with Google on their Android wireless phones.

Their actions could set a course for the FCC meetings and what ultimately the parties could present to lawmakers, analysts said.

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