Video: Google, Verizon nearing content deal?

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    >>> google and verizon could announce a deal that tech analysts call the end of an unbiased internet. the agreement would give google 's content priority on a verizon internet server meaning it would move faster than other content. google would pay verizon for that privilege. here to help break down the implications of a deal like this, is reporter carole ann mccarthy. good morning to you.

    >> good morning.

    >> let's get to this. the heart of the debate about neutrality, right?

    >> this is -- the thing should be said first this has become a huge press mat because you have multiple media outlets reporting different versions of the story, both google and verizon saying one of the reports that came out of the "new york times" is not true and that report was the one that said that google and verizon were nearing a deal which google would not oppose if verizon said it would announce a tiered contract structure where a provider or wherein a content company could pay to have its content prioritized.

    >> okay. what are the issues against doing that?

    >> the issue against doing that, first of all, that if you think about the cable system, you have premium channels, less premium channels, hob packages. the argument on the consumer side, this would mean that pricing for broad band internet would go up. on the business side the argument big companies like google or microsoft or amazon could pay to have their content delivered faster and a smaller company, particularly a start-up that's trying to get off the ground, would be at a disadvantage because it couldn't afford to do that.

    >> em envisioning price wars . if you make the comparison to cable channels f you don't want to pay for hbo, you don't do it. does that mean maybe you would have gogel taken off your search engines.

    >> one of the things brought up is the fact that, this was actually google 's ceo ear vick schmidt quoted as saying one of the things they're talking about to define what this concept of net neutrality means and one of the things he referred to and was very ambiguous about this, was that perhaps the tiered structure could be applied to different kinds of data. so if you were downloading lots of movies on itunes, for example, there would be a payment difference there than simply loading websites and that some people argue that could be good for consumers because potentially pricing would be lowers for consumers not using a lot of data, but a lot of big-time digital thinkers are saying this will only go in a bad direction.

    >> one question has to be asked, might this lead to big companies controlling the internet?

    >> yes. and that is why the fcc is pushing for more regulation of broadband and the internet. but the fcc suffered a major setback in april when a federal appeals court ruled that they couldn't have this sort of jurisdiction.

    >> interesting stuff. certainly more to come on this. carolyn mccarthy , thank you.

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updated 8/8/2010 5:32:00 PM ET 2010-08-08T21:32:00

Google and Verizon Wireless said Thursday the two companies are not looking to create pay tiers for certain Web sites on mobile phones.

"We've not had any convos with (Verizon) about paying for carriage of our traffic," Google said on Twitter. "We remain committed to an open Internet."

A New York Times story about the talks "is mistaken," said David Fish, Verizon's executive director of media relations wrote on the company's public policy blog. "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."

Verizon Wireless has acknowledged having talks with Google over the past 10 months about Internet traffic to cell phones. The two companies have a common interest, with Verizon now carrying so many phones using the Google-backed, Android-based operating system. Such phones are quickly coming to dominate the smart phone landscape in the United States.

However, Google has been one of the big forces behind the Open Internet Coalition, which supports "network neutrality," the notion that no Internet content should be blocked, slowed or given preference on Internet networks in any way to users in the United States. Verizon Wireless, like other wireless carriers, has not been as big a fan of the idea with concerns about network congestion.

The Times reported that Google and Verizon "are nearing an agreement that could allow Verizon to speed some online content to Internet users more quickly if the content’s creators are willing to pay for the privilege.

"The charges could be paid by companies, like YouTube, owned by Google, for example, to Verizon, one of the nation’s leading Internet service providers, to ensure that its content received priority as it made its way to consumers. The agreement could eventually lead to higher charges for Internet users."

Meanwhile, the Wall Street Journal said Thursday that Google and Verizon Wireless may be announcing an agreement that could be "used as a model for legislation aimed at preventing telephone or cable companies from delaying or blocking Internet traffic," counter to The New York Times' report. That agreement could be announced Friday, the Journal said.

The Times' report of Google and Verizon Wireless' talks was met with with outrage by public interest groups that favor network neutrality.

No matter what discussions Google and Verizon Wireless are having, "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," said Gigi B. Sohn, president and co-founder of Public Knowledge.

The Federal Communications Commission has been pushing for net neutrality, but was blocked by a federal appeals court last spring, when the court ruled the FCC does not have the authority to make Internet service providers adhere to such regulations.

Since then, the FCC has been trying to get the major wireless carriers, Internet service providers and other key players together for talks in private to has out the issues tied to net neutrality. On Thursday, the agency said it is abandoning those efforts.

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