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8/5/2010
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Google, Verizon Net Neutrality Talks Raise Ire

While industry and public interest groups protest secret FCC meetings, one industry observer says that potential Google-Verizon alliance is really about taking on Apple.

Google's Oregon Data Center
(click image for larger view)
Google's Oregon Data Center
The latest rumor out of the Federal Communications Commission -- that Verizon and Google are close to a deal on net neutrality -- has touched a raw nerve among industry players including public interest groups, who are protesting that too many negotiations at the FCC over broadband are being conducted in secrecy.

However, one close observer of the scene says any Verizon-Google deal is based on one thing: "Apple."

Stephen E. Arnold of Arnold IT, who has written several books and reports on Google, says that Google is desperate after several of its recent projects have flopped, including its failed answer to Apple's iPhone, the NexusOne phone, which has been withdrawn from the market

As for Verizon, Arnold asked in an interview Thursday: "Who is Verizon going to fall in love with? Google." Noting that Verizon's chief competitor, AT&T, has an exclusive lock on Apple's hot-selling products including its iPhone, it makes sense for Verizon to work out deals with Google. Verizon has been marketing several phones based on Google's open Android platform but most of the financial benefits have gone to Verizon and to phone makers like Motorola and Samsung, but not to Google.

Meanwhile, the FCC, thwarted by a court decision that limits its control over broadband, has been working in secret meetings with carriers and Internet content providers to find a compromise, yet keep some control over broadband delivery in its hands. A steady stream of rumors flows from the meetings -- the latest on net neutrality has Verizon agreeing not to interfere with some applications, like Google's YouTube.

Google CEO Eric Schmidt discussed net neutrality with CNET reporters on Wednesday at a technology symposium. "People get confused about net neutrality," said Schmidt. "I want to make sure that everybody understands what we mean about it. What we mean is that if you have one data type, like video, you don't discriminate against one person's video in favor of another. It's OK to discriminate across different types... There is general agreement with Verizon and Google on this issue. The issues of wireless versus wireline get very messy... and that's really an FCC issue not a Google issue."

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