On Monday, Google and Verizon—two of the nation’s biggest companies operating in the tech space—announced a compromise joint proposal on Internet regulation that has tech policy observers buzzing.

The proposal, discussed during a conference call featuring Google CEO Eric Schmidt and Verizon CEO Ivan Seidenberg, represents a substantial softening of Google’s position on controversial net neutrality proposals, say several tech policy observers.

Notably, while enshrining non-discrimination rules with regard to what is often referred to as “traditional Internet broadband service,” the proposal also allows broadband providers to offer what are known as “differentiated services,” such as Verizon’s FiOS service, which need not be neutral.  This is being interpreted in some quarters as a major shift on Google’s part.

The company took fire yesterday from Free Press, a pro-net neutrality group that some tech policy experts have speculated for years took money from Google to finance its advocacy efforts, which helped promote an approach that observers say could, if adopted and enforced, have benefited the corporation substantially.  In a statement, Free Press adviser Joel Kelsey remarked that “If codified, this arrangement will lead to toll booths on the information superhighway.”

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Amazon.com, the online retailing powerhouse, last week announced a shift in stance on net neutrality that has tech policy observers in the nation’s capital buzzing.

The company, a long-time backer of the controversial policy and member of the pro-net neutrality Open Internet Coalition, signaled in an op-ed by its Vice President for Global Public Policy, Paul Misener, openness to a compromise measure, which would allow what are known as “managed services” to be offered by Internet Service (ISPs) subject to certain conditions.

Specifically, Misener argues that “Internet content providers (and consumers) should be able to purchase ‘quality of service’ or ‘managed services’ from network operators on the same basis–equal availability and no harm to other content.”

Previously, net neutrality proponents had been unwilling to sanction the marketing of such services, irrespective of equal availability or non-prejudicial impact—a position still held by many on the “pro” side of the debate.

The shift was therefore dubbed a “major departure” by one expert tracking the net neutrality debate with whom Capitol Confidential spoke, and one that could have significant ramifications for the way the net neutrality battle plays out moving forward.

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Last week, three major Internet Service Providers (ISPs) and five industry trade associations sent a letter to Federal Communications Commission (FCC) Chairman Julius Genachowski urging him to ditch what has come to be known in some tech policy circles as the FCC’s own version of “deem and pass”—the infamous process that first reared its head in the context of Congress passing Obamacare earlier this year.

Following a recent, unfavorable Appeals Court decision, observers say Genachowski has been eagerly pursuing a back-door, out-of-sight pathway to achieving a long-time, personal objective: Regulation of the Internet via the institution of so-called Net Neutrality rules.  Reclassifying Internet services as “telecommunications services” would enable him to do just that—though with increased public opposition to Net Neutrality having been voiced during an FCC public comment period that recently closed, and recent polling showing relatively weak support for the policy, it remains a risky option both from a public relations, and political standpoint.

For their part, the ISPs, who together with other members of a broad coalition including a prominent labor union, minority and civil rights groups, and several high-profile Democrats oppose the move, are determined to ensure that Genachowski’s preferred course of action does not go unnoticed, whether the FCC ultimately does “deem and pass,” or not.

The letter, signed by AT&T, Verizon, Time Warner Cable and the trade groups both focuses attention on what Genachowski is alleged to be planning, and seeks to debunk some of the talking points being used by supporters of the proposed reclassification.  Chief among those is the argument that the current arrangement, whereby Internet services are not classified as telecommunications services, is the specific result of a policy instituted under the Bush administration, as opposed to a standard that has existed for what one tech policy expert with whom Capitol Confidential spoke called “time immemorial.”  Per the letter, ”the commission has never classified any kind of Internet access service (wireline, cable, wireless, powerline, dial-up or otherwise) as a … telecommunications service, nor has it ever regulated the rates, terms and conditions of that service — Internet access service has always been treated as a Title I information service.”

It is an important point to make, said that same tech policy observer, because if reclassification is ultimately branded as a simple, administrative move designed to fix a bad Bush policy, the Democratic-majority FCC is more likely to approve the change.  If, however, reclassification is accurately viewed and depicted as constituting a “nuclear option,” invoked in smoke-filled backrooms, out of sight of the public, in order to placate Democratic-favorable companies and donors (including the Obama administration-cozy Google), it will be much harder—indeed potentially impossible— for the FCC to approve.

However, the difference between those two positions, and characterizations, could more than anything guarantee that the fight over reclassification could be knock-down, drag-out.  “Net neutrality supporters have a lot invested here,” says the tech policy observer with whom we spoke.  “They’re not prepared to go down without a fight, even if predicated on deeply questionable arguments.”

Conservative luminaries led by anti-abortion rights activist Phyllis Schlafly and anti-tax crusader Grover Norquist last Thursday penned a decidedly anti-Net Neutrality open letter to Members of Congress, in which they warned that the new regulations proposed by the Federal Communications Commission (FCC) would curb innovation and severely limit the ability of Internet Service Providers (ISPs) to prioritize valuable content over otherwise objectionable and obscene material.

“There is no evidence of a market failure to justify the burdensome government regulations some are proposing,” the letter read. “Unfortunately, it appears that a few FCC commissioners lack an understanding of how regulations affect investment.”

Proponents of the FCC’s proposed broadband rules note that the issue of Net Neutrality is one in which conservatives are purportedly split. The Christian Coalition of America, a social conservative advocacy group, endorsed the Left’s overtures at re-regulating the Internet.  Likewise, Gun Owners of America have also voiced support for the controversial policy.

But last week’s letter–whose signatories include the likes of American Family Association President Tim Wildmon, Tom McClusky of the Family Research Council, prominent Catholic Deal Hudson and Mrs. Schlafly–suggest the Right, as a virtually unified whole, has turned a page in the debate over a dynamic Internet, and now is staunchly and almost uniformly opposed to what some critics call “a government takeover of the Internet.”

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With the Federal Communications Commission (FCC) set to make a decision on proposed net neutrality rules later this year, the fight between supporters of the controversial policy and its opponents continues to heat up.

Yesterday, a group of minority and women’s organizations reportedly called on the FCC to give serious consideration to the impact that net neutrality could have on what has been termed the “digital divide”—the widening of which, opponents argue, constitutes a potential unintended consequence of the policy, and one which has become a primary focal point of net neutrality critics’ concern.  In a letter and a proposal to the FCC, the groups—which include minority organizations that have previously spoken out regarding the net neutrality issue such as the Asian American Justice Center—have asked for a field hearing and workshop addressing the topic.

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In the ongoing fight over proposed rules that would institute net neutrality, a major proponent of the policy is taking fresh heat from critics.  Google, arguably the world’s biggest name in tech, a major source of campaign donations to President Barack Obama, and one of the most prominent advocates of an “open internet,” is taking heat for alleged hypocrisy and rent seeking.

The criticism comes as the company continues to advocate for the Federal Communications Commission (FCC) to impose net neutrality rules that would target internet service providers (ISPs) while opposing so-called “search neutrality” that would impact both the company and its revenues in a manner that observers of the debate say could be particularly adverse to Google.

Last week, in a post on the official Google blog, the company’s senior vice president for product management, Jonathan Rosenberg, wrote that while Google’s “goal is to keep the Internet open,” it opposes the concept of “openness” where it would apply to its own search and ad products.

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On Thursday, the Federal Communications Commission will consider “a Notice of Proposed Rulemaking on policies to preserve the open Internet.” That’s a long way of saying that the FCC, led by Julius Genachowski, Obama’s old friend from Harvard Law School, will take its first steps towards forcing through net neutrality, a controversial policy that critics say would amount to a government takeover of the internet.

 
Internet Service Providers—the ones who have actually invested in the architecture and infrastructure that enables us all to access the internet—have long been opposed to net neutrality, as have conservatives and libertarians concerned about maintaining free markets and promoting innovation and quality service.  
 
But, with concerns that the FCC might now act to push net neutrality through, some voices less traditionally associated with opposition to the policy are speaking out regarding the proposed rulemaking, too.  In fact, a number of Democrats and groups typically aligned with the left—the online component of which has long treated net neutrality as a top three policy objective—seem to be feeling less than warm and fuzzy about increased government intervention with regard to the internet.

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