FCC painted into corner after fallout over Google-Verizon talks

No one ever wants to be too close to an issue too hot to handle - and that’s especially true in Washington.

So it should come as no surprise that rumors of a deal between Verizon and Google and the subsequent fallout has now prompted the FCC to immediately halt private meetings with the tech and telecom giants, which had been working with the FCC to establish broadband policy. In a statement, via the Washington Post’s PostTech blog, Eddie Lazarus, the chief of staff to the chairman of the FCC, said:

We have called off this round of stakeholder discussions. It has been productive on several fronts, but has not generated a robust framework to preserve the openness and freedom of the Internet – one that drives innovation, investment, free speech, and consumer choice. All options remain on the table as we continue to seek broad input on this vital issue.

The FCC took this action even after Verizon went on-the-record with a blog post of its own to say once and for all, that a New York Times report about the rumored Google-Verizon deal was incorrect.

Bernstein analyst Craig Moffett sums up the FCC-Google-Verizon flap nicely in a missive:

Two nights ago, it was reported on Bloomberg that Verizon and Google had reached a bilateral agreement on net neutrality. With few details reported at the time, the accord was arguably a positive sign for ongoing negotiations between a larger group that included not just Google and Verizon, but also AT&T, the NCTA, the Open Internet Coalition, and Skype.

But then the New York Times reported the details. And as soon as it was reported that Google had agreed to paid-for prioritization, it was over. Perhaps we’ll never know whether the Times story was planted as a torpedo for the broader negotiations, whether the Times misconstrued a less ambitious agreement to allow for managed services, or whether Google and Verizon simply badly miscalculated the inevitable reaction (or even the more Machiavellian prospect that one of them intentionally agreed to a deal they knew would be untenable as a way to derail the process). In any case, both parties immediately denied the story. But it was too late.

The inevitable firestorm left the FCC no choice but to call an end to the festivities. From the beginning, the negotiations were fraught with procedural, legal, and tactical pitfalls. Ultimately, it was the political pitfalls of negotiations that doomed the process. Yesterday’s end to negotiations simply made it official. Note that it was the FCC that “canceled” the negotiations.  It was not the companies themselves.

In any case, it now seems that the FCC is painted into a corner. In a burning building. Made of wood.

Why is it so important for the FCC to take this sort of extreme action? In part, it’s because the the issue is too hot and the controversy is far from over. This topic is too hot to be over and the FCC doesn’t want anything resembling a scandal landing at its doorstep again anytime in the future.

So rather than hear directly from the companies that will be on the front lines of any new broadband policy, the FCC is going to close that door. That’s too bad. Washington - if it wants to do this one right - really needs the input of the tech community. After the Comcast ruling, the FCC lost a lot of its rule-making and enforcement powers, a vulnerability that shows that it needs to work with tech, not against it.

As we now know, lacking a set of rules of guidelines from the federal government, the companies themselves are willing to work out an agreement of their own (even though the official word is that they haven’t reached a deal.)

Things change daily with this story, but for now Washington is trying to keep its fair distance from the heat. Burning buildings just aren’t much fun.