Verizon-Google Proposal for Web Traffic: Statement by Consumers Union and Consumer Federation of America

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August 9, 2010

WASHINGTON, D.C. — Consumers Union, the nonprofit publisher of Consumer Reports magazine, and Consumer Federation of America today expressed serious concerns about a proposed arrangement by Verizon and Google to handle web traffic. Consumer groups have advocated for “net neutrality” rules to maintain an open Internet where consumers can choose web content and applications without restrictions imposed by their Internet service providers.

Ellen Bloom, the director of federal policy and the Washington D.C. office of Consumers Union, said, “Whenever you have two huge corporations trying to make a deal on something as important and far-reaching as the Internet, naturally, we’re concerned. The Internet should remain open so people can choose sites and services freely – that goes for today, and that should go for tomorrow, too. Internet service providers shouldn’t be giving preferential treatment to certain sites or services that pay for that treatment. That kind of deal could lead to a system similar to cable TV, where consumers have to pay for different levels of service and content. It could upend the open Internet we have now.”

Bloom continued, “We strongly urge the FCC and Congress to be very skeptical about this proposal, especially as it impacts consumers’ pocketbooks. Regulators and lawmakers should support an Internet that lets consumers choose the sites and services they want, and lets content creators compete on a level playing field, rather than simply letting the biggest companies call all the shots.”

Mark Cooper, the director of research for Consumer Federation of America, said, “The details of the Google-Verizon deal on network neutrality make it clear that the FCC had the good sense to walk away from the industry negotiations. The Google-Verizon approach requires a total abdication of oversight over discrimination and the abandonment of 100 years of successful policy to prevent discrimination in the U.S. Under the proposed Google-Verizon framework, the FCC would only be able to take action in the wireline space if a private party could show ‘meaningful harm’ against a list of loopholes a mile wide, and that action would be a fine of $2 million, a sum that Verizon earns in less than 2 hours. The advanced services loophole is so vague and poorly defined that it is an exception that would swallow any rule. In fact, under the proposal the FCC has no rulemaking authority. The FCC and the GAO would be relegated only to writing reports. In the wireless space there are no obligations whatsoever, except
information, which has been totally inadequate in this sector in the past.”

Cooper said, “The FCC must now move to assert jurisdiction, while the companies will no doubt run to the Hill and the courts, as they have in the past. We are confident that neither the courts nor the Congress will be willing to abandon the principle of nondiscrimination that has worked so well in the U.S. for over a century.”

Media Contact: David Butler, Consumers Union, 202-380-4317, dbutler@consumer.org