Dual Verizon CEOs deftly dance on both sides of net neutrality

At about the same time Verizon Wireless CEO Lowell McAdam was preparing to issue a joint statement with Google, of all companies, signaling his company's support of the FCC at least opening up the floor to debate on proposed net neutrality legislation, Ivan Seidenberg, the CEO of parent company Verizon Communications, told attendees at the Supercomm conference in Chicago (as covered by CNET's Marguerite Reardon) that regulating net neutrality itself is "a mistake."

While bloggers noticing McAdam's signature alongside that of Google CEO Eric Schmidt took it to mean that Verizon had actually switched sides on the issue (again, folks, it's a good idea to read the whole story), it's clear that the intent of the joint statement was to demonstrate the company's willingness to come to the table and debate the issue civilly, and to listen to Google's side of the argument as well. But McAdam's fingerprints were all over sentence #2, which acknowledges that his company still disputes "whether mobile networks should even be part of the discussion" -- in other words, whether the FCC has the right to use net neutrality as a springboard for regulating Internet commerce and transactions.

The joint statement listed six elements of common agreement between Google and Verizon, first and foremost being the rights of individuals to decide how they choose to use the Internet. Point three does represent some moderation on Google's part, by agreeing that in certain respects, "net neutrality" legislation may already have been enacted: "The FCC's existing wireline broadband principles make clear that users are in charge of all aspects of their Internet experience -- from access to apps and content. So we think it makes sense for the Commission to establish that these existing principles are enforceable, and implement them on a case-by-case basis."

The statement goes on to propose that broadband providers should be able to use management methods of their choice for dealing with traffic issues and malicious content, so long as they "don't unreasonably discriminate in ways that either harm users or are anti-competitive." The meaning of "unreasonably" in this instance was left for further discussion.

Certainly the benefit in issuing this statement, both for Verizon Wireless and parent Verizon, is that the customer will probably be less likely now to perceive Verizon as "anti-net neutrality." It can still be against FCC regulation of wireless industry management practices, but today's reframing of the subject gives Verizon a happier face for the general public -- by painting Google's smile on its own face.

Meanwhile, as the t's were being crossed on the joint statement, Seidenberg was telling Superconn his belief that regulations as they are currently proposed draw too hard of a distinction between service providers and content providers, as if they'll always be in two camps. (Comcast, with aims to possibly purchase a majority share of NBC Universal from parent company GE, would certainly say no to that.)

As CNET quotes Seidenberg as saying, "Proponents [of net neutrality] have a worldview that network providers and application providers, like Google, occupy different parts of the Internet: dumb pipes versus smart apps. This is a mistake pure and simple. It's an analog idea for a digital world."

What's missing from this understanding, Seidenberg went on, is the positive role of "smart networks" -- the ability for more highly developed equipment to use sophisticated, perhaps even AI techniques for making adjustments to bandwidth allocations, in order to ensure quality of service.

In his dissent from today's FCC rulemaking order, also published today, FCC Commissioner Robert McDowell (perhaps not coincidentally) spoke to this exact same point: "One of my concerns regarding today's Notice is that its premise looks at innovation in a way that could actually deepen the division between applications and networks precisely at a time when the market is sparking unprecedented convergence between the two," Comm. McDowell wrote. "For instance, many proponents of network management regulation speak of unfettered innovation at the 'edge' of networks -- such as on consumers' personal computers and wireless devices -- while the freedom to innovate 'in the middle' of networks should be more limited due to concerns regarding potential anticompetitive conduct by network operators. Today's Notice and its proposed rules could be viewed as operating from a similar premise, however, which could produce counterproductive results. Constructive public policy should subscribe to the philosophy that unfettered innovation should be encouraged equally at all points of the network -- at the edge and in the core.

"As a practical matter, it is fast becoming impossible to separate the two," McDowell continued. "Consumers are telling the marketplace that they don't want networks that operate merely as 'dumb pipes.' Sometimes they want the added value and efficiency that comes from intelligence inside networks as well. Those who oversimplify this issue as a zero sum scenario between a dumb pipe and smart edge versus a smart pipe and dumb edge offer only a false choice that does not reflect the realities of today's market. I hope that yesterday's joint blog post between Google and Verizon Wireless on the importance of the consumer Internet experience is the start of continued collaboration and dialogue among these two communities."

The FCC's proposals come the day after Canada's counterpart to the Commission, the CRTC, issued its final rules for regulating net neutrality. Unlike the FCC's proposed rules, the extent of which is still being determined, the CRTC limited itself to dealing with network management practices. Under Canada's new rules, according to the CBC, service providers would be allowed to institute even "traffic shaping" -- among the smartest of the smart apps -- to prevent congestion on a limited basis, but only after demonstrating to the CRTC how such measures will achieve their purpose without limiting consumers' choice of Internet applications, and after the CRTC has issued a final approval.