Net neutrality deal abandoned

FCC officials are said to fear that phone and cable companies could begin to use their control over broadband connections to become online gatekeepers.

Toby Talbot

WASHINGTON -- Federal regulators are abandoning efforts to negotiate a compromise on so-called "network neutrality" rules intended to ensure that phone and cable TV companies cannot discriminate against Internet traffic traveling over their broadband lines.

The announcement Thursday by the Federal Communications Commission ends weeks of FCC-brokered talks to try to reach an agreement on the thorny issue among a handful of big phone, cable and Internet companies.

And it comes as two big companies that have been taking part in those talks -- Verizon Communications Inc. and Google Inc. -- attempt to hammer out their own separate proposal for how broadband providers should treat Internet traffic.

Verizon and Google expect to unveil their proposal within days and hope it will provide a framework for net neutrality legislation in Congress, said several people briefed on the negotiations between the companies. They spoke on condition of anonymity.

But according to one person close to the FCC talks, the deal also undermined the discussions taking place at the FCC and progress that had been made toward an industry-wide compromise.

FCC Chairman Julius Genachowski wants to adopt rules to ensure that broadband subscribers could access all online content, applications, services and devices as long as they are legal.

"We have called off this round of stakeholder discussions," FCC Chief of Staff Edward Lazarus said in a statement. "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."

Network neutrality -- or open Internet rules -- are a centerpiece of the Obama administration's technology policy, but the issue has divided the technology and telecommunications industries.