Verizon Blinks

As we all know, Verizon went public on Tuesday with its agreement to allow Skype’s VoIP application to run on its network. There are still a few gotchas for Verizon subscribers who want the service, but in the world of telecom this is momentous. Faced with the FCC’s proposed rules for net neutrality and a new fifth principle of non-discrimination, Verizon (along with AT&T) has relented.

I’m happy that Skype user can make unlimited domestic VoIP calls to each other over Verizon’s network . I think it’s fair to say we can thank the FCC for taking a more vigorous approach to enforcing net neutrality on wireless networks. Back in October, a draft of proposed rulemaking included language for a new Internet principle of non-discrimination:

Subject to reasonable network management, a provider of broadband Internet access service must treat lawful content, applications, and services in a nondiscriminatory

The devil lurks in the details. While broadband access providers can’t charge content or application providers for specialized or prioritized access (that’s the FCC’s definition of non-discrimination), they are given significant leeway in managing their networks. In fact, the proposal includes a category of “managed or specialized services” that can encompass VoIP and video, but for which discriminatory pricing rules do apply.

This is to say, Verizon or AT&T wouldn’t be allowed to charge a content provider extra for improved access to  a generic web-page, but access providers could effectively create a new service class for a video site by defining it as a managed service.

N.B: Nothing in the proposed rule making prevents a broadband access provider from prioritizing IP packets as long it’s “reasonable network management”—for example, assigning a video packet lower priority to unblock congestion.

Again, I’m delighted about Verizon’s new openness on wireless VoIP.  Warning: much can change between now and when the final rules are decided on by the FCC, and new regulations will undoubtedly be challenged in the courts.

To get a flavor of the contentious possibilities, take a peek at the FCC comments from the CTIA, the wireless industry’s principle trade group. A single sentence should give you the flavor of the opposition:

Imposition of the proposed net neutrality rules will freeze the current business model for wireless services, stifling innovative technologies, service offerings and interactions among ecosystem players that benefit consumers.