Federal Regulators Abandon Network Neutrality Pact

WASHINGTON (AP) — 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 reach an agreement on the thorny issue among a handful of big phone, cable TV and Internet companies. And it comes as two big companies that have been taking part in those talks — Verizon Communications Inc. and Google Inc. — try to hammer out their own separate proposal on 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 because the talks were confidential.

But according to one person close to the FCC talks, the deal also undermined the discussions taking place at the FCC. This person said FCC officials fear that the proposal from Google and Verizon does not do enough to prevent phone and cable companies from using their control over broadband connections to become online gatekeepers. FCC Chairman Julius Genachowski is seeking to adopt rules that would require phone and cable companies to give equal treatment to all broadband traffic.

"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."