Sources: Net Neutrality Compromise Not Reached

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A brokerage firm report overstates that companies negotiating network neutrality rules have agreed to a compromise, according to two sources close to the discussions.

An analyst note from brokerage and banking firm Stifel Nicolaus, released Monday, suggested that companies and trade groups participating in net neutrality talks hosted by the Information Technology Industry Council (ITI) have come to a general agreement on net neutrality, including several contentious issues.

ITI began hosting net neutrality talks earlier in August, after similar talks fell apart at the U.S. Federal Communications Commission. The FCC cancelled additional discussions about net neutrality after Google and Verizon Communications released their own set of net neutrality proposals Aug. 9.

Companies involved in the ITI discussions are pressed for time because Thursday is the deadline for getting a draft proposal to the U.S. Federal Communications Commission for its September meeting, the Stifel Nicolaus report said. The FCC is expected to debate net neutrality rules at the Sept. 23 meeting.

Participants in the ITI negotiations have "reached a general agreement that provides additional concessions on the part of the network operators on wireless net neutrality, maintaining certain robustness of the 'public Internet,' and an expanded role of the FCC," said the report by Stifel Nicolaus analysts Rebecca Arbogast and David Kaut. Neither analyst was immediately available for comment.

The agreement is unlikely to satisfy public interest groups pushing for strong net neutrality rules and perhaps many Web-based companies, the report said.

Others involved in the discussions denied that participants have reached an agreement.

The companies involved in the ITI talks have made "significant progress," but participants are still working to reach a "final consensus," ITI President and CEO Dean Garfield said in a statement.

"We're focused on solidifying what unites us, incorporating new ideas and viewpoints, and, above all, delivering a series of constructive, pro-consumer and innovation-based principles that will only strengthen the Internet as we know it today," he said. "Past precedent shows that when we work together and integrate the best ideas in a coordinated fashion, the stronger the outcome."

ITI believes the group can reach common ground on which to build a "meaningful and consensus-based solution," Garfield added.

Companies and trade groups participating in the ITI talks reportedly include Microsoft, Verizon, AT&T, Cisco Systems and the National Cable and Telecommunications Association (NCTA).

Two other people with knowledge of the discussions but who requested anonymity also said companies have not yet reached consensus, despite the Stifel Nicolaus report. The companies have not met since Aug. 20, one source said.

The companies involved have not reached a specific agreement, although they have made progress, another source said. The companies and groups do agree on some basic concepts, but there's no formal language in place and more discussion will be needed, according to this person.

FCC Chairman Julius Genachowski called for the agency to draft formal net neutrality rules after a U.S. appeals court, in April, ruled that the FCC did not have the authority to enforce informal net neutrality rules in a case involving Comcast's throttling of some peer-to-peer traffic.

The FCC voted to issue a notice of inquiry on net neutrality rules in June. In a notice of inquiry, or NOI, the FCC seeks public comment on a topic. NOIs often lead to FCC rulemaking proceedings.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantusG. Grant's e-mail address is

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