Google and Verizon have released a joint proposal for legislation supporting an open Internet, refuting claims that the two companies were working on a deal that would let Google pay Verizon for special treatment for its content.

The companies laid out seven major points that they hoped the legislation would address. Many were aimed at issues relating to net neutrality.

In particular, the companies say their proposed legislation would forbid the type of agreement they were accused of making:

This means that for the first time, wireline broadband providers would not be able to discriminate against or prioritize lawful Internet content, applications or services in a way that causes harm to users or competition.

Importantly, this new nondiscrimination principle includes a presumption against prioritization of Internet traffic - including paid prioritization. So, in addition to not blocking or degrading of Internet content and applications, wireline broadband providers also could not favor particular Internet traffic over other traffic.

The proposed legislation would include a proviso that broadband providers could offer "additional, differentiated online services," possibly including "health care monitoring, the smart grid, advanced educational services, or new entertainment and gaming options." They note that protections would be in place to make sure these services weren't used to get around net neutrality laws.

However, it still sounds like the companies are leaving a loophole. As the companies write:

We both recognize that wireless broadband is different from the traditional wireline world, in part because the mobile marketplace is more competitive and changing rapidly. In recognition of the still-nascent nature of the wireless broadband marketplace, under this proposal we would not now apply most of the wireline principles to wireless, except for the transparency requirement. In addition, the Government Accountability Office would be required to report to Congress annually on developments in the wireless broadband marketplace, and whether or not current policies are working to protect consumers.

It sounds like things are being left open so that wireless carriers could still manipulate traffic, though the proposal states that carriers should be monitored and it should be easy for consumers to find out what's going on.

I was surprised to read in today's New York Times that Verizon and Google are on the verge of a deal to allow content creators to pay for special treatment online. The article claimed:

The charges could be paid by companies, like YouTube, owned by Google, for example, to Verizon, one of the nation's leading Internet service providers, to ensure that its content received priority as it made its way to consumers. The agreement could eventually lead to higher charges for Internet users.

It seemed like a strange move for Google. The company has previously criticized efforts to pass legislation that would end net neutrality.

Indeed, hours later there were denials from both Verizon and Google. Verizon's statement, attributed to executive director of media relations David Fish, is a bit obtuse:

The NYT article regarding conversations between Google and Verizon is mistaken. It fundamentally misunderstands our purpose. As we said in our earlier FCC filing, our goal is an Internet policy framework that ensures openness and accountability, and incorporates specific FCC authority, while maintaining investment and innovation. To suggest this is a business arrangement between our companies is entirely incorrect.

The explanation of Verizon's goal remains murky, but it's clear that the company didn't like the article.

Here's Google's denial, posted in the Twitter stream of its public policy team:

@NYTimes is wrong. We've not had any convos with VZN about paying for carriage of our traffic. We remain committed to an open internet.

It's possible I've been taken in by Google's sunshine-filled talk about open Internet standards, but in this case I believe these denials. Google's not afraid to take an advantage and press it, but I don't think straight payola is the company's style.

Google definitely wants the Internet to get faster--see any number of initiatives, including Chrome, Fiber, and the experimental protocol SPDY. But I doubt they'd pay Verizon anything to speed up delivery of YouTube content. It's more like Google to take that money and hire a bunch of engineers to figure out how to speed up YouTube with a new algorithm or protocol.

Verizon Wireless and Motorola officially launched the Droid phone this morning at an event in New York. The announcement confirmed the device specifications that leaked last week--and made official the phone's rumored $199.99 price.

Verizon's "Droid Does" ad campaign has already positioned the smartphone as a direct competitor to Apple's iPhone. The Droid's combination of features and price--which essentially match those of the iPhone 3GS--also put Verizon and Motorola in a strong position to challenge the prestige and smartphone market share that AT&T and Apple have enjoyed for the past two years.

Motorola's new Droid is the first smartphone to run Google's Android 2.0 OS. (Courtesy Motorola)

The Droid is the first device to run the second generation of Google's Android operating system, which the company released to developers yesterday. Android 2.0 adds support for the ubiquitous Microsoft Exchange e-mail server and makes it easier for users to access contacts and multiple e-mail accounts. Android 2.0 also supports HTML5, the next major revision of the core markup language of the Web; eventually, the W3C hopes that HTML5 will replace the need for proprietary "rich-content" plugins such as Adobe's Flash and Microsoft's Silverlight.

A few of the Droid's features--such as a physical keyboard, built-in voice recognition for many applications, and multitasking--could give it a slight edge over the iPhone. The biggest potential advantage, however, is Verizon's 3G network, which is much larger than AT&T's. iPhone owners tend to use much more bandwidth than other AT&T customers, which has slowed Web browsing, e-mail syncing, and overall application performance, as well as increasing the number of dropped calls that users experience. Currently, many users and analysts assume that Verizon will be better able to support the network traffic that such a device generates--but just how well remains to be seen.

The Droid is the first Verizon smartphone that will support outside applications. Indeed, the number of applications available is one area where Apple is likely to maintain a significant edge over Google, at least for a while. Apple has already approved more than 100,000 applications for download from its iPhone App Store; Google is its next closest competitor, with just over 10,000 applications available in its Android Marketplace.

Analysts are skeptical that Apple will hold the lead, however, as the Droid is just the first of a wave of Android phones expected from major carriers such as Verizon Wireless. On Tuesday, research and consulting firm Gartner predicted that Google's Android platform will be more popular than the iPhone OS by 2012.

The iPhone has radically changed the smartphone game in just over two years; I can't wait to see what some solid competition does for the field.