A $4.6 billion gamble made by Google back in 2007 caused the Federal Communications Commission to declare that smartphone users must be allowed to use their devices to connect computers or other gadgets to the Internet yesterday, and landed cellular carrier Verizon with a $1.25 million fine. That was the result of FCC charges that Verizon should not be charging extra for the act of “tethering” a smartphone’s mobile Internet connection to a computer. As well as charging $20 a month for that privilege, Verizon had reportedly pressured Google to block tethering apps from its mobile app store.
The FCC settlement was made under rules set in 2007, when it auctioned off a chunk of radio channels known as the C block for use for mobile communications. Verizon bought that for $9.63bn, but only after Google intentionally drove up the price to trigger conditions that restricted the eventual winner to allowing “open devices and open applications” on connections using it. It was those rules that caused the FCC to force yesterday’s settlement. Verizon has made C block radio frequencies a core part of its wireless data network.
That is correctly seen as a victory by those campaigning for “net neutrality”, who say it removes an egregious example of an internet service provider restricting what a person may do with a connection they are paying for. However, Google isn’t always on that side of the debate over net neutrality, or always on the opposite side to Verizon. In 2010 the two companies released a joint proposal for net neutrality legislation that argued wireless Internet connections should be largely exempt from such rules.