The US Federal Communications Commission has called off negotiations with major players in the Internet industry aimed at reaching a compromise on Net neutrality.
Net neutrality has been an abiding principle behind the development of the Internet. It dictates that all types of data - whether from email, web sites or voice communication - are given equal priority by carrier networks.
The idea has recently come under question, with some voices in the industry lobbying to give greater priority to time-sensitive traffic such as IP telephony. US telecoms industry watchdog the FCC had entered into closed-door negotiations, hoping to reach an amicable solution between competing lobbies.
Now those talks have come to an abrupt end. The catalyst behind the FCC chairman Julius Genachowski's decision to suspend negotiations appears to have been reports of a secret deal between Google and US wireless carrier Verizon, to offer preferential treatment of the search giant's traffic.
The deal, if approved, could have led to the creation of a two-tier Internet, with a 'fast lane' for big corporates and slower connections for everyone else.
Both companies have denied that any such agreement was reached.
"What is good for Google and Verizon is not necessarily good for innovation and competition on the Internet," said Schwartzman. "What the two companies have in common is that both are incumbents with dominant positions in their markets. It's no wonder they are prepared to strike a deal that protects their market position at the detriment of the next Verizon and the next Google."
An industry source cited by the Washington Post suggests the FCC will have to go back to square one, with the FCC's role returning to one of old-fashioned regulation, rather than being "a facilitator of business-to-business dialogues".
In the UK, telecoms regulator Ofcom is currently in talks with ISPs and other interested parties about the issue of Net neutrality. The consultation is due to end in September.