It's true that there's something going on between Google and Verizon regarding net neutrality, but it's not a business deal. While neither company is commenting specifically on what their discussions have been about, the information Google and Verizon provided makes the direction pretty clear.
The bottom line is this: Google would like to see network providers make provisions for certain types of traffic so that it can be delivered in a useful manner. Google is talking to Verizon because its FiOS service is very hot these days and provides very high-speed networking where consistent delivery is important for things like video.
This means that Google is looking for a way to have material such as video and voice services delivered with their priority set so that the material is still useful when it gets delivered. For example, if voice traffic suffers from too much latency or jitter in transit, it's nearly unintelligible to the listener. You've probably heard this kind of thing on a Skype call if you were on a bad connection or on a cell phone call when the cell user had a really crummy signal.
With video, delivery is also important, although interestingly it's not as sensitive to issues such as latency as voice. But when video doesn't get the delivery it needs, then you see the picture simply stop, or you see it dissolve into those blocks that you sometimes also see on your HDTV when an airplane flies over your antenna in just the right spot. But for reasons I won't go into here, our brains can deal with more interruption to video than to audio.
In either case, reliable delivery is important for these services to be usable. Google's belief, according to a statement made by CEO Eric Schmidt during an impromptu news conference on Aug. 4, is that network providers should be able to differentiate service types so that voice traffic gets delivered intact, for example, but not prioritize one provider's voice or video over another's.
What Schmidt is saying, in other words, is he thinks it's OK for networks to prioritize packets that need to be high priority due to their content. What this means is that network providers should be able to manage their networks to recognize packets that need to be a high priority for delivery and honor that priority.
If this sounds familiar it's probably because you're doing that in your enterprise already. You call it QOS (quality of service), and it's a critical feature for some types of traffic, especially the voice traffic that is handled by your VOIP (voice over IP) phone system. What Schmidt is suggesting is that Internet providers do the same thing.