• by Wendy Davis , Staff Writer @wendyndavis, August 9, 2010

As expected, Google and Verizon have announced that they forged an accord about net neutrality that, they hope, will be used as a template for legislation.

And, despite the companies' insistence that the press mischaracterized the deal, it seems that the media got the deal almost entirely correct.

The companies today proposed that Internet service providers should be prohibited from degrading or prioritizing traffic that currently travels over the public Internet. But the most critical term of the proposal -- as noted last week -- is that ISPs would be allowed to prioritize managed services, which Google and Verizon are calling "differentiated online services."

The companies say that such services might include "health care monitoring, the smart grid, advanced educational services, or new entertainment and gaming options." In other words, should lawmakers adopt the proposal, ISPs would be able to devote a portion of their pipes to gaming, telemedicine or movie delivery. (A similar model already exists for IPTV, AT&T's U-Verse or Verizon's FiOS TV because the FCC classifies those services as cable, subject to Title 6 of the Telecommunications Act.)

Google and Verizon also said they don't think the government should require wireless carriers to follow non-discrimination principles.

The plan irks neutrality advocates, who say it would create a huge loophole. "They want to codify a world in which they can build this fast lane and it's not subject to traditional net neutrality rules," says Free Press managing director Craig Aaron.

He says that one fear is that all new investment by ISPs would go toward this new fast lane, instead of expanding the broadband pipes that are used for the public Internet. Neutrality groups also are unhappy with Google for its stance on wireless neutrality.

But for all of the anger at Google -- and the "Google-goes-evil" emails flooding the Web today -- the company can't singlehandedly (or even jointly with Verizon) make new public policy. That's still up to Congress and the Federal Communications Commission -- both of which are certain to be inundated with comments from other ISPs, Web companies and consumer groups. And, while anything can happen in Washington, it seems far more likely that the Google-Verizon pact will be taken as a starting point for talks rather than as a final template for new rules.