In a controversial proposal, Google and Verizon on Monday paved the way for a "two-tier" Internet of the future, where small businesses could lose out because ensuring your services gets through will cost extra.

Not surprisingly, companies are already taking sides. Facebook, eBay, Skype and Amazon don't support the proposal. "Preserving an open Internet that is accessible to innovators -- regardless of their size or wealth -- will promote a vibrant and competitive marketplace where consumers have ultimate control over the content and services delivered through their Internet connections," said Andrew Noyes, a Facebook spokesman.

Meanwhile, AT&T – which could profit if there were a premium-priced Internet fast lane – called the proposal a "reasonable framework."

Companies such as Comcast haven't expressed views publicly – and many people seem unsure of what's at stake.
"All of our life goes through this network, increasingly," Allen S. Hammond IV, director of the Broadband Institute of California at Santa Clara University School of Law, told the New York Times. "If you can't reach your boss or get to your remotely stored work, or it's so slow that you can't get it done before you give up and you go to bed, that's a problem. People need to understand that's what we're debating here."

In the two-page proposal, Google and Verizon called for a new, premium connection which would let Internet service providers charge more for certain services over faster, higher quality lines. 

The two technology giants say their plans would still allow net neutrality, as it's called, because all web service on the Internet would be treated equally. Internet requiring high bandwidth – including services like 3D video and gaming – would be separate, and come at extra cost. Loopholes for mobile traffic and wireless services would allow competing applications and content to be blocked for users accessing the web through smartphones.

The announcement came less than a week after both companies insisted that they were not in the process of making a deal on the future of the Internet.

In a statement posted on both companies' websites, Google and Verizon said: "This means that broadband providers can work with other players to develop new service. It is too soon to predict how these new services will develop, but examples might include health care monitoring, the smart grid, advanced educational services, or new entertainment and gaming options."

The companies added: "Our proposal also includes safeguards to ensure that such online services must be distinguishable from traditional broadband Internet access services and are not designed to circumvent the rules."
The principles would not apply to wireless devices, a lucrative business for companies expecting growth in wireless broadband Internet services as more people use mobile devices like iPhones and BlackBerries. In the past, Google CEO Eric Schmidt has made his views on the mobile web clear, stating that Google will be following a "mobile-first approach," making the sector "fundamental to everything we do."

The nonprofit Free Press, which has fought for net neutrality, said the proposal would "divide the information superhighway, creating new private fast lanes for the big players while leaving the little guy stranded on a winding dirt track."

In a December letter, some 100 small-business owners urged the Federal Communications Commission to adopt a strong net neutrality stance.

"Net neutrality lowers the barriers of entry for entrepreneurs, startups and small businesses. It's because of net neutrality that small businesses and entrepreneurs have been able to thrive," said the letter.

The chief executives of Google and Verizon said their proposal does not represent a business arrangement between them, and that they hope the proposal could be used as a model for possible congressional legislation.

Google and Verizon said the FCC should have full authority over the rules, including the ability to impose up to $2 million fines on companies that violate the proposed rules.