Google has proposed seven principles that it hopes will be adopted by U.S. rulemakers in their quest for a net neutrality framework. (Paul Sakuma/Associated Press)

Google and U.S. telecommunications giant Verizon have jointly proposed rules they say will preserve internet neutrality in the United States, although the companies' suggestions won't apply to wireless services.

The two companies on Monday announced seven principles for U.S. regulators to use when crafting so-called net neutrality rules.

The suggestions include the prohibition of wired broadband providers from discriminating between different kinds of internet traffic, a rule that would also prevent charging content providers extra fees for prioritized traffic.

The other proposed rules include requiring internet service providers to be transparent in how they manage and monitor internet traffic and a clarification of laws that would allow the Federal Communications Commission to impose penalties of up to $2 million US for net neutrality transgressions.

Protecting consumers a goal

The new rules would not initially apply to the wireless internet in order to preserve the incentives for service providers to continue investing in what is a relatively new technology, the companies said.

"In recognition of the still-nascent nature of the wireless broadband marketplace, under this proposal we would not now apply most of the wireline principles to wireless, except for the transparency requirement," wrote Google and Verizon executives on the search company's blog.

"In addition, the Government Accountability Office would be required to report to Congress annually on developments in the wireless broadband marketplace, and whether or not current policies are working to protect consumers."

The net neutrality rule suggestions are similar to those implemented in Canada by the Canadian Radio-television and Telecommunications Commission last year. The CRTC's rules, however, are stricter in that they apply to wireless internet services as well as wired.

U.S. regulators last week halted talks between parties to come up with a compromise for net neutrality rules after reports surfaced that the various parties involved were trying to cut back-room deals without input from consumers.

The FCC said that while the talks were productive, they had not resulted in a framework that would "preserve the openness and freedom of the internet."

The FCC is expected to draft its own set of rules.

The rules suggested by Google and Verizon, however, stand in contrast to the fears raised by newspaper reports and consumer groups last week. The New York Times reported that Google and Verizon were working on a deal that would allow content providers such as Google to pay ISPs such as Verizon for faster delivery of their content, an option expressly prohibited in the companies' suggestions.

Regulator's authority challenged

Net neutrality gained poignancy in the United States in 2007 when cable provider Comcast began blocking peer-to-peer traffic, a commonly used system for sharing files online.

The FCC imposed sanctions against the company, but Comcast challenged the regulator's authority in court. Authorities have been struggling with the issue since.

In Canada, a similar situation arose in 2007 when Bell Canada began slowing peer-to-peer traffic.

The dispute between Bell and its wholesale customers resulted in the CRTC issuing net neutrality rules that prohibit discriminatory practices, but allow network management as a last resort to combat congestion.