Verizon Communications Inc and Google Inc on Monday proposed principles for policing Web traffic, but stopped short of saying they should apply to wireless devices.
The proposal came after the Federal Communications Commission failed to broker an agreement among Internet service providers and Web companies on net neutrality.
Net neutrality is a term that means high-speed Internet providers should not block or slow information or charge Web sites to pay for a fast lane to reach users more quickly.
Google's and Verizon's chief executives said on a call with reporters that the 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.
As far as we're concerned, there would be no paid prioritization of any traffic over the Internet, said Verizon Chief Executive Ivan Seidenberg.
Seidenberg and Google CEO Eric Schmidt said regulators should police Internet service providers to ensure that they do not block or slow Internet traffic on phone lines.
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 smartphones and BlackBerries.
The FCC is trying to determine if net neutrality rules should apply to both land lines and wireless devices.
Telephone companies previously suggested that another agency with competition and consumer protection missions such as the Federal Trade Commission might be better suited to regulate broadband.
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.
Telecommunications companies say they oppose applying net neutrality rules to wireless devices because they want to manage their networks during times of heavy use, and to fight spam, viruses and child pornography and other harmful attacks.
The proposal comes after the FCC last week halted a series of meetings that started in June with industry stakeholders to reach a deal.
Last week, FCC Chairman Julius Genachowski said that any outcome, any deal that falls short of preserving the freedom and openness of the Internet for consumers and entrepreneurs would be unacceptable.
At the meetings, the hope among FCC officials and the companies was that if they could solve the net neutrality conundrum, the FCC would drop a proposal to reclassify broadband under stricter rules.
The FCC meetings were suspended after reports of the side deal between Verizon and Google, who found ways to route Internet traffic without the rest of the group.
The private meetings at the FCC involved Google, Verizon, AT&T Inc and other Internet companies.
(Reporting by John Poirier and Sinead Carew; editing by Andre Grenon and Robert MacMillan)