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IDG News Service - Google and Verizon Communications have released a proposal that would give the U.S. Federal Communications Commission limited power to enforce network neutrality rules, including levying fines up to $2 million for violations by broadband providers.

Officials from the two companies, in an announcement Monday, said they hope to move the often-contentious net neutrality debate ahead with the recommendations. Under the proposal, broadband providers could not block or degrade Web traffic, although they could provide "differentiated online" services apart from the public Internet.

The proposal prohibits providers from "engaging in undue discrimination against any lawful Internet content, application, or service in a manner that causes meaningful harm to competition or to users." Prioritization of Internet traffic would be presumed as discriminatory, but broadband providers would have an opportunity to rebut that.

The proposal applies to the wired Internet, not wireless broadband, the companies said. The wireless broadband market is "still nascent," the companies said in a joint blog post. "We both recognize that wireless broadband is different from the traditional wireline world, in part because the mobile marketplace is more competitive and changing rapidly," the blog post said.

Under the proposal, the FCC would have authority to enforce existing net neutrality principles, but it would not have the power to create new rules, as the agency's chairman, Julius Genachowski , has proposed. The FCC would handle net neutrality complaints on a case-by-case basis, after the parties in a dispute attempt to resolve their differences through Internet community governance organizations.

The FCC would be "directed to give appropriate deference to decisions or advisory opinions of such groups," the policy proposal said.

An FCC spokeswoman didn't immediately respond to a request for comment.

The proposal would also require broadband providers to be transparent about the services and speeds they offer.

The announcement comes after days of rumors and news reports that the two companies had reached an agreement on how Verizon would handle Google's traffic. But the proposal is a set of recommendations to U.S. policymakers and broadband providers, and the proposal would not allow for any prioritization of Google's traffic on the public Internet, said Ivan Seidenberg, Verizon's chairman and CEO.

"There is no business arrangement, and reports that there was a business relationship are false, misleading and incorrect," said Eric Schmidt, Google's chairman and CEO.

Under net neutrality, or open Internet, rules, broadband providers would be prohibited from selectively blocking or slowing Web traffic.

"The original architects of the Internet got the big things right," said Alan Davidson, Google's director of public policy, and Tom Tauke, Verizon's executive vice president of public affairs, policy, and communications, in a blog post. "By making the network open, they enabled the greatest exchange of ideas in history. By making the Internet scalable, they enabled explosive innovation in the infrastructure."