Google, the world's largest internet business, and Verizon, the largest wireless network provider in the U.S., have long waged war over net neutrality.  As Google explored wireless options it resisted Verizon's notion of throttled traffic.  Likewise, as Verizon expanded its wireless traffic it looked to pursue throttling and other strategies to prevent "overuse".

Now the pair has worked out their differences and formed a private pact that may shape the way internet access is provided across America.

Verizon spokesman David Fish states, "We’ve been working with Google for 10 months to reach an agreement on broadband policy.  We are currently engaged in and committed to the negotiation process led by the FCC."

According to The New York Times and The Wall Street Journal, Google has essentially turned its back on net neutrality in the mobile sphere and is now working with Verizon to roll out a tiered scheme that would see internet content providers like YouTube get faster service for paying more, and smaller sites regulated to the slow lane.

Mistique Cano, a Washington-based Google spokeswoman, would not confirm or deny an agreement had been reached.

Under the agreement, according to sources cited by Bloomberg, Verizon would agree not to selectively slow traffic -- such as video streams -- through its wired connections.  However, it would remain free to apply selective slowing (throttling) as necessary on its wireless connections, to preserve service.

The agreement comes as the Federal Communications Commission (FCC) looks to iron out net neutrality legislation to go before Congress.  The FCC is working with Google, Verizon, AT&T, and others to come to a proposal that's comprehensive enough, but that everyone can live with.

Any FCC agreement would likely require AT&T, who made it clear that it was not on board with Verizon and Google's pact.  Jim Cicconi, AT&T senior executive vice president, wrote, "AT&T is not a party to the purported agreement between Google and Verizon.  We remain committed to trying to reach a consensus on this issue through the FCC process."

Google and Verizon may have been at-time enemies on the issue of net neutrality, but in the grand scheme of things they enjoy a close relationship.  Verizon is among the largest carriers of handsets employing Google's wildly successful operating system Android, which recently passed the iPhone's version of OS X to become the most used smart phone operating system in the U.S.

Andrew Jay Schwartzman, senior vice president of the Washington-based Media Access Project, a watchdog legal firm, remained skeptical of the deal, commenting, "What is good for Google and Verizon is not necessarily good for innovation and competition on the Internet."