In an effort to put to rest reports in the NYTimes last week that they are collaborating on pay tiers for the internet, Google (NSDQ: GOOG) and Verizon Communications (NYSE: VZ) issued a manifesto today on ways to keep the internet open.

The thorniest of the seven principles was the fifth, which proposes to allow broadband providers to offer “differentiated online services,” meaning “that broadband providers can work with other players to develop new services.” On the conference call held by the two companies, Verizon CEO Ivan Seidenberg provided an example: What if the Opera wanted to stream all of its performances in 3D to users in the home. They may not want to use the public internet to ensure a certain level of quality, he explained.

Other examples were health-care monitoring, the smart grid, advanced educational services, or new entertainment and gaming options. “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.” To ensure the system is not abused, the FCC could monitor the development of these services “to make sure they don’t interfere with the continued development of Internet access services.”

The joint policy statement today doesn’t represent a financial or business arrangement between the two companies. Google CEO Eric Schmidt: “There is no business arrangement and reports to that end reports of an arrangement were false, misleading and incorrect. Both firms have met many times with the FCC, and Ivan and I have both spoken to the Chairman. They’ll review our policies and make comments.”

Schmidt continued: “Our goal is to set aside the debate, and recognize that we are extremely dependent upon each other. We need the networks that telecom companies provide, and they need the valuable applications and knowledge services that Google provide.”

Following the announcement, the Free Press, a nonpartisan organization focused issues related to the media, released the following statement from its Political Adviser Joel Kelsey. “Google and Verizon can try all they want to disguise this deal as a reasonable path forward, but the simple fact is this framework, if embraced by Congress and the Federal Communications Commission, would transform the free and open Internet into a closed platform like cable television. This is much worse than a business arrangement between two companies. It’s a signed-sealed-and-delivered policy framework with giant loopholes that blesses the carving up of the Internet for a few deep-pocketed Internet companies and carriers.”

The issue of network neutrality has been debated for years with no easy solution. The network operators, like Verizon, see demand for high-capacity bandwidth applications increasing, but still want to provide an equal and fair level of service to all of their customers. Meanwhile, application-makers, particularly startups, worry that if the internet prioritizes certain traffic over other traffic—because those companies have a financial agreement with the network operators—it will hurt the startups’ chances of reaching consumers.

To that end, Google and Verizon think they’ve come up with a set of principles that accomplish both. The two main elements are this:

1. Users should choose what content, applications, or devices they use, since openness has been central to the explosive innovation that has made the Internet a transformative medium.

2. America must continue to encourage both investment and innovation to support the underlying broadband infrastructure; it is imperative for our global competitiveness.

It’s unclear how much the “differentiated online services” could affect how the open-internet operates today. The second principle, which states that broadband providers would not be able to discriminate against or prioritize lawful Internet content, is expected to keep any foul play from occurring. “In addition to not blocking or degrading of Internet content and applications, wireline broadband providers also could not favor particular Internet traffic over other traffic,” it continued. Under Google-Verizon’s proposal, the FCC would be given the ability to enforce all of the principles.

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