Late Wednesday night, the New York Times dropped a bomb: According to unnamed sources, Google and Verizon–bitter opponents in the debate over net neutrality–had essentially abandoned their negotiations with the FCC in favor of working out a deal that would make both companies rich as hell while limiting Internet access for millions of consumers.

The two companies were “nearing an agreement that could allow Verizon to speed some online content to Internet users more quickly if the content’s creators are willing to pay for the privilege,” reported the Times’ Edward Wyatt, without attribution. “The charges could be paid by companies, like YouTube, owned by Google, for example, to Verizon, one of the nation’s leading Internet service providers, to ensure that its content received priority as it made its way to consumers. The agreement could eventually lead to higher charges for Internet users.”

If true, the news that Google had capitulated on its commitment to net neutrality would cast into doubt the company’s reasons for investing $1 million in lobbying Congress in the months since a circuit court ruled in April against the FCC’s attempt to institute net neutrality.

If true, the story meant that FCC Chairman Julius Genachowski had essentially failed to implement a signature policy that President Barack Obama had campaigned on.

If the news were actually true that Google and Verizon were plotting to upend the Internet, the Times story would have been been the biggest scoop on the net neutrality debate in recent memory.

But according to Verizon and Google, the story that appeared Thursday morning on the front page of the New York Times isn’t entirely true. And the only group that’s repeated Wyatt’s conjecture as gospel is the group that essentially wrote the net neutrality Bible: Free Press, a rabble of media reformers hell-bent on putting companies like Comcast, Verizon, and AT&T in a regulatory straight jacket.

“The New York Times is quite simply wrong,” a Google spokeswoman told PC Magazine. “We have not had any conversations with Verizon about paying for carriage of Google traffic. We remain as committed as we always have been to an open Internet.”

Verizon responded in kind. “The New York Times article regarding conversations between Google and Verizon is mistaken,” read a statement from the telecommunications company. “It fundamentally misunderstands our purpose. As we said in our earlier FCC filing, our goal is an Internet policy framework that ensures openness and accountability, and incorporates specific FCC authority, while maintaining investment and innovation. To suggest this is a business arrangement between our companies is entirely incorrect.”

Wyatt did not return a request for comment, and on Thursday, the Times published another story by the tech reporter on Genachowski’s reactions to the Grey Lady’s supposed scoop. “Any outcome, any deal that doesn’t preserve the freedom and openness of the Internet for consumers and entrepreneurs will be unacceptable,” Genachowski told reporters after cancelling a scheduled meeting in which Verizon, Google, and other interested parties were set to discuss the FCC’s net neutrality proposals.

The Times was not the only outlet to report talks between Google and Verizon. Bloomberg News reported that “The compromise as described would restrict Verizon from selectively slowing Internet content that travels over its wires, but wouldn’t apply such limits to Internet use on mobile phones, according to the people, who spoke yesterday and asked not to be identified before an announcement.” The Wall Street Journal reported that “People familiar with the negotiations said the companies have reached a tentative agreement on managing network traffic that could be announced as soon as Friday.”

But the Times was the only paper to suggest that the deal was unseemly, and that consumers would end up getting screwed.

Coincidentally, the media reform group Free Press was up bright and early the day the article hit newsstands with sensational responses to the allegations. “Does [FCC Chairman Julius Genachowski] really want to let Google and Verizon break the open Internet so they can rebuild it as a gated community that only serves their bottom line?” Free Press Communications Director Tim Karr wrote in a post published just after 7 a.m. on Thursday.

Titled, “Petition Chairman Genachowski to Do His Job,” Karr’s post on MediaCitizen.blogspot.com (a free blog network owned by Google), the post included links to a pre-filled out questionnaire and a petition that calls for Genachowski to end the private meetings the FCC has held with Google, AT&T, Verizon, and — believe it or not — Free Press.

Two hours later, Free Press President Josh Silver published a dramatic rant on the Huffington Post titled, “Google-Verizon Deal: The End of The Internet as We Know It.” Silver wrote, “the Google-Verizon deal can be summed up as this: ‘FCC, you have no authority over us and you’re not going to do anything about it. Congress, we own you, and we’ll get whatever legislation we want. And American people, you can’t stop us.’”

By midday, Free Press had blasted an e-mail to its subscribers that contained several identical paragraphs from Silver’s Huffington Post piece.

“Google is about to cut a deal with Verizon that would end the Internet as we know it,” read the Free Press e-mail. “According to a front-page New York Times story, the deal allows ‘Verizon to speed some online content to Internet users more quickly if the content’s creators are willing to pay for the privilege.’ It would create fast Internet lanes for the largest corporations and slow lanes for the rest of us.”

The only problem? Not even Wyatt was willing to conjecture this much. Instead of “would” or “will,” Wyatt wrote that the deal between Verizon and Google “could” lead to dramatic changes for consumers. In a matter of hours, Free Press took a piece in which a Times reporter had pontificated on what a deal might mean and carved it into proof-positive that Google and Verizon plan to “destroy” the Internet.

So while the Times sits back on haunches and refuses to address perceived inaccuracies brought to light by MSNBC and PC World, Free Press has more actionable plans in mind. In its mid-day fundraising e-mail, the group founded by neo-Marxist Robert McChesney called for disruptive behavior: “We’re starting a mass protest by Google users to stop these two companies from joining forces to sell out millions of people like us who use the Internet.”

“Google’s motto is supposed to be ‘Don’t Be Evil,'” reads Free Press’s e-mail. “But this deal puts the company in bed with the devil.”

FCC PUSHING FORWARD WITH NET NEUTRALITY