Last updated: August 7, 2010 12:31 am

Washington’s passion for Google cools

If it is true – as many believe – that the political elite in Washington have been engaged in a love affair with Google since Barack Obama’s campaign for the White House, then it is also true that the US president is now beginning to notice some wrinkles and warts on his beloved.

Although the faltering economic recovery has taken centre stage in Washington ahead of November’s midterm elections, Google this week appeared to have created some fresh problems for the administration.

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The news that Google had struck a deal with Verizon, the US telecoms group, over how the companies will manage internet traffic was seen by many in Washington as a lethal blow to attempts by the White House to fulfil a campaign promise to a key subset of voters: the active and vocal “netizens” who support the passage of net neutrality legislation, a law that would ensure that all internet traffic be treated equally. The details of the deal have yet to be announced but are expected to contain provisions that are at odds with the administration’s position.

In this arcane fight, the administration had been seen as being in step with Google against the telecoms and cable companies that have lobbied against net neutrality.

In Washington, Google’s surprise move is largely – but privately – viewed as a vote of no-confidence in Julius Genachowski, the beleaguered chairman of the Federal Communications Commission. Mr Genachowski, who was appointed by Mr Obama, has taken heavy fire from public interest groups for trying to negotiate an industry-wide pact on net neutrality behind closed doors. He called the talks off after news emerged that two of the principal parties had reached their own deal.

The subsequent rift is the biggest sign yet that the relationship between Google and the administration is becoming more adversarial.

“Those early days, where the company can do no wrong, are now behind them,” says Rebecca Arbogast, a telecoms analyst at Stifel Nicolaus in Washington.

“I think that there is probably a broad sense of frustration at the FCC that they did not come up with a deal. There will be, I expect, a continued air of suspicion around Verizon/Google.”

In other quarters of Washington, the Federal Trade Commission – the consumer protection watchdog – is taking a harder look at Google and whether internet privacy rules need to be updated.

The company is facing probes into its admission in May that it had mistakenly collected information from unsecured wireless networks.

Now, industry insiders on Capitol Hill and at the FCC are questioning Google’s motives for an apparent about-face on its position as one of the most powerful advocates of net neutrality.

The move has at least temporarily diminished the standing of Mr Genachowski. He is facing intense criticism from rank-and-file Democrats on Capitol Hill who object to his plan to issue tough new regulations of the broadband industry, a move that was seen as heavily supportive of Google.

Now that the search company has made its own arrangements, Mr Genachowski is not expected to move ahead with the plan, although the FCC says “all options are on the table”.

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