One of Google's defenses is that there's no such thing as a neutral web search algorithm:
Google has recently brought in executives to discuss how neutrality can’t be achieved in search because the company’s algorithm is based on subjective factors to ensure users get accurate results.
I completely agree. A neutral web search is bound to be a bad web search. A good web search is heavily biased toward what the user wants, and any search provider is going to have to use their judgment on what the user will want.
However, I also feel the same about network neutrality. The Internet is not a star topology, where we route packets into a central router and then it spits them back out to other people connected to it. It's a complex network that no one in the world has a full map of. The routing decisions at each node can be quite complex, and good routers are almost never going to treat all packets the same. A neutral router is a bad router.
Additionally, I always felt the same way about browser neutrality. The best operating system shells have thorough integration with a web browser instead of just forking off a web browser application. It makes for a better user interface, and software engineers seem to agree if you look at what they build rather than their opinion on this case. There have been a number of good OSes with built-in browsers, including two by Google: Android and ChromeOS. A browser-neutral OS is a bad OS.
I hope Google does not get stuck with search neutrality provisions. I must say, though, that they invited the wolf into the hen house.