Sen. Orrin Hatch of Utah, the top Republican on the Judiciary Committee, was among the most significant shifts. He said in a statement Wednesday afternoon that the bill is “simply not ready for prime time.”

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“The settlement would alter the landscape of copyright law, for millions and millions of rights holders of out-of-print books,” Peters said. “It would flip copyright on its head by allowing Google to engage in extensive new uses without the consent of the copyright owner–in my view, making a mockery of Article One of the Constitution, that anticipates that authors shall be granted exclusive rights.”

The settlement, as Peters sees it, will allow Google (GOOG) to profit from the work of others without prior consent. “It could affect the exclusive rights of millions of copyright owners, in the United States and abroad, with respect to their abilities to control new products and new markets, for years and years to come,” she said. “In essence, the proposed settlement would give Google a license to infringe first and ask questions later, under the imprimatur of the court.”

One of the more blistering attacks on the deal to date, especially given its source: The nation’s top copyright official. But Google nevertheless dismissed it as unfounded: “We think the settlement is legal, and we think it is structured well within the guidelines of what you can do in a class action settlement,” David Drummond, Google’s chief legal officer, said during the hearing. “It certainly is not usurping Congress’s authority to do whatever it wants.”

A typically arrogant response from Google, though the company does appear to be conceding a bit of ground in the face of widening opposition to the deal. Responding to Peters’s criticism and claims that the deal will essentially grant Google a de facto monopoly over out-of-print books, Drummond said the company plans to make those works available to any book retailer.

“For the out-of-print books being made available through the Google Books settlement, we will let any book retailer sell access to those books,” Drummond told the committee. “Google will host the digital books online, and retailers such as Amazon, Barnes & Noble or your local bookstore will be able to sell access to users on any internet-connected device they choose.”

Sadly for Google, that conciliatory gesture did not go over well with critics of the deal. “The Internet has never been about intermediation,” Paul Misener, Amazon’s vice president of public policy, said of the company’s offer. “We are happy to work with rights holders without anyone else’s help.”

The Internet Archive’s Peter Brantley was even more disdainful. “I fail to see what’s really new here,” he told the Los Angeles Times. “It’s like Macy’s telling Sears, ‘You can sell Macy’s clothing.’ There’s no fundamental change of the conditions under which Macy’s acquires those clothes. Google remains in control.”

Yesterday, BoomTown went to Washington, D.C. to see lawyers from Microsoft (MSFT), Yahoo and Google face off in Senate hearings about the controversial search advertising outsourcing deal recently struck between Yahoo (YHOO) and Google (GOOG).

Titled “The Google-Yahoo Agreement and the Future of Internet Advertising,” the hearings were called by the Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights and chaired by Sen. Herb Kohl (D., Wis.).

As I expected, the hearings on the Yahoo agreement with Google (transcripts of testimonies here) to outsource some of its ad search business were a lot of show and not so much content.

There was also a hearing for the House’s Task Force on Competition Policy and Antitrust Laws, called “Competition on the Internet,” which featured the same trio of execs.

And here’s a video of BoomTown chatting up Google’s Chief Legal Officer David Drummond, Microsoft’s General Counsel Brad Smith and Michael Callahan, general counsel for Yahoo, right after the Senate hearings were over.

Please see this disclosure related to me and Google.

Today, BoomTown boards the Acela Express from New York’s Penn Station to D.C.’s Union Station to attend the Senate hearing on the Yahoo agreement with Google to outsource some of its ad search business.

Titled rather ominously, “The Google-Yahoo Agreement and the Future of Internet Advertising,” the Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights (eek!) will hear testimony at 10:30 a.m. at the Dirksen Senate Office Building from a passel of Internet reps, including those from Yahoo, Microsoft and Google.

It is chaired by Sen. Herbert Kohl (D., Wis.).

Will there be a lovely video of event? Indeed, there will be!

Added plus: I went to college and even worked on Capitol Hill, all before toiling at the Washington Post (Hey, Marcus!) for a dog’s age, so I know my way around the place.

And, as BoomTown readers might recall, I am not for the deal, mostly because it gives Google even more market power, even though the partnership is limited.

As I wrote:

As someone who has been a longtime critic of Microsoft’s (MSFT) historically thuggish tendencies, BoomTown finds it a little hard to believe that Yahoo and Google think that they can get away with any kind of significant search-ad outsourcing deal that would move the needle at Yahoo … .

And while it might be a long-cherished dream of Google’s to take over Yahoo search–and also get the chance to return to the scene of the crime, since Google got its first big push from doing Yahoo search, before Yahoo (YHOO) wised up too late–there is simply no way this will be allowed by regulators. Nor should it.

Still, you have to almost admire the chutzpah of the search giant in making this move, if the sheer and unadulterated arrogance of it wasn’t so distracting.

Because, while Google (GOOG) has almost none of the obvious menacing aggression that characterized Microsoft when it thoroughly dominated tech (although all those beach bikes on its campus inexplicably creep me out a little bit), the company still cannot be allowed to have a monopolistic share of the market.

It is bad for advertisers, it is bad for consumers, it is bad for innovation, no matter how well-intentioned Google is.”

So, you might imagine, I am looking forward to biting into this tasty piece of political theater!

Here is the list of speakers:

David Drummond
Senior Vice President
Corporate Development and Chief Legal Officer
Google
Mountain View, Calif.

Michael Callahan
General Counsel
Yahoo!
Sunnyvale, Calif.

Brad Smith
Senior Vice President and General Counsel
Microsoft
Redmond, Wash.

Matthew Crowley
Chief Marketing Officer
Yellowpages.com
Glendale, Calif.

Tim Carter
President and CEO
Askthebuilder.com
Cincinnati, Ohio

Please see this disclosure related to me and Google.