Gemara

(Mishnah) Question: What is the earliest time to say the morning Shema?

Answer #1: It is when it is light enough to distinguish between Techeles and white;

Answer #2 (R. Eliezer): It is when one can distinguish between Techeles and (the color of green) leeks, and lasts until Netz (sunrise).

(Beraisa - R. Meir - Answer #3): It is when one can distinguish between a wolf and a dog;

Answer #4 (R. Akiva): It is when one can distinguish between a donkey and a wild donkey.

Answer #5 (Acherim): It is when one can recognize a friend four Amos away.

(Rav Huna): The Halachah follows Acherim.

(Abaye): The Halachah follows Acherim regarding the time for Tefilin. It follows Vatikin (pious people) regarding Shema:

(R. Yochanan): Vatikin finish the morning Shema at Netz.

Support (Beraisa): Vatikin finish Shema at Netz, in order to be Somech Ge'ulah to Tefilah (begin Shemoneh Esreh right after Ga'al Yisrael), and to pray during the day (according to all opinions).

(R. Zeira): They learn from "Yira'ucha Im Shamesh."

Menachos 43b (Beraisa #1): "U'Re'isim Oso u'Zchartem" - you should see it (the Techeles) and remember a Mitzvah that depends on Techeles, i.e. Keri'as Shema;

(Mishnah): The time to read Keri'as Shema (in the morning) is when it is light enough to distinguish between Lavan and Techeles.

Rishonim

Rif (4b): Rav Huna rules like Acherim. Abaye said that regarding Keri'as Shema we follow Vatikin. They would be Somech Ge'ulah to Tefilah and pray immediately, during the day. Not everyone can do so. Even so, it is a Mitzvah to read Shema a little before Netz, in order that he will pray after Netz during the day, even if it is not exactly at Netz.

Rambam (Hilchos Keri'as Shema 1:11): The Mitzvah of daytime Keri'as Shema is to begin reading before Netz, in order that he will finish and say the last Berachah (after Shema) with Netz. This is about [a tenth of] an hour before the sun rises. If one delayed and read Shema after Netz, he was Yotzei.

Rosh (Berachos 1:10): "Between Techeles and white" means between a winding of white strings and a winding of Techeles. The Yerushalmi says that the Shi'ur of recognizing a friend is when one can recognize someone with whom he is slightly familiar, like a guest who comes occasionally. The ideal Mitzvah is to begin Keri'as Shema in order to finish it at Netz and immediately pray Shemoneh Esre. Abaye agrees that the time for Keri'as Shema begins when one can distinguish between white and Techeles, like our Stam Mishnah. Berachos 25a connotes that Vatikin hold like R. Yehoshua, that the Mitzvah extends until three hours, just they hurry to read before Netz to be Somech Ge'ulah to Tefilah at Netz. The Yerushalmi says that the time one can recognize an acquaintance is the same as distinguishing between white and Techeiles.

R. Yonah (DH Tanya): "With Netz" means before Netz, like we say "Im Chashechah." Even though Vatikin used to read Shema shortly before Netz, they agree that one may read it earlier. The Halachah follows Acherim, since Rav Huna rules like them, and he is Basra. Abaye agrees. He just teaches that Vatikin would delay until shortly before Netz, in order to be Somech Ge'ulah to Tefilah and pray after Netz. If they read at the earliest permitted time, there would be a long delay in between, and they would not be Somech Ge'ulah to Tefilah. Others who are not concerned for Semichus Ge'ulah to Tefilah may read it from when one can recognize a friend. One may not read earlier than this. One is Yotzei earlier only b'Di'eved, or in pressed circumstances; then, one may read it from dawn. Dawn is the earliest time to be Yotzei b'Di'eved or in pressed circumstances. From when one can recognize a friend is the earliest time to be Yotzei l'Chatchilah. There are two latest times for Shema. L'Chatchilah is until Netz, and b'Di'eved is until three hours. We learn from 22b that l'Chatchilah the time is only until Netz. Chachamim said that one should read in the water, lest the time pass. If l'Chatchilah one may read after Netz, why must he read in the water and lose Semichus Ge'ulah to Tefilah? Rather, it is more important to read at a l'Chatchilah time, i.e. before Netz.

Question: Perhaps Vatikin permit saying Shema l'Chatchilah after Netz, but they read Shema just beforehand because the (best) time for Tefilah is after Netz, and they wanted to be Somech Ge'ulah to Tefilah! Yira'ucha Im Shamesh could refer to Keri'as Shema, just like to Tefilah.

Answer: Presumably, Yira'ucha Im Shamesh does not refer to the (initial) shining of the sun, rather, after it spreads out in the world (i.e. after Netz, therefore it must refer to Tefilah.) We find that R. Yosi praised Tefilas Minchah 'Im Dimdumei Chamah.' Surely the sun was still visible on the ground.

Question: What is the source that Vatikin hold like R. Yehoshua? Perhaps they hold that even b'Di'eved, the time is only until Netz!

Answer (R. Yonah): They used to finish at Netz. If one were not Yotzei after Netz even b'Di'eved, they would not be so precise, lest they miss the time for Keri'as Shema. They would not enter a Safek of missing Zman Keri'as Shema! Rather, they hold like R. Yehoshua, so even if they erred a little, we are not concerned. Even though they missed Zman Keri'as Shema mid'Rabanan, they read Shema within the Torah Zman of three hours.

Note: If they planned to finish Ga'al Yisrael right at Netz, surely they would finish Keri'as Shema at least two or three minutes earlier. Even so, since they did not have clocks as precise as we have nowadays, nor pre-calculated times for Netz every day, sometimes they would end Shema after Netz. Alternatively, perhaps Vatikin were before Birkos Keri'as Shema were enacted.

R. Yonah (DH v'Chasav): The Rif says that not everyone can do so (like Vatikin). Even so, it is a Mitzvah to read before Netz. This is astounding, for this is what Vatikin do! The Rif means that Vatikin are precise to be Somech Ge'ulah to Tefilah and reach Ga'al Yisrael exactly at Netz. Others are not so precise. If they would try, perhaps they would err and say Keri'as Shema after Netz, and miss the Zman l'Chatchilah for Keri'as Shema. One must read at least the first Parshah before Netz, and Netz comes after that and before Ga'al Yisrael. It is easy to coordinate that Netz come within this large interval of time. Even though Netz is not just when he reaches Ga'al Yisrael, we are not concerned. It is better that Netz come a little before (Ga'al Yisrael), than to come to a Safek of the time (Netz) passing (before saying Shema).

Beis Yosef (DH v'Chen): The Rosh and Rashba say that the earliest l'Chatchilah time for Shema is from when one can distinguish between Techeles and white. They do not argue with R. Yonah, who says that it is from when one can recognize a friend. The Yerushalmi equates these times. However, based on what the Rashba brings regarding Abaye's ruling like Acherim, it seems that they are different.

Poskim

Shulchan Aruch (OC 30:1): The time for morning Shema begins is when one can recognize an acquaintance with whom he is slightly familiar, four Amos away.

Mishnah Berurah (1): Also the Berachos before Shema should not be said before this time.

Mishnah Berurah (2): Some people rise at dawn, therefore the Torah calls this "uv'Kumecha", so one is Yotzei b'Di'eved from dawn. The proper time is from when one can recognize a friend, for most people rise then. Also, this is the time for Tzitzis, therefore Chachamim fixed it also for Keri'as Shema.

Bi'ur Halachah (DH Zman): One may say until Borchu before this time. However, this is not so relevant, for l'Chatchilah, one should not delay putting on Tefilin until between Yishtabach and Yotzer Ohr, so one will not say Baruch she'Amar and Pesukei d'Zimrah before this time. It is relevant on Shabbos according to the opinion that one may bless on a Talis from dawn. If one's time is pressed, he may say Baruch she'Amar and Pesukei d'Zimrah without Tefilin, until Yotzer Ohr.

Shulchan Aruch (ibid.): The ideal Mitzvah is to read it like Vatikin (Talmidim; Rashi - humble people who treasure the Mitzvos), who recited Shema a little before Netz, in order to finish Keri'as Shema and its Berachos at Netz and pray Shemoneh Esreh immediately afterwards at Netz.

Gra: This is like Tosfos, who says that Abaye agrees with Rav Huna that the Halachah follows Acherim, just the ideal Mitzvah is like Vatikin, in order to be Somech Ge'ulah to Tefilah. R. Yonah and the Rosh say so. This is unlike the Rambam, who rules totally like Abaye. Also the Rif connotes like this.

Kaf ha'Chayim (6): The Pri Chodosh says that l'Chatchilah one must read k'Vatikin, in order to be Yotzei according to all opinions.

Kaf ha'Chayim (18:18) and Lu'ach Eretz Yisrael: One may bless on Talis and Tefilin (and say Shema) from when one can distinguish between Techeles and white. The custom of Yerushalayim is to consider this to be an hour before Netz, both in summer and winter.

Ashrei ha'Ish (1:5:1, citing ha'Gaon R. Y.S. Elyashiv Ztz"l): One should be stringent not to bless on Tefilin until 45 minutes before Netz. In pressed circumstances, one may bless an hour before Netz.

Lu'ach Binah l'Itim: Tests show that one can recognize a friend when the sun is 11.5 degrees below the horizon. [In Yerushalayim this varies from 50 minutes before Netz in winter, to almost an hour in June and July.]

Igros Moshe (4:6): The time is between 35 and 40 minutes before Netz.

Emes l'Yakov (58:1): One can recognize 36 minutes before Netz, but 37 minutes before is a Safek.