Competition

What have we learned from the FCC's wise inaction this week, in deciding to not vote to declare broadband a Title II telephone service before the election, and to ask more questions in a further Open Internet regulation inquiry about specialized and mobile services?

#1 Stakeholder collaboration/negotiation works. The FCC apparently now better recognizes that the open industry collaborative dynamic that has been so consistently successful in resolving most every other major Internet issue over the last couple of decades, can also succeed in appropriately resolving the FCC's Open Internet concerns now -- if only given the time and flexibility to negotiate a workable outcome.

#2 Apparently net neutrality is not the popular populist political issue it has been touted to be. The September-October period before an election is when the real political rubber meets the road.

NPR/WFAE host Tim Collins of Charlotte Talks hosted a very good hour-long radio show on net neutrality this morning featuring CDT's very able Andrew McDiarmid, promoting net neutrality/Title II regulation, and me opposing formal net neutrality/Title II regulation.

• It was a fresh and informative overview for the average listener.
• The podcast link is here.  Please add comments if you wish.

What those who follow this blog would find most amusing, was my defense of Google from the sand-blasting it has gotten from the extreme left for its attempt with Verizon to be constructive in trying to find a workable framework/compromise on net neutrality for the FCC.

The top U.S. spy agency for mapping announced a no-bid digital mapping contract with Google on August 19th. However, after media inquiries, the agency modified the contract's no-bid format, but made clear "the agency's intention to award the contract to Google without entertaining competitive bids" -- per a Fox News story by James Rosen.

• Wow. There are large and broad implications of this remarkable new development for: privacy, security, antitrust, Google's international business, and Government oversight.
• The fact that this was announced in late August, when precious few are paying attention, should heighten everyone's Big Brother Inc. antennae.

Has anyone in a position of authority or oversight even begun to think through the irony and stupidity of contracting out the Nation's most sensitive intelligence gathering and analysis function to a company that has:

Verizon and Google's announced net neutrality legislative proposal is a significant new development with at least a couple of significant implications.

Takeaways:

First, it is even more clear that the FCC should give the legislative process time to play out on net neutrality.

While this is a legislative proposal of only two of the many major stakeholders in the net neutrality debate, it still sends a strong signal to Congress and the FCC that the stakeholder negotiating process -- that has been occurring over the last several weeks -- holds real potential for substantive progress and resolution, if the FCC is patient and gives the process the appropriate time and breathing room to play out.

To help you better picture how Google leverages its search advertising monopoly via anti-competitive search discrimination in favor of Google information, products and services... and to better connect Google's monopolization strategy with the myriad of current Google actions to embrace and extend its monopoly... please see this one-page chart/PDF: "Google-opolization Through Anti-competitive Search Discrimination." 

For those who really want to understand Google's strategy and how it all fits together, please read and study this one-page chart/PDF, because much valuable work and insight has gone into providing everyone with a big picture conceptualization of Google's monopolization of digital information distribution and the Internet itself.

Japan effectively has outsourced the organization, storage and access to its nation's information, culture, history, and online commerce to one entity, Google, in consenting to a national monopoly search engine/ad platform for Japan going forward.  

• Unlike Japan's neighbors, China, Korea, and Russia, Japan apparently has chosen to not promote an indigenous Japanese search engine/advertising platform, or to ensure search competition -- a fateful tacit decision that heralds that Japan will more likely become a de facto third world online economy long term.   

Apparently Japan's Fair Trade Commission or Government have not thought through all the huge ramifications of putting all their information eggs-in-one-basket from a competition, cultural, political, economic, privacy, or national security perspective.

Google again seems to be presumptuously trying to make official announcements for sovereign governments.

• In announcing for the Japanese antitrust authority, that the Government of Japan has approved Google's proposed monopolization of search advertising in Japan (by allowing Yahoo-Japan to outsource its search advertising engine and platform to Google), Google appears to be once again imperiously trying to dictate outcomes to sovereign governments in advance and in public.
• Just like Google tried and failed to dictate outcomes to China over the first six months of this year, it appears that Google has learned nothing about "face" and due respect from its China fiasco and is once again treating a sovereign nation, Japan, as someone that works for Google.   

Doesn't Google's announcement strike anyone else as over-the-top presumptuous?

Google now has 93.8% of U.S. revenue share of search advertising as Google has taken ~20% of the search advertising revenue share that they did not have a year ago.  Google continues to relentlessly gobble up massive search advertising revenue share from its only two significant competitors, Yahoo and Microsoft, in part because:

• Google's relevant revenues are 20x bigger than Yahoo's and 57x bigger that Microsoft's; and
• Google is growing its huge base so much faster -- +24% to Yahoo's -8% and Microsoft's +13%. 

Given that these revenue share calculations are relatively easy to do (explained in detail below), and that the key revenue numbers are publicly available, it is amazing how no one in the press that reports on Google antitrust issues discuss revenue market share, which is what really matters in antitrust investigations trying to prove monopoly power.  

The fateful policy decision by the FTC/DOJ to exclude privacy as a factor in antitrust enforcement has fostered a perverse market dynamic where many online advertising companies now effectively compete on the basis of who can most take advantage of consumer privacy fastest, rather than compete on the basis of who can best protect consumer privacy. 

Is the market, or the FCC, the problem in "timely and reasonable" broadband deployment? 

• The FCC's just released 706 broadband report, like the wireless competition report that preceded it in May, again indicts the broadband industry for not meeting the FCC's new arbitrary, subjective, and after-the-fact expectations of where the nation should be at this particular point in time, despite the FCC's own facts that 95% of Americans have access to broadband and that Americans have more broadband competitive choices than any country in the world.

To see if the FCC is more interested in actually getting broadband deployment to all Americans fastest or in micromanaging broadband access, economics and providers -- look at how the FCC has burdened LightSquared, the start-up that seeks to be the EIGHTH national U.S. broadband competitor!