Competition

The FTC is now very likely to file an injunction in Federal Court to block Google's proposed acquisition of AdMob, if Google does not walk away from the deal, given that Bloomberg reports that the FTC is "seeking sworn declarations from Google Inc. competitors and advertisers."    

George Ford of the Phoenix Center has penned another incisive analysis about the real world impact of net neutrality and the FCC's Proposed Open Internet regulations.

• "Sabotaging Content Competition: Do Proposed Net Neutrality Regulations Promote Exclusion?" is an important read for anyone seeking a substantitve understanding of the impact of the FCC's proposed rules.
  • George Ford and Michael Stern's core conclusion: "...the proposed net neutrality rules of both the FCC and Congress... can actually promote such exclusionary behavior. That is, the incentive to monopolize is greater under net neutrality."

  The Phoenix Center's profound insight here got me thinking, (which is always my highest compliment) so let me share my takeaways building on their conclusion; takeaways that show why net neutrality is such an intellectually and economically bankrupt concept.

  • First, not only is net neutrality "a solution in search of a problem," but the FCC's proposed "solution" would make the net neutrality "problem" they allege worse than the status quo!

The discussion at the Federalist Society about former U.S. Solicitor General Greg Garre's excellent legal analysis  (that the FCC does not have the legal authority to promulgate Internet traffic rules), surfaced what I believe to be yet another insurmountable barrier for the FCC to overcome -- beyond the litany of legal barriers outlined by Mr. Garre.

• FCC reclassification of broadband as Title II common carriage would practically force the FCC to redefine competition in a way that would be arbitrary and capricious. 

Let me explain. 

Public Knowledge's Gigi Sohn laid out  the counter argument to Mr. Garre's analysis that the FCC could reclassify broadband as Title II by simply revisiting the basis for the FCC's 2002 decision and overturning it as wrong on three counts:

Google's antitrust liabilities continue to grow and proliferate, even if many have not yet connected the dots to recognize this ominous and increasingly obvious pattern facing Google. 

The biggest takeaway from the U.S. DOJ (and the EU) approving the Microsoft-Yahoo search partnership without any restrictions is that the Varney DOJ Antitrust Division implicitly agrees with the Barnett DOJ Antitrust Division (which blocked the Google-Yahoo Ad Agreement) --  that Google is indeed an dominant and enduring search advertising monopoly. 

If the DOJ did not believe Google was a monopoly, traditional antitrust analysis would have had more serious problems with the #2 and #3 competitors in a highly concentrated market combining forces.

This is a negative precursor for Google generally -- that they are indeed the next big antitrust problem of this decade.

It is also a negative precursor for the:

• FTC's antitrust review of Google-AdMob; and
• DOJ's review of the Google Book  Settlement.

Google, you have a problem.

FCC Chairman Genachowski's speech to NARUC: "Broadband: Our Enduring Engine for Prosperity and Opportunity" raises some big open questions.

Kudos to Randy May of the Free State Foundation for his outstanding CBS News op-ed "Reject the Internet 'Public Option.'"

Regulating the Internet for the first time, when there is no problem to address, and when the U.S. has developed more facilities-based broadband competition than any nation in the world, would be the tantamount to mandating the  "public option" for the Internet.

The question that those pushing the Title II public option for the Internet do not want to answer is:

• What evidence is there that the FCC could do a better job building, upgrading, operating and managing the Internet than the private sector has done?

Google effectively blew off the DOJ's antitrust, copyright and class action objections to the amended Google Book settlement in Google's 77-page brief to the Federal Court adjudicating the settlement. 

In a nutshell, Google argued that its settlement is "remarkably creative" (p 28), and "fair, reasonable and adequate" (p 67). It focused on the settlement's benefit to humanity: "the benefits of approval are bounded only by the limits of human creativity and imagination" (p 2). Google also effectively instructed the Judge to accept its redefinitions of copyright, antitrust, and class action law and to reject the DOJ's interpretation of the law and its "cramped view of the court's jurisdiction" (p 10).    

The core thrust of Google's argument is political. Google essentially asks the court to make a political, not a legal, decision to:

The FCC just signalled it is considering requiring forced access and more special access as part of its soon to be released National Broadband Plan.

Google announced it plans to enter the competitive broadband market and will build out what it calls an "ultra-fast" fiber broadband network that would be available to 50,000 Americans, 500,000 at most.

Given that the purpose of my new watchdog site www.GoogleMonitor.com is making Google more transparent and accountable -- I offer some pertinent questions people may want to ask Google about its new high-profile broadband plans.