Will FCC Exempt Googleopoly from Anti-Competitive Behavior Enforcement?

October 21, 2009

The litmus test of whether the FCC’s proposed net neutrality rules are really endeavoring to prevent anti-competitive behavior on the Internet (and not about turning private broadband networks into a public utility), will be whether the rules apply to all Internet competitors, which could be anti-competitive, like the existing consensus FCC Broadband Policy Statement already does.

  • If reports prove correct, the FCC will propose to remove the existing FCC net neutrality principle #4 that “consumers are entitled to competition among network providers, application and service providers and content providers,” and that new net neutrality regulations apply only to broadband ISPs.
    • Such a change would be new anti-competition policy and completely contrary to existing U.S. pro-competition law/policy, and FCC precedents.
    • Such a change would also not be neutral or fair, but arbitrary and capricious.

Why an FCC Googleopoly exemption from Net neutrality would be transparently capricious.

First, there is more evidence of violations against net neutrality by one company, Google, in one year, than there is evidence against the entire broadband sector over the last five years!

Second, Google has the largest and fastest-growing Internet service network in the world per the recent Arbor Networks study. Arbor’s Chief Scientist Craig Labowitz told Wired:I was blown away to find out that one-tenth of the internet is going [to] or coming from Google.”

  • Under what tortured legal and policy logic could the FCC possibly justify exempting the world’s largest Internet network from new network neutrality regulations it proposes to apply to all of Google’s Internet network competitors?

Third, just in the last week there is powerful new evidence of Googleopoly’s enduring Internet market power.

  • #2 search advertiser Yahoo just reported 3Q09 earnings and is hemorrhaging search advertising revenue share to #1 Google, which already has 71% market share per Hitwise; Yahoo’s search revenues are down 19% while Google’s search revenues are up 7%.
  • Moreover, the leading global advertising agencies just wrote the DOJ urging quick approval of the Microsoft-Yahoo search agreement because of Google’s enduring dominance of Internet advertising.

Fourth, Google is the only Internet network company officially found to have acted anti-competitively by the U.S. DOJ in the last year, not once but twice!

  • 11-5-08 the Bush DOJ blocked the Google-Yahoo Ad Agreement as anti-competitive; and 9-18-09 the Obama DOJ recommended that the court reject the proposed Google Book Settlement as anti-competitive.
  • If the FCC is truly looking to be the Internet’s “smart cop” policing anti-competitive Internet traffic discrimination, shouldn’t the FCC be open to what the U.S. Department of Justice has already concluded about Google’s current Internet anti-competitive potential under both Adminstrations?
    • Under what tortured fact-base would Google not be considered a potential anti-competitive threat, while all broadband companies would be?

In conclusion, the FCC finds itself in a pickle. Google rebranded “net neutrality” as the more slogan-friendly “Open Internet” in launching the Open Internet Coalition 5-24-07. Moreover, the current proposed Open Internet policy was first unveiled publicly at Google’s headquarters 11-19-07.

  • That origination context aside, whether or not the FCC exempts Googleopoly from Internet regulations to prevent Internet anti-competitive behavior, will be a litmus test of the FCC’s neutrality/fairness and the FCC’s fidelity to implementing existing U.S. competition law as an independent agency.

 

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