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March 2010

FTC now very likely to oppose Google-AdMob

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."    

Read Downes' CNET Column on Title II reclassification: a great overview why its such a bad idea

Kudos to Larry Downes for his excellent guest column on CNET: "What's in a Title? For broadband its Oz vs. Kansas." I recommend reading it.

It is a very readable, informative overview of the great folly it would be for the FCC to reclassify broadband services from unregulated information services to regulated common carrier telecommunications services.

Mr. Downes' piece makes it abundantly clear that any Title II reclassification by the FCC would be a monumentally bad idea.

 

 

 

Google opposes public access to Viacom-YouTube filings -- Google's Discovery Risks -- Part I

A potential flood of very illuminating documents and information about the inner workings of Google are likely to be released soon by the Federal Court hearing Viacom's $1 billion copyright infringement lawsuit against Google-YouTube, despite strong Google opposition to the court's release of the information Viacom found in "discovery."

Swanson: Innovation doesn't come from Government -- Read his new great op-ed

Entropy Economic's Bret Swanson has another great, clear-thinking op-ed that I recommend you read, this time in RealClearMarkets.com entitled: "Entrepreneurial Innovation and the Internet."

Bret incisively captures the amazing and dynamic nature of innovation in the currently unregulated Internet ecosystem, and cautions against Washington imagining that the Federal Government can do better than free market competition can with top-down innovation micro-management from slow-moving bureaucracies.

His piece also helps spotlight the huge disconnect over where innovation comes from. 

  • FreePress, Public Knowledge and other net neutrality proponents imagine that Government regulations, restrictions and limitations on the freedoms of property owners somehow magically will foster more net innovation by those who don't believe in private property.
  • Google, eBay and Amazon imagine that they can increase overall Internet innovation, if the FCC would only require broadband providers and potential competitors to seek permission from the FCC, (and by proxy -- permission from Google, eBay and Amazon) before they implement any network innovations in the marketplace.      

It is naive to think that FCC regulation can surgically micromanage what innovation is good and allowed and what innovation is "bad" and discriminatory -- before the fact.

Google's default "opt-all" - Appitalism investigation uncovers massive Google advertising overcharges

A very important investigative scoop by Appitalism's Simon Buckingham (that has been submitted to the FTC's Google-AdMob antitrust investigators) uncovers how Google unilaterally, not-openly, and without advertisers' permission, changed the default settings in all of Google advertisers' accounts, which effectively "duped advertisers out of hundreds of millions of dollars."  

In a nutshell, Mr. Buckingham's investigation found that  two years ago, Google quietly changed the defaults of all its advertiser clients' accounts so that their ads were served not only to all desktop pcs/laptops, but also to all IP enabled mobile devices too.

  • This significantly expanded the number of ads Google served and advertising revenue generated by Google via clicks, but without a consequent increase in the value delivered to the advertiser customer by Google  in return. 
  • As Mr. Buckingham explains it, mobile devices simply can't functionally handle most of the ads Google sends to mobile devices because they require Adobe Flash (which mobile devices generally do not have) and mobile devices have much smaller screens so large-screen-oriented ads are basically dysfunctional in the mobile device market.
  • Mr. Buckingham estimates that this deceptive practice likely has costed Google advertisers over several hundred millions of dollars over the last two plus years.

This investigation prompts several disturbing takeaways. 

First, this underscores how truly opaque the Google "Black Box" advertising business model is.

Will Google redefine insider information/trading?

Google's unprecedented mass-accumulation of material non-public information may force a re-thinking and broader definition of the concept of insider information/trading and related securities laws/regulations, in order to continue to ensure the integrity of public markets.

  • Public statements by Google's CEO Eric Schmidt last week unwittingly unveiled a new and potentially very serious material weakness in the oversight and integrity of public markets, that should trouble those responsible for policing insider trading and other public securities laws at the SEC, CFTC, FERC, Treasury and the DOJ.
  • From Jon Fortt's outstanding not-to-be-missed post in Fortune: "Top 5 moments from Eric Schmidt's talk in Abu Dhabi:"
    • Google CEO Eric Schmidt: "One day we had a conversation where we figured we could just try and predict the stock market..." "and then we decided it was illegal. So we stopped doing that."

Public market regulators responsible for protecting the integrity of public markets are likely to be concerned by this public admission by a publicly-traded Fortune 200 CEO, especially when the statements are put in a broader perspective by connecting the relevant dots.

GBC: Google Broadcasting Co. -- world unicaster

First there was one-to-many broadcasting, then many-to-many Internet narrowcasting... now it appears we are moving next to a one-to-many GoogleNet unicasting future...

  • ...where every company and individual may simply become a subordinate channel on the Googleopoly advertising network, 
  • and where content largely would be found only via Google's mono-search guide...

To better understand this troubling ongoing transformation, connect the dots below...

Viacom vs Google evidence has big antitrust implications

Wow. The evidence Viacom unearthed in discovery in their $1b copyright infringement suit against Google is surprisingly damning. The evidence shows willful, premeditated, deceptive, and organized efforts by YouTube, Google and Google-YouTube to infringe copyrights for anti-competitive and financial gain.

  • Read the quote summary first here, then review the copious evidence/history in the 86 page Viacom Statement of Facts here, and then review Viacom's Summary Judgement memo of law here

So what are the broader antitrust implications of all this new and serious evidence of illegal activity and misconduct by Google-YouTube?

First, DOJ really blew it for not even asking for a second request of information on Google's acquisition of YouTube.

No freedom of speech in net neutrality movement? In defense of Ambassador Verveer

In a remarkably ill-advised and irresponsible blog post, Mr. Feld of Public Knowledge attacked the State Department's Ambassador Phil Verveer for apparently veering from the strict orthodoxy of FreePress/Public Knowledge's view of net neutrality. 

  • Ambassador Verveer was merely doing his job and speaking freely and forthrightly that other countries will obviously be watching what the FCC does, given that the U.S. has led communications-competition policy for two decades. 

First, everyone who knows Phil (and I have had the pleasure of knowing him for almost twenty years), knows Ambassador Verveer to be one of the most honorable, wise, measured, and capable professionals and public servants they know, period, full stop.

Second, it is exceptionally bad form and hypocritical for net neutrality proponents who claim the moral/ethical basis of net neutrality is all about Internet Freedom, Freedom of Speech, and that net neutrality is the First Amendent of the Internet, to quarter absolutely no dissent from the radical FreePress/Public Knowledge strict orthodoxy on net neutrality.

On hiatus for vacation

PrecursorBlog is on hiatus for vacation.

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Q&A One Pager Debunking Net Neutrality Myths