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It didn't take long for the Empire to Strike back! Shortly after the release of Googleopoly, Ed Black, President and CEO of the Computer and Communications Industry Association, which represents Google, put out a critical press release on my Googleopoly white paper entitled:  "Merger Report Unconvincing." 

• As I predicted on my blog this morning:"I expect to be attacked personally for my analysis and conclusions here, just like I was attacked by Bernie Ebbers and WorldCom as "the idiot Washington analyst" for having the audacity to be the only analyst in the country willing to predict, and stick to my guns, that the government would block the WorldCom-Sprint merger."

As expected they tried to discredit the messenger because they don't like the message. Standard operating procedure from my debate opponents.

My detailed analysis over the last several weeks leads me to believe that the FTC is likely to block the Google-DoubleClick merger because it will enable Google to dominate online advertising and dramatically increase the opportunity for market collusion and price manipulation in the market for consumer click data, ad-performance tools, ad-brokering and ad-exchanges.

Antitrust is fact-specific and evidence-driven. To understand the true antitrust outlook for a merger one needs to become familiar with the core facts of the case. To date, media and investment coverage of this merger has been remarkably superficial.

• The executive summary and my new 35-page white paper: "Googleopoly: the Google-DoubleClick Anti-Competitive Case" can be found at Googleopoly.net. An audio file of my conference call on this merger outlook will also be on Googleopoly.net. The analysis and conclusions are driven by pages and pages of facts and evidence.
• The purpose of the paper is to present the detailed case theory, argumentation and evidence of why the merger is anti-competitive and harms consumers, content providers and advertisers.
• The paper:
• Defines the market;
• Explains why Google-DoubleClick are competitors;
• Explains why startups, Yahoo and Microsoft can't compete with Google in search;
• Spotlights the four anti-competitive network effects of the merger; and
• Shows how the merger harms consumers, content providers and advertisers.

I see three big takeaways from my white paper.

First, the more people learn about this merger the more concern they will develop.

You're invited to participate in a conference call Tuesday July 17th at 11 am EST to hear a discussion of, and Q&A on, my new 35-page white paper, entitled:

• "Googleopoly: the Google-DoubleClick Anti-competitive Case;" which will be released publicly at the time of the call at www.Googleopoly.net.

I will explain how a Google Inc. (NASDAQ: GOOG) - DoubleClick merger will facilitate a de facto Internet information access monopoly, substantially lessen competition, and harm consumers, Internet content providers, and advertisers.

FCC Chairman Martin's surprising proposed open access/net neutrality regulations for the 700 MHz auction, threaten to broadly chill the broadband investment necessary to deliver broadband deployment to all Americans.

• Chairman Martin apparently has chosen to abandon over a decade of bipartisan free-market Internet policy and adopt a new more regulatory "managed competition" broadband policy advocated by new House Chairman Ed Markey, who has strongly praised Chairman Martin for his support for net neutrality regulation/open access.
• The real world effect of this unwarranted core policy flip flop is to introduce new and very substantial policy, legal and investment uncertainty into what had been a very stable economic growth environment. 
• Chairman Martin is making the heroic assumption that he can massively interfere with market forces and heavily subsidize untested and likely uneconomic business models with no unintended consequences on investment or economic growth in the critical broadband sector.    

Chairman Martin has now emphatically embraced the core economic principle of former FCC Chairman Reed Hundt's Frontline Proposal (and Frontline's Google gaggle of investors), which is that market forces will not and cannot promote sufficient "competition" so the government must regulate and "manage competition" (i.e. mandate prices, terms and conditions -- either directly or indirectly) to ensure consumer welfare.

CNBC's Larry Kudlow hosted a debate over Chairman Martin's proposed open access/net neutrality regulations for the 700 MHz auction.

Both sides were ably represented:

• John Rutledge of Rutledge Capital took the free market view and
• Gerry Waldron who represents Google and worked for Chairman Ed Markey took the pro-regulation view.

Watch and enjoy!

According to DowJones, FCC Chairman Kevin Martin is proposing some of the net neutrality/open access regulation that Google requested for 22 of the 60 MHz of prime 700 MHz of spectrum to be auctioned off by the FCC in early 2008 for use in about 2010.

• A similar USA Today cover story got a key part of the story wrong in implying that the net neutrality/open access conditions would apply to  the whole 700 MHz auction, not just to 22 of the 60 MHz being auctioned.

I have three points to make about Chairman Martin's reported net neutrality/open access proposal.

SaveTheInternet has a new video out that breathlessly claims that people only have until July 16th to tell the FCC to keep a "level playing field" in order to "save the Internet!"

• This vacuous "eye-candy" video only says "the Internet is under attack in Washington" but says nothing about what "the attack" actually is, why anyone in their right mind would want to "attack the Internet," what the FCC is actually doing or deciding that needs their input by July 16th, or even why there is a July 16th deadline to act.
• This video propoganda is a disturbingly accurate representation of the vacuousness of SaveTheInternet's whole net neutrality position and crusade.
• It is all form and fear and precious little substance.
• Its scary that they don't even try to inform or educate just incite.  
• It also tells us a lot about what they think of the intelligence-level of average Americans and those on their mailing list -- they obviously just see them as lemings to scare and herd off a proverbial cliff.  
• There is zero respect for people's intelligence in this video propaganda.
• SaveTheInternet sees no need for facts, for information, for context, for balance, or hearing both sides -- just feed the masses the dumbest possible version of a scare message and shout that they have an urgent deadline to act!

This video is damning proof of how vacuous the net neutrality regulation movement has become. View it and weep.

The Washington Post gave a lot of "free" ink to former FCC Chairman Reed Hundt today to push for his Frontline Wireless corporate welfare scheme. The article also provides a "bay window view" of Mr. Hundt's perverted view of "competition."

• Mr. Hundt said: "We're asking the FCC to place conditions on the sale of the license, just like zoning on real estate."
• Competition through zoning regulations!
• This captures the essence of Mr Hundt's "market" views. He has always thought "competition" was much too important to be left to the marketplace.
• Mr. Hundt's entire tenure as FCC Chairman was characterized with a deep distrust of free market forces and a fondness for writing very detailed regulations that heavily tilted the playing field to guarantee his desired outcomes.

Now that his company has $3b in capital and is prepared to raise up to $10b in the next five years, according to the Post, why is he so afraid to compete in the auction like everyone else?

The New York Times article today: "South Koreans Connect Through Search Engine" provides a huge window into what the real source of a search engine's market dominance is. (The article indicates that in South Korea, Naver.com is the leading search engine with 77% share, followed by South Korean company Daum.net with 10.8%, and Yahoo with 4.4%. Google's market share is 1.7% in South Korea.)

• The South Korean example is a particularly helpful set of facts and insights to the FTC and Congress in their journey to understand Google's increasing search dominance and the potential anti-competitive effects of the Google-DoubleClick merger.

Specifically, what makes Google's 1.7% South Korean search market share different from its 90% share in Germany, Spain, 82% share in France, 75% share in the UK, and its 65% share in the US -- given that Google has been competing in the South Korean market since 2000?

Frontline's Reed Hundt is mounting a furious eleventh hour effort to finagle a backroom sweetheart deal for his company from the FCC, in the 700 MHz auction. He attacked the outstanding op ed in the Washington Post by Robert Hahn and Hal Singer in both the Post and in RCR.  Our former Big Government FCC Chairman, Mr. Hundt also apparently has lost his cool and perpsective in railing against the rollout of the new, innovative and already successful iPhone as somehow a market failure that only his company can cure.