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How Youtube affects Google's net neutrality position

Google's $1.6 billion purchase of youtube dramatically affects Google's leadership position in the net neutrality debate.

First, Google can't continue to claim its business "neutral" in the debate -- it now has its own dog in the fight -- its now a vertically integrated media company. Before Google liked to wax eloquently that their motives on net neutrality were "purely altruistic;" they said they were fighting, not for their own gain, but for the little Internet entrepreneurs toiling away in garages that needed protection from capitalists and market forces.

Now it is clear that Google is simply using the public policy process to leverage commercial negotiations for Google's commercial advantage with youtube. People need to remember that key to Google's exceptional finanical success is their abilty to dump most all their normal distribution costs on the consumer. Its by shifting their biggest cost to the consumer, that they enjoy 80+% gross profit margins, have ten billion dollars in cash, a hundred billion plus market capitalization, and can afford to pay $1.6 billion for a company that has no profits and little revenue. Remember these numbers when Google is publicly indignant about having to pay more for new innovative Internet bandwidth that can better carry video.

DOJ Approves AT&T-Bell South merger: more affirmation market is competitive not a duopoly

The Department of Justice Antitrust Division approved the AT&T-Bell South merger today without conditions. What this means is that the expert agency responsible for preserving competition believes the various markets these companies are engaged in are competitive: broadband data, voice, wireless and internet access.

The key quote from the DOJ announcement included below is:

  • "The proposed acquisition does not raise competition concerns with respect to Internet services markets or 'net neutrality.'

This effectively stuffs those net neutrality proponents trying to argue that there is a "broadband duopoly."