FOR IMMEDIATE RELEASE                                                        April 27, 2010                                                                                          Contact:  Scott Cleland 703-217-2407

Given the FTC is very likely to disapprove Google's acquisition of AdMob soon, I have prepared a one-page chart that illustrates the core reason the deal is anti-competitive: it would create a substantial bottleneck for advertisers and publishers entering the in-application mobile advertising market.

• To help people get up to speed on the deal and the likely FTC disapproval coming up, I have also pulled together a 30-page Google-Admob backgrounder, which includes a one-page summary, charts, the top 10 reasons the deal is anti-competitive, why Google is a monopoly, how Google has abused its monopoly, and why Google's main antitrust defenses, like "competition is one click away," are specious.

Impact of New DOJ/FTC Horizontal Merger Guidelines On Deal:

At the recent Senate Health IT hearing, it was very good to hear Senator Wyden say that it's "appropriate for Congress... to start thinking... about an HOV lane for e-care for wireless broadband" and questioning why an emergency healthcare service should not be accorded priority transmission over less important/urgent services.

• This is a much more realistic, reasonable, and nuanced point-of-view than Senator Wyden's original net neutrality stance a few years ago when he said that: "all bits are created equal" on the Internet.  

Senator Wyden's moderating view on net neutrality reflects a better and growing understanding of how essential reasonable network management is. Communications networks have long accorded priority to first responders in a crisis.

The essential needs for prioritization of Internet traffic and reasonable network management are basically two-fold:

Google's latest privacy-killing act of privacide is "Google's roving Street View spycam," which is not only taking pictures, but is also scanning to log WiFi network addresses and unique Media Access Control (Mac)addresses per Andrew Orlowski's excellent scoop at the Register.

Well informed reports (that Google will not deny), that hackers breached Google's most sensitive software code, the Gaia password system, surface titanic security flaws at Google.     

Why Google is too big not to fail. 

1.  "Bigtable" Storage design: How Google stores and accesses "all the world's information" in and from its data centers is: "'Bigtable:' a Distributed Storage System for Structured Data." It is Google's innovation to maximize scalability, speed and cost efficiency -- not security, privacy, or accountability. Simply, Bigtable is an "all eggs in one basket" approach to information storage and access.

The abrupt change, that Google's CEO Eric Schmidt will no longer be accountable to shareholders on Google's earnings calls, should prompt investors to ask why? 

• Google claimed that they wanted to put more focus on Google's strong financials, but they did not disclose any more than Google's usual barest of minimum of information to investors.  
• The most obvious reason for this abrupt change is the literal explosion of real franchise liabilities and risk overhangs to Google that reared their ugly heads this past quarter. 
  • Had CEO Schmidt been available to answer investor questions, Google's exploding liabilities could have dominated the Q&A and the investment narrative coming out of the earnings call.

What has changed, and what Google has been not been open about, is the very serious ripening of three different types of going-forward franchise risks (antitrust, privacy/security, and intellectual property) that cumulatively herald a de facto change in Google eras: from the roaring "Growth Decade" of 2000-2009, to the more unpredictable "Liability Decade" of 2010- 2019.

The New York Times lead editorial today, which advocates for the FCC public option for broadband, is embarrassingly fact-challenged.

First, it says that the D.C. Circuit Court decision "puts at risk big chunks of the FCC's strategy" for broadband, in direct contradiction to the FCC Chairman's testimony before the Senate just last week, where he said the FCC has the authority to implement the NBP.

Second, it says "the odds of a rational debate on the issues are slim." Obviously the NYT has not reviewed any of the literally thousands of pages of "rational" economic, investment, network management, jobs, innovation filings and comments that have been filed on the Open Internet NPRM and the NBP. It appears that the NYT Editorial board characterizes positions, analysis, arguments and evidence in disagreement with theirs as inherently irrational.

In his Philly.com op-ed, self-appointed armchair communications historian, and FreePress Chairman Tim Wu, advises that the FCC can find all the regulatory answers it needs for the future of the Internet by going back a century in time. 

• I kid you not, Chairman Wu's actual policy advice is: "we need to go back to 1910, when Congress passed a law declaring that the telegraph, telephone, and radio were to be treated just like railroads, as 'common carriers.'"

If FreePress' Chairman Wu did not have the ear of some at the FCC, his advice would be laughable. 

• Does Chairman Wu actually think Congress knew more about the best communications policy when we still used telegraph Morse code and phones had to be connected by an operator by manually connecting wires, than Congress knew about communications policy in 1996? and the FCC knew in 2005? 
  • Apparently Mr. Wu seeks to regulate 21st century Internet Service Providers like 19th century railroads.

For an aspiring communications historian, Chairman Wu apparently has missed a couple of big and embarrassing ironies in his nostalgic "back to the future" regulatory advice to the FCC.

The FCC would be making a long-shot bet-the-farm gamble, if it decided to mandate the broadband public option i.e. deeming broadband to be a common-carrier-regulated service and regulating the Internet essentially for the first time. 

• It would be a classic lose lose gamble because:
  • The FCC is very likely to lose in court -- accomplishing nothing, but damaging the hard-built trust, cooperation, and commitment necessary for public-private partnerships to be able to get broadband to all Americans fastest; and
  • Everyone else would lose from the irreparable damage to private broadband investment, innovation, growth, jobs, and America's broadband ranking in the world. 

I.   Lose in Court:

It is a given that the FCC would be sued; and it is very likely that the Appeals Court and/or the Supreme Court would overturn any FCC unilateral assertion of authority to deem broadband a common carrier service.

Barbara Esbin's PFF post on "Broadband-reclassification of broadband Internet access service: No slam dunk," is a must read for anyone interested in really understanding the legal outlook for the FCC asserting authority to deem broadband a regulated common carrier service.

Barbara brings tremendous clarity of thought to this issue and cuts like a razor to the essence of the FCC's very steep challenge:

• That "the FCC has never treated Internet service providers as common carriers;
• That is not reasonable to "apply unchanged law to unchanged facts and reach a different outcome;" and
• That the FCC does not have "the authority to force common carrier status on non-carriers."