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July 5, 2006

Google Will Use Existing Trade Laws to Combat Market Abuse

Google has indicated through the statements of Google Vice-President Vint Cerf that it will use the courts and existing antitrust laws to combat market abuse if net neutrality provisions fail to make it into law.  The latter seems to be less likely as attempts to add net neutrality provisions to  the telecom bills circulating in the House and Senate were repeatedly shot down.  Cerf's statements came while he was in Bulgaria covering issues of information technology and Internet access there.

Telecoms say they won't discriminate against a competitor as much as enhance customer services for their own products.  Telecoms are chomping at the bit to offer video services which takes up huge amounts of bandwidth, which is really the issue here.  Telecoms are forced to spend a great deal of money to upgrade their networks to add this capability and are looking for outside deals to help subsidize the effort.  AT&T, for example, is just starting to test and publicize their U-Verse video service.  Verizon is supposed to have a video service in the wings as well.  These are still fledgling efforts.  AT&T doesn't publicize channel line-ups per package because they are apparently still in flux.

There is a lot of fascination over adding another market player to compete with satellite and cable providers for video services.  Everyone sees that as a good thing, more or less.  Cable companies deliver Internet services in competition with telecoms but haven't indicated that they would vary web service speed.  Telecoms, on the other hand, have been very vocal about wanting popular destinations to pay part of the freight. 

The reality is that no one really knows what the market will allow if the Internet becomes a semi-toll road,  hence the public posturing between entities in Congress and the FCC over the issue.  In fact, there is no guarantee that video services over IP will be a success, less because of the basic technology than to service levels and pricing issues.  Telephone companies were in the traditional cable business years ago and got out because it wasn't working for them financially.  Google adds one more layer to the mix by invoking the existing trade regulation laws as a possible answer to market abuse.

As the Chinese might say, let a thousand lawyers go forth.

News on Google's potential law suit are in the Washington Post, PC Magazine, and ZDNet.

July 5, 2006 | Permalink

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