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YouTube's Bandwidth Bill May be Zero
MrShaggy writes "Credit Suisse made headlines this summer when it estimated that YouTube was costing Google a half a billion dollars in 2009 as it streamed 75 billion videos. But a new report from Arbor Networks suggests that even though Google is approaching 10 percent of the net's traffic, it's got so much fiber optic cable it is simply trading traffic, with no payment involved, with the net's largest ISPs. 'I think Google's transit costs are close to zero,' said Craig Labovitz, the chief scientist for Arbor Networks and a longtime internet researcher. Arbor Networks, which sells network monitoring equipment used by about 70 percent of the net's ISPs, likely knows more about the net's ebbs and flows than anyone outside of the National Security Agency."
I really don't see why Google would be paying much. It seems the guy who wrote that article now discovered how peering works.
Routing graph for YouTube AS
Routing graph for Google AS
YouTube alone has direct peering contracts with AT&T, RETN, TINET and via Google AS with Net Access, NTT Communications, Telia, Level3, SIG, Sprint, Global Crossing, MFN, Cogent, Port80, Internet2 and AOL.
Depending on the terms, it means Google can also act as a peering or transit point between these companies and or even have an IXP's at their locations, so theres incentive for ISP's to sign up beneficial transit agreement, especially considering Google has data centers around the world. Google has more power than Tier 1 ISP's alone. The article's note about "serving customers YouTube faster" is a moot point - Google's infrastructure and routing contracts alone act as a great incentive for ISP's to make a peering agreement with Google.
Epic. Fail.
If you were blocking sigs, you wouldn't have to read this.
nt
That's a whole lot of data without very much actionable information.
I'm not Google, nor am I an ISP. What do I care that Google's bandwidth costs are zero when I'm stuck with my pathetic broadband connection?
It's not even interesting data. The graphs make the whole presentation worse. I felt like I was reading a grad student's thesis, and a really dry one at that.
Sure, they are peering. But running one of the largest networks in the world isn't exactly cheap.
"This Win7 PC cost $300. On the other hand I still owe you $299 for that RTF model airplane you gave me last month. How about we just call it even?" - me
"Deal." - brother
It sounds like Google and the ISPs have the same arrangement.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
Google already ran the fiber for other purposes. So that cost was already planned for, well before they acquired YouTube. So, yes, it cost them nothing extra.
Owning and maintaining all that fiber is costing Google money. Even if they are not paying anything to other providers for handling YouTube traffic it is using bandwidth on their own fiber that they could otherwise sell or use for something else.
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
Seriously. Switches cost nothing, neither do routers! Rack space? ha! Building datacenters? also free. Yup. Google may pay pennies on the dollar because they don't need to buy transit, they can just peer-but there will always be cost involved.It's the same with any industry-uninstall the middleman, and your price goes down. When google becomes the ISP and content host, Companies like level3, cogent become moot.
The Wired article is from last fall. Arbor's blog post this week by Labovitz has better information. The most interesting data is a chart showing how 60 percent of Google's traffic takes advantage of direct peering, up from 40 percent a year earlier. Given the volume of traffic, we're talking about, there's some meaningful economics in that change.
RichM
Data Center Knowledge
Suppose Google had all that stuff but not YouTube. It would be selling services to YouTube.
...
It's not so much the cost to run their own fiber (marginal cost), which could be very low. The relevant cost here is opportunity cost; they could be charging other content providers to use that fiber and the revenue they're giving up is the real cost of using it for their own content.
There's a reason the concepts of scarcity and opportunity cost are introduced in the first lecture of every Econ 101 course that I know of. Too bad the concepts don't stick!
Imposing Libertarian views on everyone online since 1992.
If they weren't using it for Youtube they could leave it dark, saving power costs, or deferring future expenditures, or provide transit for other companies and receive income from them.
because i don't ride in other people's cars, my car costs are zero
except for car payments, financing, gasoline, repairs, insurance, inspection, registration, tolls, oil change...
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
The cost involved in laying fiber, maintaining it and the network itself is far from free.
Epic. Fail.
So why don't you write a book about it?
So due to Google's infrastructure they are able to use peering agreements to not pay bandwidth costs directly. That same infrastructure has costs associated with building and maintaining it. So my question is, what portion of the infrastructure was built for other purposes and is maintained for other purposes? How much of the infrastructure is there, built and serving bandwidth merely for the same of maintaining these peering agreements? That portion is still costing money to serve youtube videos.
I guarantee you that what's on their P&L isn't zero. Even putting aside what the actual cash outlays are for laying and maintaining a fiber infrastructure, these swaps are going to be used to book both expense and revenue at a "market price."
This is the same thing that the telcos (in particular Qwest) were doing in the 90s. They were doing it with dark fiber though, which is where it turned into actual straight up fraud.
fiber cost don't go in the same column as bandwidth cost. Accounting solves it again.
"Bandwidth bill" != "infrastructure cost".
but the cost of routers and maintenance is nowhere near buying the bandwidth.
Here are some pics of some of Googles hardware. These are a few years old. The power interface is entirely foreign to me.
When I uploaded them to photobucket they were resized and I've since lost the originals, but, if you zoom in close enough you can see that the powersupply has a part number printed on it that includes the word 'GOOGLE', and, the ram also has chips that are individually labeled Google.
Does anyone care to explain to me how it is possible that doing such a thing is more cost effective than just purchasing stuff already on the market in bulk? I've been wondering it for years after seeing this.
http://s38.photobucket.com/albums/e149/drcollinsakatheman/randomjunk/1.jpg http://s38.photobucket.com/albums/e149/drcollinsakatheman/randomjunk/2.jpg http://s38.photobucket.com/albums/e149/drcollinsakatheman/randomjunk/3.jpg
Almost all companies lease their offices. They could buy them and save rent. It would possibly be cheaper. They don;t though. They don't want all that capital tied up in property. They can use it for business expansion instead.
So Google owns a bunch of fibre. This has a capital cost. That's money that could have been invested somewhere else, so it's not free. They could have leased the fibre from a third party. Presumably they worked out that it would be cheaper not to do this. They could probably have saved money by leasing bandwidth from a third party. The third party would then be able to amortise the costs over several customers if there's surplus bandwidth. Having capital tied up like this isn't "free".
It points out the folly when people say "Comcast/AT&T/Verizon/whomever has to pay huge upstream bandwidth costs, bandwidth isn't free y'know!", and it always gets marked as insightful.
These guys are so large, bandwidth, other than physical maintenance of their physical plant, isn't a big part of their expenses. When Comcast says "We need to limit bandwidth because of those evil hackers", that's code for "I don't feel like rolling out DOCIS 3 for a few years". When AT&T Mobile says "Those iPhone users are sucking up all the bandwidth so we have to limit you", that's code for "We dont' want to upgrade our cell towers".
People still have this picture in mind of a tier-1 provider asking their local LEC to run a couple DS-3's over to their data center. It's such a 1992 view of how ISPs actually work.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
You guys are looking at this from a completely different angle than a business person would. Google has that fiber REGARDLESS of YouTube's existence. It has that fiber to run its core business, advertising. Therefore the cost of maintaining the fiber is a cost to Google's advertising business. Furthermore, the cost of laying the fiber has (likely) already been paid and is no longer considered a cost but a capital investment.
Therefore, since the YouTube division is not paying for the fiber to be laid and is not paying for the fiber to be maintained, YouTube could have $0 bandwidth cost to Google.
Sorry to reply to myself but there is only an opportunity cost in using this bandwidth if the bandwidth would otherwise be used. If they are not at capacity along their fiber then there should be no opportunity cost either.
Cogent already is moot for folks that want quality bandwidth. :-)
None of these have anything to do with the bandwidth bill.
Do you think they would have run all that fiber if they weren't expecting to host a lot of bandwidth-intensive services?
In any case, they're paying for the service. If I own a trash company and give somebody free trash delivery in exchange for free doctor's visits that doesn't mean that my doctor's visits didn't cost me something.
So... they diverted capacity from non-YouTube use to YouTube use?
OK, genius. Did they then:
Y'all wouldn't be an economist by any chance?
If you were blocking sigs, you wouldn't have to read this.
More or less in a peering situation, each provider agrees to cover their own costs. This includes laying the fiber, buying the high end routers needed for it, powering and maintaining all that, having the staff to handle problems, etc. Since each side is paying their own costs, and both have roughly equal amounts of data the other wants, it makes sense not to charge each other.
This is also why you do have to pay when you aren't one of the big guys. Your cable modem connection to your house you don't directly pay any of the costs other than perhaps buying the equipment needed to hook up. Everything else is handled by someone else. As such, they want money for it. It isn't as though all the equipment and effort that goes to making the HFC network operate costs nothing. Also they often have to pay for at least some of their transit.
At any rate, peering is basically a case where you want to trade data with someone, but each of you is maintaining your own part of it equally. As such you don't pay each other.
It isn't only done at the high levels either, sometimes smaller groups will peer. Your ISP might peer with another ISP in town, a university might peer with other universities (they actually do this, it's called Internet 2) and so on.
If ISPs are willing to give Google half a billion dollars a year of traffic in exchange for Google giving them some equivalent value of traffic on its own fiber, we should at least consider the possibility that Google could otherwise sell that traffic. Our best guess for the opportunity cost might still be half a billion dollars.
"I zero-index my hamsters" - Willtor (147206)
Whoosh.
True, but irrelevant, unless you're an accuntant or economental. If I run a shop that trades spare left shoes for spare right shoes, I don't come out even, I'm down the cost of running the shop.
If you were blocking sigs, you wouldn't have to read this.
The telcom companies seemed to have the street in my office park in a perpetual state of construction during the dot.com boom. First we'd see all the different paint mark symbols from the utilities and previous fiber. Then came the new digging. There must be a ton of dark stuff still around.
They can put the network at your desk for not "much" -- now, the network _really_ is the computer.
As M$ heavily depends on a computer-maker+them ecology, this makes for somber news...
On the bright side, Ballmer can start a fiber deployment company and finally deliver his promise of burying Google. LOL.
With an equally poor logic, if you hire a developer to work on project A, that person can also work in parallel on project B, because it doesn't cost anything!
The "cost" of course has to be divided up based on usage. And if they had excess bandwidth they didn't need (because youtube ate so much of what they would otherwise have), they could have sold it to someone else, making money on it. Money they are now losing.
GP is correct, the conclusion is crap.They may be saving a lot of money, but that's a whole different story.
Probable impossibilities are to be preferred to improbable possibilities.
Aristotele
The summary says they are paying for their use of other networks by trading bandwidth on their own network. So if they didn't need all that bandwidth for YouTube, they could be selling their bandwidth instead of trading it. There's definitely opportunity cost there.
You're right, I'm looking at it from the angle of someone with half a brain.
Capital investment is not free. Laying fiber is not free. But let's pretend that we're retarded, and ignore that just for the moment. Maybe magic pixies laid it for them.
Maintaining fiber is not free. Cables get cut, hardware fails, you have to pay for electricity, and for people to maintain it. You think that's free? You don't want to pay? Fine, your hardware fails, your power gets shut off, your admins go to work for AT&T. Kiss your business goodbye.
Regardless of whether Google can trade bits 1-for-1 at the edge of their network, they still have to pay extra to maintain the capacity to perform that zero-benefit trade. Trading 1-for-1 is not free.
If you were blocking sigs, you wouldn't have to read this.
But in that case it's better for you than not getting the free doctor's visit, which is the whole point. The whole article is talking about bandwidth specifically, not the whole infrastructure costs.
Read the title of the story. We are talking about bandwidth, not what it costs to run the whole YouTube.
Actually, I think Google bought up a lot of fiber instead of running their own. I remember some news articles from several years ago talking about Google buying up dark fiber on the cheap after the dot com bubble burst. The speculation was that Google might get into the ISP business.
I don't think that's quite it. The deal here (as best as I can tell) is that Google is sharing their pipes with other providers, making a peering agreement. Google doesn't own pipes all the way to your house, so they have to pay other providers to take the huge amount of traffic coming from their pipes and continue the journey. If Google had no pipes what so ever, they would have to pay for every single bit they send out.
But Google does have pipes, they bought up huge swaths of that dark fiber that was getting rolled out in the .Com bubble only to lie dormant. So when they work out their peering agreements, instead of paying cash for every bit, they can offer bandwidth instead.
So Google says "We're going to send out 1 terabyte of data per hour, and we have the bandwidth to accept 10 terabytes back." And some other peer comes along and says "We can take .5 terabytes from you if you can take .5 terabytes from us" and so on. Until Google has enough peers that they can move all of the data they want to.
This example is simplified to a point of silliness, but hopefully you get the idea. The "near zero costs" aren't implying that Google doesn't have to pay for maintaining it's own network, but that they don't have to pay cash to other providers to take the traffic from YouTube.
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
Once again, the Slashdot title has got it wrong. TFA doesn't say that Google's overall cost for bandwidth is zero, simply that their transit costs are near zero, which specifically refers money paid to a network provider to carry your traffic.
More accurately, this is like saying "I don't own a car, so my petrol costs are zero"
how was this modded up? it's because he makes fun of the parent isn't it. but that metaphor doesn't work at all.
neither the parent do anything to illuminate the article, both seem to be confused.
and they're both modded +5 Insightful.
It breaks my pluginses, my precious!
I can hear the telecom companies gearing up to spin this already. They're fond of claiming that Google "steals" their bandwidth and that they need to be able to charge Google for the "privilege" of getting access to the Telecom's users. (Of course, one wonders if the telecoms would be willing to pay Google for the "privilege" of their users being able to access Google's services.) I can just see them spinning the "Google maintains such a big network that they offset bandwidth costs via peering arrangements" into "Google doesn't pay anything for their bandwidth and just steals our bandwidth! WAH! WAH! WAH!"
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
unless you're an accuntant or economental.
I must remember that one during our next finance meeting.
Comment removed based on user account deletion
Capital investment may not be free, but it's off the books in a 36-month amortization schedule.
This is what I am hearing:
One person says Google's bill is zero, because they run the infrastructure themselves.
Another person says Google's bill is not zero because they have to maintain the network.
It's all about perspectives: Do you count internal cost or not in the discussion. Obviously it cost "something" for the infrstructure. Is it a fixed cost internally which can be minimized and absorbed or is it an external bill which can increase significanly as the business expands.
I think the point of the article is to debunk inaccurate speculations from traders who have no technical and real commercial knowledge who may be trying to trash Google's stock for short gain. Not necessarily figure out how many Washingtons Google has to shell out.
Then again, where would be the fun of slashdot if we can't go back and forth on the chicken-and-the-edd argument...
Wasn't the fact that it would cost Google a lot of bandwidth, one of the main reasons why they couldn't adopt vorbis/theora in Youtube? If true, this kind of blows a whole in that argument ..
Luckily, Google's fiber infrastructure is "free" - they don't pay for right of way, to maintain the connections,oversee the network, etc...
These really silly interpretations of "analysis" by financial folks is pretty amusing, actually - I suspect the report actually said something like "ignoring the deployment and on-going costs of their infrastructure Google has essentially free internet access"...
Do they think fiber, routers, switches, networking professionals, and right-of-ways are "free"?
Ken
and I can assure you they don't pay $0
You know, in some English towns, it's legal to kill an accountant if you find him within the walls between sunset and sunrise. I may be thinking of Scotsmen, or vampires, but I think you get my drift.
If you were blocking sigs, you wouldn't have to read this.
But that's my point. The capital investment is already made! It's therefore no longer considered a cost, but an asset. Yes they have to perform maintenance but they are maintaining it regardless of YouTube. They are maintaining it for Google's core business.
Perhaps you think its a retarded way to look at the situation but that's exactly how an accountant would look at it.
No matter how much or little bandwidth they use, operational and infrastructure costs remains fixed.
If I run a shop that trades spare left shoes for spare right shoes, I don't come out even, I'm down the cost of running the shop.
But we're not talking about a trade that disadvantages either or both parties. Capacity is X. Usage is Y. While Y < X, cost remains fixed for both parties. By trading what would otherwise be unused capacity in both directions, both parties are spending less than paying each other for the same thing on a usage basis. If the capacity would *not* otherwise be unused, it becomes a different story.
Yeah, there's maintenance and operational expense and upgrade capex but, at their scale, that still should be a whole lot cheaper than having no internal capacity and buying bandwidth externally. Also, assuming their fiber is shared with other Google businesses, Youtube will only be allocated a percentage of aforementioned costs.
The thing you all are forgetting is that Google didn't run this fiber. Back during the Dot-Com bubble, there were several small companies (and large companies) running fiber everywhere. When the bubble burst, Google was able to come in and buy this fiber from the now bankrupt small companies for pennies on the dollar. The larger companies were even looking to sell the fiber for a reduced cost to try and regain some of the cost associated with running it. So yes, Google did have to pay for this fiber, but it was at a fraction of the cost of what it costs to actually run fiber in large cities.
No, but they're significantly fungible; if you pay enough for infrastructure costs, then you can use it to reduce your third party bandwidth bill, either by simply routing traffic through your own network, or by trading your bandwidth for theirs. Which is why the "zero bandwidth bill" claim is disingenuous if true.
Are you adequate?
Carefully read the TITLE of article... Staring at you from the browser toolbar right now. Take note that it DOESN'T say Google's Bandwidth Bill May be Zero. "Google" isn't in there at all.
But you might just see YouTube in there...
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
so the bandwith vs theora doesn't make any sense?!!!
You just figured that out NOW?
It has been years.......
But it is not like bandwidth itself costs money. It is always the infrastructure that you are paying for. You can either outsource network building and maintenance to a third party, or you can do it yourself.
It is no different than Google having lawyers and accountants on staff, while smaller companies only hire those people when needed. It is more cost effective for the smaller businesses to only pay for what they use, but larger companies are not bound by those same limitations. I am sure that Youtube does not pay any lawyer firms for any legal issues that arise within their operation also.
maintaining fiber? What do you think they have to actually maintain?
Don't they have to polish the ends to ensure faster data throughput?
Monster or Denon will happily sell them a gold-plated optical fibre cable that doesn't need polishing.
Since YouTube's traffic goes largely one direction, why are level-one providers peering with them?
I thought that peering was largely about "you carry my bits and I'll carry yours and they'll roughly balance out". I know that this isn't like physical mail, and that the fiber can be tuned to specialize the bits going in one direction, but I'd have thought that this wouldn't be like your bog-standard interconnect between Level 1 peers.
If I'm reading your post aright, it's because they're using the other bandwidth to provide connectivity between Tier 1 peers. And so the traffic isn't just going one way; the YouTube traffic is only part of the traffic the YouTube network carries.
But they're not thought of as a Tier 1 peer in their own right. Are you saying they should be?
What they are basically saying is that Youtube does not have any development costs because they do not pay any third-party development firms to work on their software.
Own your own fiber.
It is not like that at all.
It's more like a car analogy. If you are already on slashdot, and have to provide an analogy to explain something, you might as well use a car because we already know car analogies and can relate to them easier. It doesn't really "cost" anything extra to use a car analogy, so you might as well do it.
I love meta-stuff.
While all you say is true, there is also the concept of sunk costs and the fact that Google is large enough to worry about being a political and regulatory target. As someone pointed out, Google got a lot of that fibre at fire sale prices (it's not how much you paid, it's how much you saved :-)), so the sunk costs were relatively low. We're also in the middle of a big recession so there may be a surplus of bandwidth available and getting into a price war with major ISPs probably isn't going to make them popular with the companies with whom they need to establish peering agreements. When those large telcos have already gone crying to Congress that they want to be able to throttle a content provider's bandwidth unless they are paid protection money, it's probably a good idea to avoid looking like you're also a competitor trying to undercut them. However, buying something like YouTube, where Google can capitalize on YouTube's popularity with their advertising business, allows them to use that spare bandwidth without raising anyone's hackles as unfair competition (it's just vertical integration Senator, everybody does it!).
It's actually impressively clever thinking that's way out of the boxes that Microsoft and the Telcos have locked themselves into with their business models.
Or an IRS auditor. Spending on infrastructure assets vs. external services often have significant implications come tax time. Which is why accountants care, and why it is not as simple as your abysmally bad example implies.
Laissez lire, et laissez danser; ces deux amusements ne feront jamais de mal au monde. - Voltaire
So if they didn't need all that bandwidth for YouTube, they could be selling their bandwidth instead of trading it.
That`s not how peering agreements work. It`s not like trying to sell power back to the power company.
Laissez lire, et laissez danser; ces deux amusements ne feront jamais de mal au monde. - Voltaire
You're stripping out the context. Some months ago, an analyst contended that YouTube's not making Google any money, because of the cost of buying bandwidth from external provider. The story mentions this, and then claims that YouTube's may be paying $0 to external providers for bandwidth, because of Google's fiber network and peering. In this context, it is perfectly reasonable to ask what are the operating costs of Google's fiber network, because the underlying question is whether Google breaks even on YouTube.
So, to fix your analogy, this is as if somebody bragging that they are thrifty because they don't own a car, and thus pay no money in gasoline, and then somebody else pointing out that the braggart spent a comparable amount of money on taxi fares.
Are you adequate?
Except that given how much traffic YouTube requires, it's more like you're driving across town to do your weekly groceries for your family of four, but you need to do it in a trailer truck because you're also hauling along your friend's containerful of weightlifting gear for his fitness equipment store, which by the way, is not turning any profit.
You wouldn't need the trailer and most of the gas if you were just doing your groceries; an SUV would do the job just fine. (And yes, that last bit was saracsm.)
Are you adequate?
I keep pointing this out. This is how the Internet should work. We all should encourage peering. I had read a long time ago that Yahoo only payed for half of their bandwidth because they had content and the ISP's had eyeballs wanting that content.
So, how this effect net neutrality? The argument is that the big guys can prioritize packets for their own purposes while the small fry doesn't get that level service for their packets. It seems to me that badly written net neutrality laws will only make peering more common, but not necessarily make things more "fair". So, for example, instead of putting a QoS rule to make an ISP's VoIP service "better" than, say, Vonage, all they would have to do is setup an alternate network for all of their VoIP traffic and make sure that it is internally peered to all important routing points. That way, if their transit routers get congested their VoIP service will have plenty of breathing room. Is that "fair"? Of course it is. Big content providers get to be "closer" to users than a smaller independent person. At the same time, if they host their content at a large hosting company, they may also benefit from peering with ISP's.
The point is, idiot, those costs were already paid and accounted for long before Youtube came around. I guarantee that when Google laid in fiber, they laid in 100x what they ever thought they might need. I am sure they, of all people, have the foresight to see that the need for bandwidth is only going to increase and it's way cheaper to add more fiber now than to dig up and add more later. So I'm sure they have bundles of fibers in each of those datacenters that arent even connected to anything yet. The cost is already paid by the advertising department to install the fiber and maintain it. That's already accounted for. So when any new applications come along, like Youtube, the bandwidth provided to them is free. They have so much extra potential bandwidth sitting there untapped that practically speaking it is an unlimited resource to them. Therefore there is pretty much zero opportunity cost here.
I called this about 10 months ago... http://nerdlife.net/why-youtube-cant-cost-165m-a-day/
Why do people listen to the very successful research firm, but not the punk-ass kid in Boston?
Now, I know this is a simplistic equation, but this was just for bandwidth right?
Even if Google was paying $5/Mbps/month for traffic (and that's about $3/Mbps more expensive than I pay for it in quantities greater than 1Gbps), that's 8,000Gbps. That's a huge amount of traffic and equates to about 80 million concurrent streams.
No, you're failing to see an important distinction. The network infrastructure is a fixed cost, but the cost of using the network is not the cost of the network infrastructure; it is the price that the market would pay for transit on that network. Every time Google transmits their own data over their fiber network, they had the alternative of selling that bandwidth to somebody else as transit. The price that they could have obtained from that sale is the cost of that bandwidth.
The point is that when analyzing the cost of their network, you should really think about what the value of the bandwidth of the network is, and compare it to the revenue that they obtain from using the network. If the revenue over the long term turns out to be less than the market value of the bandwidth, then they're better off selling the bandwidth.
Are you adequate?
Maybe magic pixies laid it for them.
They did.
Okay, not exactly magic pixies. But in the dotcom bubble, there were a lot of companies laying fiber everywhere, companies which then evaporated when the bubble burst. Google was then able to buy lots of already-laid fiber for a fraction of cost to lay.
One of the results of how Google got the fiber is that they're not paying interest charges on its construction (either explicit by borrowing to build, or implicit by internally financing and forgoing interest on the cash used to pay for it) anywhere near that of companies that laid their own fiber at their own expense. So those companies are charging maintenance plus interest plus profit for access to non-peers, while Google is only paying maintenance.
That these large ISPs are in the business of selling connectivity to their hundreds (whatever) of downstream ISPs and then on to millions of customers. Even if youtube is mostly one way, if they start really demanding more money, and it impacts their customers access to youtube in any way negatively, they would be seriously annoying a huge part of their customer base. Those customers *would* find out eventually, word would get around that "their" ISP was making it harder/more expensive/impossible to get to youtube. I mean, that's the whole point of being an ISP, sell that connection for a little more than it costs you. They can only push so hard before they start getting nailed with blowback. Peering with youtube might cost them a little, but it saves them a lot in the long run..by maintaining their customer base.
The only thing that might work for them, to try and squeeze more money out, is an across the board cartel push against google/youtube, and then you'd get the feds and fleets of lawyers involved, again, costing serious scratch and a lot of bad PR. And google has deep enough pockets no telling what they might do then, start their own wireless nationwide ISP. Who knows, anything along those lines combined with what fiber they have now or what more they could lay themselves, but they could do it, that's the point, they *could* do it, push come to shove.
Google makes more loot than a lot of nations. They have some juice, and so far at least, the schwartz has been with them.
Your theory falls apart when you consider that not every company is out to bleed every last cent out of whomever they can.
Perhaps Google simply did not wish to enter an overcrowded marketplace, or wanted more then one revenue stream from their investments (Google's Fiber does transmit more then just Google data, their ongoing data costs are near zero because they peer with other high tier providers). I do not believe diversification is in Intro to Economics but it's a fairly good idea for a large business.
It would not be a stretch of the imagination to say that Google gets more out of free peering then it would out of selling that bandwidth considering the amount of bandwidth Google would then have to pay for in order to run it other own services. Everyone wants a slice of the Google advertising pie, this way Google gets to tell them to sod off and has the support of other tier one providers when they want to start charging Google for bandwidth on other sites (and there's been plenty of talk about this).
This has been another reminder as to why libertarian views are blinkered and often just plain wrong, profit is never the only motive.
Calling someone a "hater" only means you can not rationally rebut their argument.