say, Google colocates it's services with its fiber infrastructure
This is actually the defense Comcast is using with their IPTV services. They don't have to pay anything to move that data over public lines, so they don't "charge" extra for it (by "charge", I mean putting it against the caps they recently removed). On the other hand, Netflix et al does go across public lines that Comcast does have to pay for, and they do "charge" for that because they themselves are being charged for it.
Local CDNs are troublesome when it comes to the difference between WAN and last-mile prices for content providers/deliverers.
This is actually the defense Comcast is using with their IPTV services. They don't have to pay anything to move that data over public lines, so they don't "charge" extra for it (by "charge", I mean putting it against the caps they recently removed). On the other hand, Netflix et al does go across public lines that Comcast does have to pay for, and they do "charge" for that because they themselves are being charged for it.
Local CDNs are troublesome when it comes to the difference between WAN and last-mile prices for content providers/deliverers.