The way I see this, Google wants to put servers in the edge ISPs, aka the telcos, in an effort to save everyone money including those telcos. Google becomes a paying customer, the ISP in question uses a lot less Internet bandwidth and a lot more internal bandwidth, for which Google will pay. This is probably a power play by the ISPs to try to get the highest price from Google that they can.

I doubt it's a latency play, if you were already colo'd at the right places you're talking about sub millisecond benefits here. This is about money, and lowering the load on the Internet's backbone, which translates to time and money to upgrade it, which leads us back to money.

So I agree, the telcos used the WSJ here. But not to block Google, to command a higher price.