My guess is that the proposal probably included the cliche "win/win situation," had already been sitting in someone's back pocket, and the raising of it was either sparked by some privacy-related news story -or- a market event of some kind. At the end of the day, it doesn't really matter.
I think there are a handful of techs that lend themselves to natural monopoly--basically anything where the expense of building sufficient infrastructure for a minimally-competitive product requires previous success in the market. This is true whether the infrastructure is copper lines or a body of previous searches.
That means you're either one of the first ones there with low cost of entry and building on your own successes (Google); or you're shifting to the market from success in an unrelated area (Bing); or you're essentially locked out unless you can somehow acquire access to that infrastructure.
My guess is search will eventually turn into an antitrust-regulated industry. Really depends on whether up and comers like DuckDuckGo can really stay relevant based on ideology and whether old players like Yahoo can really re-enter the market successfully.
But the most likely scenario really appears to be a duopoly between Google and Bing at best, and more likely simply a monopoly for Google.
The analogous solution to telecom would be forced access to search queries for alternative providers (a la CLEC/ILEC) but privacy concerns will make the situation interesting to say the least.
Possible it may eventually turn out that mainstream search engines simply have no specific privacy protection, at least for aggregate data. Since that's in both the corporations' (market leaders aside) and government's best interest, seems plausible. That'd be a lot of power behind it.
