I wrote a few days ago about the Intel anti-trust settlement with the Federal Trade Commission. Those words stand unchanged but some readers have asked for more so I have given the deal further thought and have what might be a better context in which to place it — Too Big to Fail. This isn’t “too big to fail” in the Bush/Obama big bank context in which failing and stupid institutions are saved at any cost to the public. Intel, in contrast, literally is too big to fail, at least right now.

Everything about the Intel/FTC settlement screams of one thing — Microsoft. Redmond’s multi-year nightmare with the FTC, DoJ, and the attorneys-general of several dozen states wasn’t lost on Intel, which is a more rational company and doesn’t want a Microsoft-like anti-trust experience. Both companies are guilty and both are paying something for that guilt, but Intel clearly wants to avoid the decade of pain and distraction suffered by Microsoft.

For the record, Intel admitted no wrong-doing in the settlement. But they also promised to specifically change their behavior.

What this settlement (and the previous one with AMD) does for Intel is clear the decks for future action. Now Intel can attack new market segments and be aggressive in existing market segments within the rules of the FTC deal.

Microsoft was paralyzed with the FTC breathing down its neck. Intel is not paralyzed.

Roughly $2 billion in payouts and Intel is a free bird — a rich free bird at that — having proved that crime does pay.

These settlements will effectively pay for themselves in two months at current Intel profit levels.

And as a result, Intel management bandwidth is now opened-up, hopefully not for more mischief.

Under the FTC deal Intel will open some patents to AMD and NVIDIA. This is healthy for Intel. If NVIDIA or AMD dies, Intel automatically becomes a monopoly subject to further regulation. So keeping NVIDIA and AMD alive and at least marginally healthy is in intel’s best interest. That’s an important take-away from this column: Intel needs AMD and NVIDIA.

Here’s the other big take-away: Intel has reached a scale on the cost equation where small volume companies can survive but not compete. AMD and NVIDIA survive by the grace of Intel, not despite it.

Intel’s latest gross profit margin is 65 percent!!! The company could easily cut prices and kill both AMD and NVIDIA. But Intel won’t do that. This realization ought to play an important part in AMD and NIVIDIA strategy. AMD gets that, but I think NVIDIA somehow doesn’t.

If NVIDIA and AMD maintain a few percentage points market share it is healthy for the entire ecosystem. Remember that as-is Intel is earning $3 billion per quarter. That’s Microsoft-scale money without the Microsoft-scale problems of a platform shift that risks leaving that company marooned.

This is all good news. So why hasn’t the market rewarded Intel with a big boost in its share price? Because conventional wisdom on Wall Street says that this freed-up management bandwidth will just help Intel launch another money-losing business. Remember the billions lost on Larrabee?

Conventional wisdom is often correct.