Yes but the instant Google bought them they stopped burning millions on bandwidth, because even at that time Google had more latent fiber than anyone else. As I've said here dozens of times hardware has been the key to Google's success. Fiber in the ground is a big part of it.
YouTube had peering agreements in place even before the acquisition. And the instant the contract was signed, Google's fiber wasn't near YT's (then) five-six locations, so it was of little use. Actually, in November 2006 YT had a lot more (frontend) egress bandwidth than Google, whose dark fiber was mostly for its internal backbone. It took a couple of years before there was an unified CDN, at which point YT had already grown many times over.
