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The experts call the 700Mhz wireless spectrum the last piece of undeveloped beachfront real estate in cyberspace, and Google [GOOG
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] wants it.
"I'll tell you, even at Google you can't make a $4.6 billion commitment without being serious," says Chris Sacca, Google's vice president who's spearheading the company's aggressive lobbying effort of the FCC to make sure its voice is heard in the upcoming auction of wireless spectrum. "What's at stake here is the future of the internet and how accessible it's going to be to the largest number of people possible," Sacca tells me.
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Source: Aloha Partners |
This is all about the wireless spectrum that comes available during January 2008, when the FCC auctions off the technology to the highest bidder; technology that will be abandoned by TV broadcasters a year later when they evolve their signals from analog to digital. The 700Mhz spectrum is extremely valuable since it goes anywhere a TV signal can, which means wireless providers can offer a high-speed wireless network that doesn't need line-of-sight and can penetrate walls. Some estimates say the spectrum could go for as much as $15 billion.
Of course, AT&T [T
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] and Verizon [VZ
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] want to own it, the so-called "incumbent" carriers in this debate. But a new crop of companies, including Google, Yahoo [YHOO
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], eBay [EBAY
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] and others, also see enormous value in propagating their brand and their software across a high-speed wireless network that they control. So, to that end, Google has asked the FCC to make sure the new network, whoever ends up owning it, is completely open, allowing consumers to use whatever device, and whatever software, they want to use on it. That would be a revolutionary change in an industry that prides itself on control of all kinds. Think about it: buy an iPhone today, and it only works on AT&T's wireless network. Under Google's proposals, it could conceivably work just as well on Verizon's network.
Google fully believes that given the choice, consumers will choose its software for things like mobile search. Google doesn't want the wireless providers acting as a kind of gatekeeper determining who gets to use what and when. The wireless providers argue that if the FCC adopts Google's suggestions, the spectrum auction would essentially be worthless. And that's why Google has stepped forward to say it would bid a minimum of $4.6 billion if its measures are adopted.
"Their argument is they want to buy everything. It is kind of like talking to Saudi Arabia about oil. They like to control all of it," former FCC chairman Reed Hundt tells us this morning, talking about the wireless companies.
Don't be fooled here: this is not David vs. Goliath. This is Goliath vs. Goliath. Some experts suspect that Google is trying to build out a free, high-speed, nationwide wireless network of its own. Trying to become a kind of Ma Bell for this millennium. Google has shied away from its overall, long-term strategy, but Sacca tells me this morning that it's not out of the question. The company is committed to an open network, open to competition, free from the controls that he says have stifled innovation.
His simple message to the FCC? "Take concrete steps to go ahead and mitigate the impact of monopoly and lack of competition in the access space. Make sure that users have access to the internet sites they want to go; to the software applications they want to go to, and can bring the devices that innovative device manufacturers are making to networks," he says. Make those changes and Google will participate in the auction.
Verizon answers: "As it stands now, Google is free to participate in the auction like all other companies and implement its business plan if it is successful in winning spectrum. However, Google’s filing urges the FCC to adopt rules that force all bidders to implement Google’s business plan - which would reduce the incentives for other players to bid."
Valid point. Google wants fair rules. The wireless companies say existing competition makes the whole process fair and rules changes aren't necessary. But just by Google jumping into the debate and becoming a new competitor means more competition, either real or just rhetoric.
Look for a compromise, look for Google to bid, and look for serious change in the way wireless companies do business. We saw it (finally!) with number portability. And we'll see it again.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes