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Google, Yahoo, and eBay may not see eye to eye with each other, but when it comes to broadband access, they all agree that the future is too much in control of the incumbents who can squeeze them dry. It is one of the reasons the […]

Google, Yahoo, and eBay may not see eye to eye with each other, but when it comes to broadband access, they all agree that the future is too much in control of the incumbents who can squeeze them dry.

It is one of the reasons the three heavyweights, plus Intel, have teamed up with satellite carriers EchoStar and DirecTV to lobby the FCC about how the 700 MHz wireless spectrum auction is held, according to a research note published by UBS Research this morning.

The 700 MHz slice of the spectrum is apparently pretty good to offer broadband, since it can penetrate walls and other obstacles. The spectrum is currently in the hands of analog TV operators and US government is looking to get it back. All Analog TV stations have up to February 19, 2009 to go digital or go dark. Multichannel News speculates that this slice of spectrum could bring in about $10 billion but when they are done with the whole 60 MHz slice, the total could tip $30 billion. Of course, the broadcasters are crying foul and saying – what about those analog TV owners … yada yada yada!

“This coalition does not mean these companies will actually bid, but that they want a say on how the auction will run,” says Ben Schachter, Internet analyst with UBS Research. Google, ahead of last year’s AWS auctions was rumored to be bidding for the spectrum but in the end it never did.

These are content companies with no control of the pipe into the consumer homes – scary prospect if the network neutrality concerns do come to pass. Satellite providers desperately need IP pipes if they need to stay competitive with the interactive services such as Video on Demand from cable television and IPTV offerings being planned by the telecom operators.

“’Network-less’ content aggregators (Yahoo, Google) and online transaction companies (EBay) have been concerned about potential last mile toll for the customer to access their services,” writes UBS Global media Strategist Matt Coppet in a note to the UBS clients this morning. “for the coalition providers, the only way to protect their unencumbered access to the consumer could be to build a third data own network.”

By Om Malik

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  1. Om,
    Link posted about this announcement at Verizon’s PolicyBlog earlier this week — and addresses its impact on NN, too.

    Link concludes his post: “Whether any of these projects work out in the rough and tumble of the market, they clearly provide further evidence that the broadband market is competitive . . . and make it even more apparent that net neutrality regulation is a solution in search of a problem.”

    For the whole post: http://policyblog.verizon.com/policyblog/blogs/policyblog/linkhoewing9/247/competition-in-broadband-more-evidence.aspx

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  2. Another reason Clearwire is attractive?

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  3. And as AT&T is giving Yahoo! the stiff arm.

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  4. Anyone wanting to know something about the use of wireless for broadband should have a good look at this report commissioned by our good friends of Ofcom in the UK.

    There is no way one can do real proper broadband in the 700Mhz spectrum. Not even with the whole 60Mhz chunk! Basically it comes down to simpe math. You can do about 2 bits on Herz. 60 million herz equals 120mbit/s. However this is a shared medium and you need channels for up and down. So even if you factor in all kind of cool technical tricks, you’re still stuck with a maximum of 10mbit/s down for 10 households with 2mbit/s up. Just how close do you really want to bring that fibre to the curb. The costs of roll out of a network build in this way are probably higher than that of AT&T’s U-verse offer, which can work over 500 yards and is able to serve alot more houses with one drop point. This might be an interesting technology for use with mobile wireless technology, but one still needs a whole lot of antenna’s, much along the same lines as HSDPA.
    http://www.ofcom.org.uk/research/technology/overview/ese/lastmile/ With a tip of the hat to Bill St. Arnaud for pointing me to the report http://billstarnaud.blogspot.com/ And to anyone shouting that developments in technology will save us: Have a good look at the work of Claude Shannon. it’s like saying you can break the speed of light :-)

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  5. Competition makes it better for us customers. No wonder the telecos are such jerks.

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  6. And I used to think air was free… Maybe if pollution increases there will be a surcharge to breathe. I wouldn’t be surprised if Google “has a say” in how other public policies are designed/implemented.

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  7. The Content Providers need the last mile to remain viable (profitable) and they have 2 ways to gain access to the end user.
    1. Wired Access in a partnership with the local Service Provider (Telco or MSO). This could be very profitable for both parties and I think the googles and Yahoos of the world would find a willing party in the 1200 plus Independant Telco who own much of the national last mile.
    2. Wireless Access in a partnership with CellCo or purchase their own Spectrum and contract with local entities to install, operate and maintain this network.

    If the FCC sets up the auction and requires a Regional (SE) bid it will effectively limit who can bid (Big boys only) vs opening it up to Local market coverage.

    The likes of Google already own the Nationwide Backbone (Fiber) and Internet Access piece as well as all the Content so all they need to rule this end to end network is a partnership with the locals. RBOC/Independants and or MSO.

    Jacomo

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  8. So Google et al. are going to lobby, but what is their position? That telcos shouldn’t be allowed to bid? The article is frustratingly vague on this point.

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  9. [...] driving down prices for consumers and opening up greater access to more content providers. Last week Google,Yahoo eBay, Intel, EchoStar and DirecTV showed their own broadband access ambitions by [...]

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  10. [...] week we reported on the web giants Google, Yahoo and eBay setting aside their differences and joining forces with satellite television [...]

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