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Summary:

The Federal Communications Commission is going to set rules for the upcoming 700 MHz auctions tomorrow, a decision that could potentially alter the wireless landscape. The auction has resulted in a war of the words, with the Google Camp trading barbs with Verizon and AT&T. Cisco […]

The Federal Communications Commission is going to set rules for the upcoming 700 MHz auctions tomorrow, a decision that could potentially alter the wireless landscape. The auction has resulted in a war of the words, with the Google Camp trading barbs with Verizon and AT&T. Cisco has weighed in with its two cents. Each side is making good arguments, though none of them impressive enough, at least from an average person’s perspective.

Google wanted the winner of auctions to build a network that not only allowed any device to connect to the network, but also it wanted the network to be open to other third parties including companies like Google. These requirements would make the new broadband wireless network more favorable to companies like Google.

Google even offered to bid at least $4.6 billion for the wireless spectrum if the FCC favored the rules put forward by the search engine giant. Not surprisingly, that drew a lot of criticism from the phone companies and their extended lobbying arms. FCC Chairman Kevin Martin came up with a plan that requires the winner to use frequencies to build networks that allow any device to connect to that network. Phone companies didn’t like that either. Anyway Martin’s proposal was like being “almost married.”

The Washington Post is now reporting that Google may end up bidding for the spectrum regardless of the rules. Google’s bid to get more clout in Washington D.C. is not going so well, and like many tech companies before, it is stepping on too many toes. Whether it ends up getting its way or not, there are many questions Google need to address before they can basically convince me that they are St. Peter.

For instance, does Google become the clearinghouse for the network and who is allowed to connect to the network, and where? Where are the rules that ensure that the network isn’t tilted in Google’s favor? If the company is going to spend shareholder money – $4.6 billion or more – and Wall Street as we know would want to know where is the return on investment? What makes me more skeptical: Google has teamed up with Clearwire, a company not a shining example of open access.

PS: I had sent Google a list of questions earlier, but never heard back from them. I guess, they were too busy coming up with strategy to win against the phone companies.

By Om Malik

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  1. Google bids $5 billion on wireless bandwidth, and how many more billion on tower leasing, switching hardware, phone subsidies, marketing, customer service reps and centers etc etc etc ?

    Maybe with partners.

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  2. While I may have questions about Google’s motivations, I’d still like to see things shaken up for the traditional telcos.

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  3. Om:

    You say Cisco has weighed in with it’s two cents. I haven’t seen any posting in your web site pointing to what their take is. May be you can provide pointers to them as well in this posting.

    Thanks
    Venkatesh

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  4. Om, thank you for pressing Google. I view Google’s announcement of providing apps for Sprint/Clearwire as a potential aboutface from their previous support for net neutrality.

    Unlike wireline broadband, mobile was designed from the ground up for the walled garden. The HLR/HSS creates a captive billing relationship with the subscribe even as he roams to other networks. This is what Verizon wants to import to FiOSS through VASIP.

    It would be great to have Google state publically for the record that they don’t support captive billing for their applications! Otherwise, they are a Verizon clone.

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  5. I suspected Google threw more conditions in the proposal than they expected to actually get. Or possibly, it was a masterplan, a bluff as far as third party use. Wouldn’t it help Google if they didn’t have to share/lease the spectrum?

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  6. Google or no Google, there are a couple of points that are difficult to dispute: The wireless carriers (now basically controlled by the country’s telecom oligopoly) have far too much control over how the country’s wireless spectrum is used. They’ve basically locked it up, and have had a devastating effect on its innovation. They’ve learned from their parents what it means to lose control; thankfully the major telcos were too slow to see the Internet coming, or they would have tried to control that as well. Imagine where we would be today (or wouldn’t be) if that had happened.

    The auction rules should, at the very least, require:
    –True openness – in terms of devices/technology that can be used on the spectrum (basically what was argued for in the Skype petition)
    –That whoever wins the auction have to build-up the network (otherwise the incumbents will be able to buy it up and shelve it)

    Ideally, the spectrum will also have a wholesale requirement. Google or no Google, what we’re talking about is public spectrum, that is supposed to be used for the benefit of the American people. If there’s no wholesale requirement, it will be far too easy for the incumbents to keep complete control over the future of development and innovation in the wireless space (even if the new spectrum is required to be built-out and open).

    And let’s not forget that this is not a battle between the telcos and Google. There have been plenty of other voices pleading for a change from the status quo (and unlike the voices supporting the telco side, these are independent voices that are not simply paid to support a particular position).

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  7. From all accounts, we are headed for an open-device network, but with no spectrum sharing. It’s been stated by many that this would be truly useless for openness.

    Can someone please explain.

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  8. In other words, why can’t we have a wireless net neutrality, independent of who owns the spectrum.

    I suppose the devil is in the details.

    Mr. Martin is probably one rich man right now. :-)

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  9. Google is not going to bid, and they are going to learn quickly that they need to devote a lot more money to their lobbying efforts to have an impact.

    This whole thing is an arrogant public relations scheme that is going to backfire on google without a bidding partner.

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  10. You wrote: Each side is making good arguments, though none of them impressive enough, at least from an average person’s perspective.

    I respectfully disagree. Are you implying that a truly open wireless network is not impressive enough from the average person’s perspective? Why ever not??

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