Finally, Google and Schmidt go 'All In'

[qi:018] Friday’s letter from Eric Schmidt to the FCC was something telecom wonks have been waiting for: Google has not just stepped up to the lobbying table, it has pushed in its entire stack of chips, challenging the incumbent telco status quo in a way no other entity out there can.

And by making it personal at the highest executive level, Schmidt has taken another important step: he has made telecom and communications a hot-button priority issue, guaranteeing its entry into mainstream business and political discourse.

Given Google’s economic (and now political) stature, the big issues in telecom won’t be constrained to geek-only audiences anymore. Whether Google wins this battle or not, the trend of more open discussion at the topmost levels is heartening, since it can only mean greater focus on the troubling stagnant state of the U.S. communications infrastructure, and what can be done to fix it.

Since we still have a long ways to go before the 700 MHz spectrum auction is complete — heck, the FCC hasn’t even set the initial rules for bidding — it’s premature to guess whether or not Google will win this current fight, since like any good telecom issue the goalposts aren’t just moving, they’re in constant 3D time-warp flux. (Our cynical betting line says Kevin Martin uses Google’s “open” adjectives in flowery introductions for bidding rules but sticks with AT&T and Verizon’s wishes in the fine print; this is known as flirting but sticking with who brung ya to the dance, telco-regulation style.)

But one great side effect of Schmidt putting himself into the middle of this issue is that the debate will now take place at the highest levels, like it should — here we agree with former FCC chairman Reed Hundt, whose startup Frontline Wireless operation openly challenged Verizon’s Ivan Seidenberg to a debate on 700 MHz plans. Such direct exchange between the principals can only help eliminate the rhetorical clutter generated by the various proxies the telcos have traditionally used to fight their battles. Schmidt vs. Jim Cicconi in an email dustup is not just good theater, it’s moving the debate forward by getting the principals on the record, in direct give and take. No hiding behind questionable white papers or economic “studies.” As Cicconi says, Put up or Shut up. Hear, hear.

With his company’s political and economic impact growing at about the rate of its advertising business, Schmidt had basically no choice but to give up his “silent man” act of the past few years, and start speaking directly to D.C. and to the mainstream media that still has a large influence on Beltway decisions. It’s a good move, perhaps overdue, a charge that could be brought historically against most parts of Silicon Valley and not just Google.

Telecom issues may seem to revolve around technologies, like available spectrum and blocking of packets, but in the end the most important part of telecom is the politics — because telecom and communications are in the same infrastructure league as water, roads and airspace, and as such will always face some kind of regulation anywhere it matters. So when it comes to telecom Washington is guaranteed to take its cut, either straightforward in taxes, or as an exchange for influence, as in campaign contributions. To play, you must lobby.

While the sheer historical inertia of the telcos’ lobbying influence may win them the first round of the 700 MHz fight, Google is quickly catching on to the lobbying game, even holding mashup-type camp sessions to show legislators how to join the Internet age. With his letter to the FCC, Schmidt has moved the 700 MHz argument past the “regulation will limit the incentive to invest in new networks” bromide and is instead asking out loud whether the U.S. wants networks that are old and busted, or the new hotness.

Mr. Stephenson? Mr. Seidenberg? I believe the “put up or shut up” ball is now in your court.

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