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700 MHz Auction: Google Takes Another Shot At Verizon

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The Verizon (VZ) vs. Google (GOOG) squabble over the 700 MHz auction is getting nastier and nastier. A few weeks ago, Verizon went to the courts, seeking to block the Federal Communications Commission from adding open-access provisions to the auction of airwaves that are considered beachfront property when it comes to wireless broadband.

RCR Wireless reports that Verizon might have been doing some behind-the-scenes lobbying in order to get the provisions watered down. In a blog post, Google is taking issue with Verizon’s contention, and points out that they have been in touch with the FCC.

Verizon appears to be arguing that two of the key provisions in the auction rules designed to spur competition — the requirements for open devices and open applications — should not apply to a licensee’s own devices that use this block of 700 MHz spectrum. Their theory is that so long as “unlocked” devices (those that can be configured to work with any network) are theoretically available to consumers through other means, the winning bidder in the auction shouldn’t be required to make its devices open as well. From our perspective, this view ignores the realities of the U.S. wireless market, where some 95 percent of handsets are sold in retail stores run by the large carriers.

We should expect a volley from Verizon any moment now.

19 Responses to “700 MHz Auction: Google Takes Another Shot At Verizon”

  1. Tom Coseven

    Om, this is beginning to sound a whole lot like the section 629 arguments over cablecard in the late 90’s. The cable companies and Commissioner Powell (before he was Chairman) argued that as long as some 3rd parties were offering cablecard boxes, the cable companies should be able to offer closed boxes — after all, consumers would theoretically have an open alternative and why should the cable companies be required to build higher cost boxes.

    Incumbent telecom companies hate open devices. From Carterfone until now, the key to competitive telcom markets is mass availability of open devices.

  2. Google kind of caught in a trap here. If they lower themselves to the same [ gutter ] level as Verizon and start down the pay-to-play…err, I mean “campaign contributions through reputable lobbyists” path to get their way, they’ll have lost by doing evil.
    If they don’t start bribing…oops, I mean “contributing” the telcos will have them removed from the auction.

  3. This issue will eventually take care of itself. The real future is in WiMax – wireless broadband internet service nationwide. When the WiMax network is complete you can throw out your proprietary cell phones and simply buy one that works on the “open” internet protocol. You can already buy internet phones today – go to and click on “Shop.”

    Goodbye Verizon Wireless – you’ve taken my money long enough!

  4. Davis,

    I don’t think most consumers know that they can save a bundle by going the prepaid route. Most people know the “big four” carriers (thanks to heavy marketing) and maybe a regional or two. Ergo most consumers buy their phones from the big four.

    I admit, that I’m ignorant of the prepaid market and what it offers, but I’d love to learn more. What are the good prepaid carriers that can help me save a bundle?

  5. It’s true that most of the phones are sold by the carriers, but Verizon does bring up a decent point. No one makes consumers buy their phones from the networks, they do it because consumers can’t resist instant gratification, even if it means being locked into non-competitive monthly service pricing. When I bought my phone, I made sure that it was unlocked. Now I can use prepaid and save a bundle. If consumers are willing to give up their rights in exchange for that quick fix, should regulators really be messing with that? I think it’s important for consumers to have options, but I also think businesses should have rights over how they want to price their services.