Google Dons Goggles
Says It Must Study Rules Before Bid on 700-Mhz Spectrum
By Ted Hearn -- Multichannel News, 8/5/2007 8:00:00 PM
Washington — Google was noncommittal about jumping into a major federal spectrum auction moments after the Federal Communications Commission adopted bidding rules Tuesday that were at least partly designed to elicit a multibillion-dollar investment from the Internet-search goliath.
“We’re going to need some time to carefully study the actual text of the FCC’s rules, which are due out in a few weeks, before we can make any definitive decisions about our participation in the auction,” Richard Whitt, Google’s Washington telecommunications and media counsel, said in a press call.
Before the rules were set, Google promised FCC chairman Kevin Martin that the company would bid $4.6 billion if the agency adopted four auction conditions. The agency embraced two but refused two others that Martin said would stifle investment: requiring auction winners to function as wholesalers and to interconnect their networks with third-party Internet-access providers.
The FCC voted 4-1 to establish ground rules for an auction expected to bring the U.S. Treasury at least $10 billion. Although the auction must begin by Jan. 28, 2008, the spectrum won’t become available until Feb. 17, 2009, when the country’s TV-broadcasting system converts from analog to digital transmission.
The FCC is selling 62 Megahertz of spectrum in the 700-MHz band — a highly desirable slice of the airwaves that can easily transmit voices, video and other media through elevator doors and into basements from dozens of miles away.
The big battle occurred over Martin’s proposals for about one-third of the spectrum. On that 22 MHz of spectrum — which is expected to go to one national provider — the licensee must allow consumers to use any handset and download any application, a policy intended to break carriers’ alleged service-handset domination of the consumer base.
“Customers will be able to use the wireless device of their choice and download whatever software they want onto it,” Martin averred.
Denying the FCC had adopted network-neutrality mandates, Martin said the conditions were necessary because consumers were forced to junk handsets when changing carriers and barred by carriers from downloading applications.
“Wireless consumers in many other countries face far fewer restraints,” Martin said.
FCC Republican commissioner Robert McDowell dissented, his first dissent on a major issue since he joined the FCC in June 2006.
The market, he said, was providing consumers with more options, including 10 handset models that enable Internet access over Wi-Fi networks, which provide small “hot spots” found in coffee houses and airports.
“I am not sure it make sense for the majority to take credit today for spurring device and application portability when it’s sprouting on its own,” McDowell said.
Free-market advocates continued to hammer Martin for not backing an auction that sold the airwaves to the highest bidder without conditions.
“The FCC’s decision to rig the 700-MHz auction at the suggestion of companies such as Google will harm wireless service and rob taxpayers,” said Rep. Joe Barton (R-Texas), the most senior Republican on the Energy and Commerce Committee.
Some of the spectrum must be used to build a national network that multiple emergency organizations can use to easily communicate with each other when responding to major disasters, like the Sept. 11, 2001 terrorist attacks on New York’s World Trade Center.
In the commercial arena, the 22-MHz block will be sold in 12 regional parcels under bidding rules designed to facilitate the acquisition of all 12 by one bidder seeking a national footprint. If the FCC fails to obtain about $4.6 billion for the 22-MHz bidder, the auction is canceled and a second one will be held without the open-network conditions.
McDowell scorned this “Plan B” approach. “Perhaps the majority has only a little more confidence in its plan than I do,” he said.
FCC Democrat Michael Copps, disappointed that Martin would not agree to more of Google’s demands, said that if the $4.6 billion reserve price isn’t met, then the FCC would have failed to provide cell-phone users with more choice.
“The end result would be: Same old, same old,” Copps added.
Since the rules left no one totally satisfied, Martin suggested that maybe a Goldilocks happy medium had been achieved.
“I can’t help be reminded of the Three Bears I keep reading to [my son] Luke at night,” Martin said. “I hope one day we will think we got it just right.”
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Looking forward to it! Keep the news coming.
GoogleMobilePhone.net
Gaines - 8/4/2007 9:09:00 PM EDT
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