Martin Supports Some Google Auction Rules
FCC Chairman Changes Tone on Net Neutrality, But Still Doesn’t Meet Google’s Conditions
By Ted Hearn -- Multichannel News, 7/10/2007 1:01:00 PM
Some winners in a pending federal spectrum auction would need to comply with network-neutrality mandates and other open-network conditions, according to controversial rules endorsed by Federal Communications Commission chairman Kevin Martin.
As a Republican appointee of President Bush, Martin has strongly resisted net-neutrality mandates favored by Silicon Valley giants Google, Yahoo, eBay and Amazon.com. But he evidently decided to shift gears, upsetting free-market advocates that say regulation is unnecessary unless the FCC can demonstrate market failure.
Congress is expecting the 700-megahertz auction -- which has to begin by Jan. 28, 2008 -- to bring in at least $10 billion, but Martin’s rules run the risk of depressing the value of the airwaves.
“Any rules that require a portion of the spectrum to be used only on an open-access/net-neutrality basis will diminish the value of the spectrum to be auctioned. Because the license holder will be restrained in putting the spectrum to its highest-value use, it will be worth less at auction than it would be in an unrestricted auction,” said Randolph May, president of The Free State Foundation, a free-market think tank based in Potomac, Md.
According to an FCC official, auction winners of a 22-MHz block would be required to allow end-users to run any application and attach any device that wouldn’t harm the network -- proposals designed to give consumers more choices than wireless carriers currently offer. These conditions would not apply to the remaining 38 MHz being put up for sale, the FCC official said, confirming comments Martin published in USA Today.
“While details are not yet available regarding the specific proposals he plans to make to his FCC colleagues, I commend chairman Martin for his recent statements, which recognize that the wireless marketplace is insufficiently competitive and innovative today due to current market structures and practice,” said Rep. Edward Markey (D-Mass.), chairman of the Subcommittee on Telecommunications and the Internet.
Some reports billed Martin’s proposals as a victory for Google. But in a filing Monday, Google told the FCC it wanted Martin’s rules to cover all 700-MHz licensees, in addition to requiring them to provide wholesale access to their spectrum and to interconnect with third-party Internet-service providers. Martin’s rules don't appear to meet Google even halfway.
In the filing, Google said that if the FCC failed to endorse all of its policy prescriptions, AT&T and Verizon Communications would dominate the auction.
“Without the introduction of open broadband platform, Google’s auction analysis strongly suggests that incumbents almost invariably will succeed in procuring the larger commercial-spectrum blocks,” Google Washington telecommunications and media counsel Richard Whitt said.
Whitt added that although Google hadn't decided whether to bid in the auction, the company was weighing post-auction business arrangements, including "joint partnerships and anchor tenancy."
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