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from: Ars Technica

Google Announces Intent to Bid on 700MHz Spectrum Auction

From ars technica, July 20, 2007
By Eric Bangeman

In a letter sent to the Federal Communications Commission today, Google CEO Eric Schmidt announced his company’s intentions to enter the bidding for the 700MHz spectrum early next year—if Google’s proposed auction rules are adopted. Earlier this month, a draft of Martin’s proposed auction rules were released, rules which embraced some principles of open access, but left proponents of the principle wanting more.

Google is one of those who found Martin’s proposal lacking. The company would like the FCC to embrace four additional conditions as part of the auction rules: open applications, open devices, open services, and open networks. Should the FCC agree to do so, Schmidt says that Google will jump in on the bidding at the FCC’s $4.6 billion reserve price.

The four conditions outlined by Google in its letter announcing its intent to bid would go a long way towards ensuring that the freed-up spectrum fulfills its potential as a “third broadband pipe.” Under a truly open network, consumers would be able to use any application on any device that they want. Also, winning bidders would be forced to license their spectrum at wholesale prices, which would keep one or two companies from gobbling up all the spectrum and limiting competitor (or even customer access to it). Lastly, ISPs would be able to interconnect freely to the 700MHz network at any technically feasible point.

Incumbent wireless providers like Verizon have been critical of calls for an open network. In its PolicyBlog, Verizon has called the open access proposals a case of “imposition of regulatory judgments and intervention in the markets.” Instead, telecoms would like to see the FCC take a hands-off approach similar to the one it has taken with cable and DSL when it comes to the 700MHz spectrum.

Proponents of open access argue that the FCC’s hands-off deregulation approach is a significant reason for the sorry state of broadband competition in the US and are fearful that the likes of AT&T and Verizon would snap up the additional spectrum and underutilize it. Open access advocates see the spectrum auction as a way to change the broadband landscape in the US.

Google’s letter is significant in that it marks the first commitment by the company to participate in the auction—if the auction is held on its terms. It’s also a signal to the FCC that, should it adopt open access rules for the auction, at least one company is interested in making a play for the spectrum.

Google’s interest in wireless broadband is not a new phenomenon. The search giant is part of the White Spaces Coalition, a group of companies that includes Microsoft, Dell, and Phillips that wants to see the FCC approve devices that would use the white spaces in the low end (under 698MHz) of the television spectrum to provide wireless broadband. Winning the auction would put Google in the position to own and operate its own broadband network, where it would be in a position to ensure that its services are available to everyone on its network. Unless the company changes its mind about its conditions for participating in the auction, a Google auction victory would ensure that consumers would have a number of choices for wireless broadband providers, as the winning company (or companies) would have to lease the spectrum at wholesale prices.

The auction will be expensive—last year’s auction for a much-less-attractive slice of spectrum netted the US Treasury $13.9 billion—but Google has the deep pockets needed to be a player in the auction, should it so desire.