Google will Bid for Wireless Spectrum

[Kris Kumar]

<div class='os_post_top_link'><a href='http://gigaom.com/2007/07/20/google-will-bid-for-wireless-spectrum/' target='_blank'>http://gigaom.com/2007/07/20/google-will-bid-for-wireless-spectrum/</a><br /><br /></div><i>"If you have been following the drama around the 700 MHz wireless spectrums, then you know a lot of mud has been flung around by all parties involved: FCC’s Kevin Martin, The Google Camp, Frontline Wireless, and of course the incumbents, AT&amp;T and Verizon. They are all trying to basically control the piece of spectrum that is going to be vacated when analog television shuts down. The spectrum is going to be auctioned off in February. This morning, Eric Schmidt <a href="http://www.google.com/intl/en/press/pressrel/20070720_wireless.html">sent a letter</a> to the FCC and said Google will also bid for the spectrum in the wireless auctions, and have indicated that they are going to bid a minimum of $4.6 billion, as per requirements. This is a gutsy move by the search giant: it is saying we got the money and we will spend it to get our way. Google is using money to force the issue – something Microsoft used to do. They know Bells have some, if not many financial constraints. Given how much money they have tied up in new efforts like 3G and broadband upgrades, the Bells should be looking at an auction which can get as crazy as the auction for a rare Rembrandt."</i><br /><br /> <img src="http://www.smartphonethoughts.com/images/Kris-200707-Google.jpg" alt="User submitted image" title="User submitted image"/> <br /><br />Lately we have been hearing about Google flexing its money power, and doing a lot of lobbying in Washington D.C. Its latest efforts sound really very good on paper and sound pro-consumer, but the little bit of the capitalist mind in me wonders if the open platform will benefit the winner of the 700MHz wireless spectrum? One of the reasons why the wireless carriers setup restrictions on the types of applications and handsets, or setup the <i>walled garden</i> is because they want to protect their investments. Am I brain-washed? If are interested in reading more about this story, then I definitely recommend you to follow all the links in <a href="http://gigaom.com/2007/07/20/google-will-bid-for-wireless-spectrum/">GigaOM's post.</a> Also, this PC World <a href="http://www.pcworld.com/article/id,134905-c,wirelesstechnologyservices/article.html">article</a> has a good writeup. We would definitely like to hear your thoughts on this interesting proposal from Google. Is Google really interested in winning this auction? I know they have the money, but are they really interested in winning the bid or just getting their terms across?

[Mike Temporale]

I think they want it, but I can't figure out how it fits into their existing products. Plus it scares me a little to think that Google would control that as well. It's already kind of scarry what they can track about someone. :worried:

[raaden]

Kris,

The last couple of sentences in your post is exactly what I have been thinking the whole time since reading the story about goog's requested concessions and the fact that they will "consider" bidding in the auction.
The only things I can come up with are:
1. Google really does want the spectrum and is trying to scare off the other potential bidders by forcing it to be an open spectrum. This would substantially lower the price of it for them.
2. Google doesn't want to own the spectrum but simply to use it. If the spectrum is open to consumer uses what good is it to "own" it. They can then use it as they see fit and the cost to them is nil... well except for the insane amounts of lobbying money they are throwing around lately. Still that is much cheaper than the cost of owning the license.

As far as monetizing their investments that is easy they have plenty of apps that they can deliver wirelessly (whether or not they have a gPhone) and within a few years if things go googles way in the auction you will begin to something comparable to a gps device that can be manufactured any of the big players using this spectrum and googles apps. Not to mention that they can then force their own version of net neutrality over this spectrum.

One thing is for sure this will be an interesting story to follow.

[onlydarksets]

Google has a new public policy blog that talks about this a lot. Check out this post:
http://googlepublicpolicy.blogspot.com/2007/07/restoring-competitive-balance-to.html

Scroll down to "Un-skewing the spectrum auction" for info on their rationales for entering the market.

[Mike Temporale]

Google has a new public policy blog that talks about this a lot. Check out this post:
http://googlepublicpolicy.blogspot.com/2007/07/restoring-competitive-balance-to.html

Scroll down to "Un-skewing the spectrum auction" for info on their rationales for entering the market.

That doesn't really answer the question of why they want it. Just why it should happen.

If they win, there's a big impact on your attention data and Google's ability to target ads more effectively to you.

[onlydarksets]

Google has a new public policy blog that talks about this a lot. Check out this post:
http://googlepublicpolicy.blogspot.com/2007/07/restoring-competitive-balance-to.html

Scroll down to "Un-skewing the spectrum auction" for info on their rationales for entering the market.

That doesn't really answer the question of why they want it. Just why it should happen.

If they win, there's a big impact on your attention data and Google's ability to target ads more effectively to you.

It does, though, in that they don't actually want to own the spectrum - they just want whoever does win the auction to be forced to use open platforms.

Regardless of who wins the bidding, however, the end result is an auction that yields a fair market price, with the added bonus of a new broadband network that is open to all comers. The American people get full value for their spectrum, plus open broadband platforms -- and even the possibility of a real third pipe competitor. Not a bad deal overall.

Google then gets the ability to enter an open-platform spectrum on their own terms, instead of being held captive to the current closed-platform wireless carriers.

[AdamaDBrown]

I think they want it, but I can't figure out how it fits into their existing products.

Well for starters, there's already an argument to be made for it being worth the investment. The 700 MHz band is considered to be incredibly useful spectrum for the fact that it has very long range coupled with high bandwidth. A single 700 MHz tower could theoretically project internet access--and with it, voice service, video, a dozen other things--up to 20 miles in any direction. That makes for pretty low startup costs compared to potential customers.

As for how it fits with their existing products, if you stuck a Google Talk client on a service-compatible mobile device, then you've got a flat rate VoIP cell phone. Add a GPS receiver to that device, and Google Maps becomes a navigation tool. GMail, Google Calendar, Browser Sync, Video, News, Books, a half dozen other things: Google has all the infrastructure available to be a lifestyle gateway, with the sole exception of reliable everywhere access. Most people don't use mobile internet right now because it's too expensive, too limited, and too slow. I think Google's play, if they do get into the auction, would be to make the network profitable on its own, then partner with other companies to make devices, allowing them to create a new kind of universal service. With just a wireless broadband connection, they'd already be delivering voice, internet, TV, reference, and all the other things that most people need.

'Course, that's just my opinion, and I could be wrong.

[alese]

All this talk about 700MHz wireless is nice and all. But at the end this is another band/frequency that devices will have to support in order to be of any use. And considering how many manufacturers don't support USA GSM bands why would they support this one?
Especially considering its's only USA, and that there is no infrastructure/coverage for it at the moment.

[Mike Temporale]

It does, though, in that they don't actually want to own the spectrum

Sure... I don't believe that for a minute. They want it, they just don't want to scream it from the roof tops and let the world know what they're up to.

[Rocco Augusto]

as much as Google scares me, I am excited about where this is going. If Google does win this spectrum, there is nothing from stopping them from changing the face of cellular phone usage in the United States. We could go from the current cellular carriers robbing us blind every month to a more fair playing field that could benefit all wireless users... at least, this is how it was explained to me.

My personal belief is Google is playing on the old saying of "he who has the most toys, wins" ;)

[JohnnyFlash]

as much as Google scares me, I am excited about where this is going. If Google does win this spectrum, there is nothing from stopping them from changing the face of cellular phone usage in the United States. We could go from the current cellular carriers robbing us blind every month to a more fair playing field that could benefit all wireless users... at least, this is how it was explained to me.

My personal belief is Google is playing on the old saying of "he who has the most toys, wins" ;)

[Kris Kumar]

Verizon has changed course, (http://www.washingtonpost.com/wp-dyn/content/article/2007/07/25/AR2007072502554.html) is agreeing in part to the open access to any wireless device.

I think Google is just using its might to get its way. If they were really thinking of the consumer, they could have gone in, surprised everyone, won the bid and then show how they mean good to the consumers by opening up the access. They know that open access means less money for the folks who end up winning the bid. Therefore they definitely want the auction price lowered. Even if they win the bid or not, they will win if the open access plans are enforced.

[JohnnyFlash]

Verizon has changed course, (http://www.washingtonpost.com/wp-dyn/content/article/2007/07/25/AR2007072502554.html) is agreeing in part to the open access to any wireless device.

I think Google is just using its might to get its way. If they were really thinking of the consumer, they could have gone in, surprised everyone, won the bid and then show how they mean good to the consumers by opening up the access. They know that open access means less money for the folks who end up winning the bid. Therefore they definitely want the auction price lowered. Even if they win the bid or not, they will win if the open access plans are enforced.

[Kris Kumar]

FCC has approved the final set of rules for the auction. While they didn't approve all the four Google requests, they did approve the need for the bid winners to open the access to any device and any software. They did not approve the re-selling of the bandwidth.

NYTimes.com Article (http://www.nytimes.com/2007/08/01/technology/01spectrum.html?ex=1343620800&en=ea758b6af845767a&ei=5090&partner=rssuserland&emc=rss)