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Google Set to Bid $4.6 Billion for Airwaves
Nrbelex writes "The Associated Press is reporting that Google has offered to bid at least $4.6 billion on wireless airwaves being auctioned off by the federal government, as long as certain conditions are met. 'The Internet search company wants the Federal Communications Commission to mandate that any winners lease a certain portion of the airwaves to other companies seeking to offer high-speed Internet and other services. Such a provision, Google argues, will give consumers — who traditionally get high-speed Internet access via cable or telephone lines — a third option for service.'" We discussed AT&T's objection to Google's acquisition of these airwaves last week; this article would seem to confirm Ma Bell's worst fears.
Bring it on!!
Yes, anonymous coward, you've taken many bold stances over the years. However, this act is still not inherently evil or good; it's just google buying up some of the spectrum. And that's after they've petitioned for rules requiring certain parts to be open. Those bastards!
the very act of SELLING *our* spectrum is the problem, genius.
the spectrum is like the air, it's as much mine as it is yours, and if the government wants to give control of something like that to any corporation is a problem with a LOT of us cowards who would like to remain (as) anonymous (as one can.)
A well funded competitor.
Friends don't help friends install M$ junk.
Companies would start offering mobile services like the offer web services now... And google would provide the ads for those services. Unlike now where the mobile offerings are largely captive networks.
Why would you plunk down a few billion to buy rights to something you have to let everyone use? I'm sure I'm missing something fundamental
It's making more money by being less evil. If a single company held the spectrum and the equipment to access it, then either they have to be amazingly good at making products that everyone wants, or they cannot maximize their market share. Imagine if the only cellphone in existence was the iPhone. Would you pay $500 for it, or stick to a land line? Now imagine if Cingular only sold iPhones. Those other networks with more choice and cheaper phones suddenly look a lot more attractive, don't they?
Google's position is just the realization of the fact that if they're going to compete against the existing phone companies, they'll make more money by letting anyone and everyone on board, rather than limiting it to a dozen or so devices.
...should be peeing their pants right now. Whoever wins, this will dramatically alter the landscape of broadband access. FWIW, given the horrible customer service records of all the other players, I hope Google comes out ahead. One note though, why is it so common for government agencies to give massive-scale abilities and income to other large companies through policies such as this, but when it comes to a tech company like Google venturing into that scale everyone gets nervous? Shouldn't people be much, much more nervous about large-scale deal such as those done with ClearChannel, Halliburton, or even that company that runs most of the prisons in the US?
The basic requests that Google, ebay, etc made were:
1. Users can use any device to access the network
2. Users can run any software they'd like to run
3. The network interconnects with the internet
4. The network operators lease bandwidth to 3rd party companies
The draft proposal that the FCC chief published (and that AT&T just agreed with) protects the first 2 of those rules, but not the last 2.
The impetus for Google to front this money was the Telecoms lobbying the FCC with the argument that requiring openness will reduce the value of the spectrum and thus reduce the Governments take. By fronting this money, Google negates that argument. They'll only bid if these rules are established, and the Gov't will almost certainly make more money with Google bidding than with them sitting out.
Suddenly the FCC is left with very little reason to oppose openness. This, in my opinion, removes the political cover that he'd need. It's a game changer and a genius play by Google.
and I bet Google isn't friends with any of them
Yet. Google will eventually be subverted and have to play by the old-boy rules.
The higher the technology, the sharper that two-edged sword.
It relates to access.
The reason that we don't have a lot of competition in the Cable TV realm is because the Cable companies own all the cables that they install. They are not required to let another cable network use those wires. DirectTV competes by totally bypassing the cable wires.
Wireless companies and the major internet providers have much the same stranglehold over broadband & cell phones. Because they install the Last Mile hardware (wired and wireless), they own it, and there is no legal requirements that they allow competitors to truly use it. So their competitors are forced to gather a lot of funds and create a secondary network. That's a high barrier to entry, and means that anyone who wants to get involved is in for one helluva challenge.
The above is what happens in a closed system. Because there are such a limited number of closed systems available, when they are all owned, the resources are literally unavailable to any future entrepreneurs that wish to compete.
The idea behind a fully open spectrum that interfaces with the internet is that we can make available (essentially For Cost) a competitive set of access capabilities. So instead of people being forced to use the closed-access spectrums, entrepreneurs are legally allowed to compete without being blocked in any way! This will allow of number of potentially awesome things to take place for both consumers and competitive businesses.
As a consumer, I want this because I dream that one day soon I can buy a linux smartphone that surfs the web, plays music, and connects to any of the major competitive cell-phone companies without requiring a subscription term or early cancellation fee of any kind. Entrepreneurs want this because the Wireless companies have huge profit-margins and high costs, and are ripe to be undercut and turned in a commodity market. Entrepreneurs (and consumers) also want this because they are sick and tired of dealing directly with the wireless companies in order sell their content. Google wants this because then they can work out deals with growing wireless telco's to sell targeted advertising.
I haven't even begun to get into the ramifications for Broadband service! Let's just say that everything good I said about Wireless, multiply that 3x and you're just scratching the surface for what this will help create in the ISP sector.
This is an opportunity to force the giant telco's, ISP's, and wireless providers to start playing fair for everyone. If they aren't up to the task, than they can close up shop while their new competitors provide better service and better prices to us, the consumers.
- DaftShadow
It isn't. But seeking government regulation to allow all companies big and small to do business on an equal playing field is not evil. Actually, it's what the government is SUPPOSED to do in a market economy.
"2) That airwaves, which by natural law are a shared public resource, can somehow be auctioned/sold."
So are property rights. I don't see you complaining about those.
BTW I'd be careful about using the natural law defense.
Actually, it seems to me that if Google gets their way, the telcos would be less interested in bidding, which might actually make the winning bid lower.
Calculate the amount you'll pay them per month, the amount that they get in profit and then the cost of build out. Then figure out how long it takes to realize those "eventual" profits. It just doesn't make business sense sometimes. Now, if we want to say, that rather than being purely profit driven, it should be seen as some kind of right or necessity for the overall good, then that sounds like the time for government to subsidize it into making business sense.
Quick example: We all used to drive down roads just fine, but now that most places have cell phones, "dead zones" are considered a safety hazard when people can't call for help (Economist, July 12th 2007). Now if it really is a matter of public safety, why not subsidize the special cases where it is in the public interest to have another tower installed?
Now another option would be to make it a requirement on the licensing of the spectrum (i.e part of the business cost, so companies can factor it into the profitability equation when they make the decision), but I don't see why, for instace in your DSL example, I should pay more for the 974 feet to my urban Point-of-Presence to support the installation of an extra long run and repeaters for your DSL. It would seem to me that that really is just part of your cost-of-living, just like paying higher San Francisco rents is part of mine.
I think you're more likely to see cheap wireless broadband than cellular service. That's not to discount the possibility/probability of VOIP over that broadband service. I simply doubt that the Goog would limit their bandwidth to voice.
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