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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.
Google plans on winning, and also wants the winners to be mandated to lease off part of what they win?
Let me know if I read that wrong, but it sounds like Google is morally good.
Actually, as I submitted earlier today, AT&T has reversed it's previous stance, and broken ranks with the other major cellular providers, by endorsing FCC chairman Kevin Martin's plan to require open access to 22Mhz of the 60Mhz to be auctioned by the FCC in the 700Mhz band. This statement prompted Verizon to reiterate their opposition to any open access requirements, and Google to state their wish that the entire 60Mhz be auctioned with open access requirements.
Open access rules would require the auction winner to allow any compatible device to connect to their networks on the effected spectrum.
"The worst tyrannies were the ones where a governance required its own logic on every embedded node." - Vernor Vinge
The telcos are not going to let people use the ether for their own experimental ideas.
Like they say, it destroys innovation!
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!
I told you Google was trouble from the very start. This is complete confirmation of that.
Liar! No AC has ever said such a stupid thing.
Though this may sound sarcastic, I'm asking an honest question.
Why would a closed spectrum discourage innovation? I would think not forcing people to "lease" portions of the spectrum to higher powers would curb the high cost that hinders most of the world's greatest minds.
"Open access rules would require the auction winner to allow any compatible device to connect to their networks on the effected spectrum."
I think you meant to say that the auction winners would have to lease, at a wholesale price determined by someone, a third of the bandwidth to other service providers that customers would then pay to access the network.
For this to be anything more than just grandstanding for good karma by Google I'd like to see how the wholesale price is set and why it's a lease instead of a purchase. Google pays a one-time fee for the airwaves and then leases them off a third of them which generates a nice revenue stream for them. The people doing the leasing still have a competitive disadvantage since they always have a bandwidth charge to add to their business model, while the purchasers will recoup their original investment over time and not have that leasing charge on their P&Ls.
Your mind looks a little cramped. Why don't you stretch it a little?
I love you how can buy segments of the light spectrum like that.
you think if I offered the FCC $50 they'd sell me the blue?
MABASPLOOM!
the very act of SELLING *our* spectrum is the problem, genius.
the spectrum is like the air, it's as much mine as it is yours, and if the government wants to give control of something like that to any corporation is a problem with a LOT of us cowards who would like to remain (as) anonymous (as one can.)
A well funded competitor.
Friends don't help friends install M$ junk.
In a statement Thursday, Jim Cicconi, AT&&T's senior executive vice president for external and legislative affairs, said Mr. Martin's proposal was an "interesting and creative balance" that would not change the business models of AT&T and others. He said consumers would now have to "put up or shut up."
We at slashdot are scientists, specialists and kernel hackers. Your FUD will be found out.
Well, there goes their Q3 earnings, too.
There are no karma whores, only moderation johns
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.
So they're basically buying a new market,and hoping to get enough other folks into to it to attract customers? Expensive and risky... but very cool.
You are right and I agree with you. However, this is unfortunately the way things are right now. The fact that Google is willing to use their earnings to try and open this for more than a few is definitely a good thing. As much as it actually sucks.
They want the requirement even if they don't win it, so they're saying we'll bid (and hence the final price might be higher) if you put this clause in the agreement. Google are not going to win the bidding anyway if $4.6 billion is their max bid...
...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?
Because companies like AT&T and Haliburton either are presently, or have been in the past run by people who were high up in the government tree at one point (or vice-versa). Dick Cheney left Haliburton in 2000 to become Goerge'e Bushes mate. It's not about companies, it's who runs them and who's connected.. they're all buddies and pals and I bet Google isn't friends with any of them and they're scared.
The magical number is: 09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
Whoever wins... we lose.
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.
A worse chunk of airwave spectrum went for over 13 Billion dollars in a previous auction. Google offering 4.6 Billion would be like me offering 4500 dollars for a brand new car that is probably worth over 20K.
That said, It would be much better for google to win this than almost anyone else. At least I'm confident they won't waste the technological potential.
assumptions that
1) Maximizing US Federal Government revenue is equivalent to maximizing public good.
2) That airwaves, which by natural law are a shared public resource, can somehow be auctioned/sold.
It is the modern equivalent of the English Enclosure movement.
"National Security is the chief cause of national insecurity." - Celine's First Law
$4.5B can win it ... With all the potential this band has, that might just be a piss in the lake compared to what a big telcom might throw at it.
4.5bi for airwaves, so I wonder how much they already spent on dark fibers and what they bought with all that money.
I thought Google's mantra was "Do no evil."
How is seeking government regulation to strengthen a particular company's ability to do business not evil?
Well, cable is not going to sit around waiting for the ax to fall. DOCSIS 3.0 is ratified, products are going to be introduced next year (this fall in some markets), and will be very competitive with fiber to the home when it comes to speed.
And the phone companies aren't going to be waiting, either. All the RBOCS are planning FTTH, or at least FTTC (fiber to the curb), and Verizon WILL go national with their fiber network at some point (although it could be years before it gets to your house).
Sadly, we'll also see BPL sometime down the road. I say sadly because it will cause major interference in the short wave bands just when the SW broadcasters are starting to play with DRM (digital radio mondaile, not the other kind), and the FCC dropped the code requirement for HAM operators. Of course, BPL is not anywhere near as fast as the other options, but it has the benefit of being potentially available to just about every house in the US.
The wireless guys won't go without a major fight, and I'm sure they'll agree to anything the FCC wants. Just wait until after the auction to see all these new unlocked devices in the store. Does anyone really think Qualcomm will introduce a device that Verizon doesn't want on it's network?
"Well, good luck finding a judge that doesn't run a bestiality site."
As a person with a vested interest in a large Wifi/900/5ghz system that has many pleased users, I welcome Google and their stance. We'd love to lease bandwidth and open devices, as the 700mhz would allow us to penetrate in places unthinkable until now, with power that would make you shiver. I'd imagine Ubiquiti's frequency freedom would scale nice, with the addition of some wattage. I'm not happy to see AT&T taking over yet another town, charging $70 a month for GSM coverage, using technology only they will sanction. I'm all for Google setting base rules to how the radios will share the airtime, and if someone wants to use a different modulation supported in a software radio they've installed, it's kosher with them. In any case, 700mhz should afford at least 2megabit imho, even more in the future, and with the mhz available, possibly 20-30megabit. I don't want to see this in the hands of someone who just wants to sell data plans, it's much better in the hands of someone who wants to show ads, and let other people sell the service. I'm all for the open system, just like local competition in DSL is allowed, so Google is important, but dispensable, as the most desirable element is the reselling of the service. I for one know, my customers will choose us over Google, Cingular, Sprint, Nextel, or Verizon.
Google's intentions here really are good. The theory is this: Decades ago, AT&T wouldn't let anyone plug anything other than AT&T devices into their lines. It wasn't until this restriction was lifted (which required quite a few years of effort) that fax machines, modems, and many other innovations were able to take place and develop without serious barriers. The wireless spectrum is currently in the same position that landlines were before. No one can "plug" random devices into the wireless spectrum without permission from some company first. Google wants that lifted, and wants the control to be taken away from certain unnamed corporations who have proven they can't be trusted. Opening up the spectrum should enable innovations that aren't even "on the radar" yet. Yes I'm a Google engineer, no this isn't an official response or anything... just another /.er's point of view, but opening up the spectrum is a win for everyone no matter if the final solution is "perfect" or not.
Regards,
Steve
I don't think open access equals free access. You can charge for the bandwidth, but not restrict access to a limited set of services. On the client end, as long as the client complies with your protocol specifications, there are no restrictions on the applications build on them.
Have gnu, will travel.
Google wants it because their services are delivered via the last mile from Verion, Comcast, AT&T, and a few other that essentially controlling Google's destiny. It's related to network neutrality, but only slightly.
Ultimately Google knows that a handful of ISPs control the entire consumer network, and they're trying to poke holes in it to give themselves and others a shot at competing.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
Am I the only one who's worried, and a bit disturbed, that the government is auctioning a natural resource, without being required to have all taxpayers vote on it? I'm sure that many people would like to have a completely free spectrum, which anyone could use for their devices. But it's been like this too long for people to remember that it used to be different, after all. Such a pity ...
How long will it be between travel to other worlds becoming viable/cheap and governments claiming entire worlds and auctioning them off to the highest bidder?
(Disclaimer: I dislike most governments, and believe that communism would be viable, with enough effort)
Everything is subjective.
Hell, sure better not at&crap. They have been trying every kind of barely legal trick to monopolize and control entire united states's information for over 1.5 years now.
Read radical news here
exactly like DSL services on MaBell copper pairs
Live Electronic Music
"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.
It doesn't look like anyone else is every going to do it so I wish Google would. Launch a fleet of LEO satellites for global high-speed internet access. Unlike geosynchronous satellites some folks use for this now the latency would be very low for LEOs.
LEO = Low Earth Orbit, ~200mi up versus ~26,000mi up for geosynchronous ones.
Skip 700Mhz and go for true global coverage instead.
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.
Honestly, Ma Bell, Verizon and all their counterparts need to go. If they were smart they should have started dropping telephone service a few years ago and offer only broadband access and cell phone service, and just give the land line business to voip firms like Vonage and such. Now telcos want to try and control how fast certain pages load when fees aren't paid.
Wireless is OK, but I don't think you will ever see it compete with land lines for high end bandwidth capability like IPTV or P2P. What I think the Google offer means is the end of walled garden networks for VOIP and other low to mid bandwidth WiFi applications.
At the first scan of the topic I thoguht Google was going to invade the chewing gum business...
Just nitpicking.
Probably. Google's been unique in both its hiring practices, and business model which is heavily based on a perception of not being part of the old-boys club. It won't prevent them from joining such, but it should act as a painful barrier to contemplate walking through.
Everything will be taken away from you.
"He who can destroy a thing, controls a thing." --Paul Atreides, Dune
I think it would be nice if Google buys the spectrum and turns it over to the public. They provide specifications for the use of the airways which they sell licenses to hardware manufactures. And a Gnuetella-like or the "Google-IP" network is born without the need for tele-com or other carriers. All these devices connect together to route traffic between each other. Each user of the network in essence carries its signal to the other users. They could create a free Internet in the true meaning of the words.
But perhaps I'm confused, doesn't this mean Google could start their own cellular service on this frequency? If that's the case then letting anyone make devices for it only makes sense (in exactly the way cheap licensing for the Playstation did to Sony when they were trying the underdog).
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.
Check out my lame java blog at www.javachopshop.com
Correct, Ma Bell owns 50% of the ways I can realistically get broadband at my house. If Ma Bell owned these airwaves then they'd own 66% of the ways I can get broadband to my house. The same goes for the cable companies.
Check out my lame java blog at www.javachopshop.com
I know why we'd want it... but I don't undertsand it enough to know why Google would want it if they bought it.
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
Because it's another revenue source. Say I own the rights to the airwaves, but you come up with an application or device that uses those airwaves. I lease them to you, so you can run a business with you app or device. I can't do what you're doing, but you're lease payment goes to my bottomline.
FalconShould there be a Law?
So they're basically buying a new market,and hoping to get enough other folks into to it to attract customers? Expensive and risky
Because there is demand for those airwaves, it isn't really risky. And if the buyer is required to offer those airwaves to others at wholesale prices, the price for the rights to those frequencies, won't be so high.
FalconShould there be a Law?
PR Tip, Steve: try to stay away from phrases like, "final solution".
It's actually "don't be evil".
Every law, good or evil, will benefit some company. This does not in itself have any moral implication. Working for some law to be enacted is only evil if that law itself is evil.
We want the airwaves!
and believe that communism would be viable, with enough effort
Funny, if you don't like governments, well most of them, why would you like the biggest government?
I'm sure that many people would like to have a completely free spectrum
Under communism, there would be no free spectrum. The government would own it all.
which anyone could use for their devices.
Nobody would own devices, any devices that existed would be owned by government.
FalconShould there be a Law?
Years ago, there was talk of structural separation. I wonder if this might re-open those discussions? If this had happened when the linked article was written (2002), I wonder if we'd even be talking on and on about net neutrality? I'd say not.
Actually, 4.6 billion was their MINIMUM bid. and with pockets like theirs i wouldn't be surprised to see that number rise significantly.
I'm rooting for google here, i like how they're playing this one.
Belong to the public and should not be held hostage by congress.
p a=showpage&pid=37
http://en.wikipedia.org/wiki/Open_spectrum
explanation of interference.
http://www.acmqueue.org/modules.php?name=Content&
No one can "plug" random devices into the wireless spectrum without permission from some company first.
Surely the obvious solution is for the government to retain ownership?
Then companies who want access can lease from the government rather than a competitor.
Why would you insist on handing over a monopoly to a private corporation in the first place?
Because in America, anything owned by the government is evil, and anything owned by private companies is good.
== Jez ==
Do you miss Firefox? Try Pale Moon.
Notasheep: A couple of points...
(1) Open devices are not the same as open services: Your post seems confused about what Google is proposing in terms of open access:
- In Google's terminology, "open devices" means that a network operator could not block users from attaching devices that are compliant with network standards. Contrast this with current mobile operator practice of selectively supporting some technically compliant handsets while not supporting others.
- In Google's terminology, "open services" means that re-sellers would be able to purchase services from the spectrum licensee(s) on wholesale terms.
(2) Wholesale markets in network services: You seem to be sceptical that wholesale access could work at all. But it already works in some other countries, so why couldn't it work in the US?
- Mobile: In the UK, spectrum licensees voluntarily opened their networks to virtual operators (MVNOs) who now have over 6% customer market share. MVNO's have also been growing in other EU countries, in some cases following regulatory intervention. The UK communications regulator, Ofcom, has published some interesting research on the subject (see p. 76-88).
- Fixed-line & broadband: In the UK, there's a mechanism to provide re-sellers access to the infrastructure of BT (the company which owns all of the country's "last mile" network). The relevant division of BT is called Openreach and the regulatory framework is available at the Ofcom site.
Spectrum regulation inarguably is a States Right under the 10th Amendment, disinginuous and self serving federal court rulings aside.
"National Security is the chief cause of national insecurity." - Celine's First Law
than by your example. 802.11e [sic, that's QoS for 802.11 WLANs] runs over shared, unlicensed spectrum. Regulation is limited to very simple technical matters like power output.
You also seem to be confused by the difference between regulation and ownership, two fundamentally different and completely unrelated principles.
"National Security is the chief cause of national insecurity." - Celine's First Law
Not only that, but the Constitution says that states cannot place trade barriers against other states (For example, there can be no ban in Florida against California Citrus). If the power to regulate airwaves was given to states, then states would have the power to create differing broadcast standards, so radio towers in one state could cause interference in another state. The shutdown of radio towers in a neighboring state would be debilitating to the neighboring economy, and this would almost certainly be an unconstitutional trade barrier.
For those of us who lived under "MA Bell", including it's predatory practices, I fully support Google and it's bidding for spectrum. I can envision open access and Google owned birds that could provide high speed broad band services while supporting all of the newest technologies at a reasonable price.
communicating via RF is no more commerce than is growing wheat for your own consumption, fuck the Supremes, we're no longer a nation of law.
Your red herring with regard to interference among states fails miserably, too. Look at traditional cooperation in Europe and elsewhere, where countries are comparable to US States with regard to physical RF spectrum issues.
"National Security is the chief cause of national insecurity." - Celine's First Law
The government does retain ownership, unfortunately it's in such a fashion that smaller companies can't get in on it. It's just the FCC wants a certain amount of money from leasing the spectrum, and it's fear was that it wouldn't make enough money by opening it up according to what Google, E-Bay and others wanted. Yes, the FCC is being greedy which is a whole other issue... but regardless Google stepped up and said "We'll guarantee you $4.6 billion if you open it up."
Regards,
Steve
I like the quote at the end of your post. You should append 'Even God' at the end to make it even better :-D
Insinct is stronger than Upbringing - Irish Proverb
Nah, I stole it from someone else (whoops, there goes my ethics) and wouldn't feel right about changing it. Still good stuff though.
- Google plans to compete on quality of service level. Existing companies prefer to compete on lack of choice and lock-in, especially by monopolies in service regions or with a particular technology.
- No matter who provides the service, the users will likely be using Google as a search engine and get Google ads on their result pages (as well as all the pages with syndicated ads). In its current position, Google can always get a slice of the pie no matter who owns the tubes.
Both of these will also drive down the top bid price, as it will make it less lucrative to the current buyers to work under these constraints.and how much on "Google in a box" projects to make portable mini Googles? To put at the end of the dark fiber? and attach to wireless antennae.
The one thing Google needs to make this work is "universal" wireless access. They'd like to simply buy 1 channel (bonus points for 2 next to each other) across the entire USA... then they could let their PHDs lay out a neat, clean spec. Google would be willing to let a bunch of companies compete for devices on this network... as long as they support Google ads... it's a win-win for users, businesses, Google... not so much for the phone/wireless/cable companies right now. It's too bad the FCC can't think in this manner...or worse, they're going to pander to those who "follow the rules" by gross brown-nosing rather than actually open up to some new inventions... and this will hurt the USA for the next 20 years!!!
You mean like how Microsoft eventually conceeded that it had to behave like IBM told it to? Or the eventual victory of the sheet music publishers over these new fangled phonographs? Or how every last square inch of the earth is now a part of the British empire?
No. They don't have to play by anyone else's rules.
Dave
I write a blog now, you should be afraid.
Or more likely it is just good marketing, put in a high but likely losing bid with conditions that wont be accepted but make yourself look good in the public eye. Of course the other telecoms will just want to shut it off because as it would just compete with their existing networks. The reality is google could just shut up, put in the winning bid and subsequently make it available under what ever conditions they choose, but the marketeers and just doing their typical job of marketeering.
Chaos - everything, everywhere, everywhen
Nope. Anything owned by the government here in America, is by proxy, owned by companies. One has lots of over head for a little bit of fake consumer protection. Neither is truly a "free market" solution because even if the companies involved have very little lee-way, in bureaucracy money talks. Loudly.
Almost any company that is government contracted but still talks about being in a "free market" is spewing bullshit. Any politician that does the same is spewing money laden bullshit. Anyone who can't see through the lies is a gullible idiot.
Good. Cheap. Fast. Pick Two.