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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.
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
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.
"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 $50 they'd sell me the blue?
MABASPLOOM!
A well funded competitor.
Friends don't help friends install M$ 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.
Google's trying to make it so that whoever gets the spectrum has a certain price they can't charge above for leasing the spectrum. As it stands now, whoever gets the spectrum can charge whatever they want, or just block someone completely. Right now, the entry barrier is so high that it's almost impossible for smaller companies to get any slice of the spectrum. If Google gets its way, the entry barrier will be much lower, but still there.
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
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
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.
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
Because in America, anything owned by the government is evil, and anything owned by private companies is good.
== Jez ==
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