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FCC Goes Halfway On Opening 700 MHz Spectrum
The FCC has set rules for the upcoming auction of 700-MHz spectrum and they went halfway on the four open access principles that Google and others had called for. The agency said yes to "open devices" and "open applications," thus requiring the auction winner to permit consumers to use any device or application on the network. But the FCC turned down "open services" and "open networks," so the winners will not be obligated to let others buy access at wholesale prices in order to offer network services. This vote would seem to mean that Google won't bid in the spectrum auction. Ars has a more in-depth look at the outcome.
In the United States, the electric industry also has open access requirements that are comparable to those at issue here. Except, instead of "spectrum" the open access condition applies to power lines.
The US essentially has two types systems for moving electricity around: the Transmission System and the Distribution System. Transmission System lines are typically high voltage and used for wholesale sales of electricity. They are predominately federally regulated. Distribution System lines are typically lower voltage and used for distribution of power to retail end-use customers.
However the open access requirements are quite different. Transmission Systems are open to any user (with lots of strings, but in theory anyway). So someone who wants to sell power at wholesale essentially has the same right of access to the transmission lines as the utility that owns the lines does. In other words, the utility's transmission functions are no longer vertically integrated (at least in theory) with their power generation functions. This concept is known as "comparability." Sadly, the FCC rejected this type of open access.
For distribution systems, the utilities are still far more vertically integrated and largely control who has access to their power lines. While they still have to provide some level of access to competing users, there's no comparability concept and no sense that the utility is in the business of "renting" its system to all users and that its affiliated branches are just another user. Instead, we are going to continue to see integrated networks where the owner of the spectrum is able to stiffle innovation. Requiring that the purchaser of the spectrum re-sell it to competing companies would have guaranteed far more interesting uses of this spectrum.
Of course, allowing for phone transferability and the other items are good; but is a public safety system really the biggest concession that the FCC could extract? Yes, it is important. But nobody was going to object to giving fire fighters the communications equipment they needed.
Sad.
They mentioned that on Twit as well. If Google got what they wanted, universal, nation-wide wireless bands, then they'd make the Cellular monopolies obsolete in a matter of a few years. That's one BIG stick to beat AT&T with after the "threats" they made about Google "paying" it's way in the future. Also, that would go nicely with the "google on a truck" and dark fiber projects they already have!! Google almost has enough pieces for a true 3rd independant national internet! That alone would be worth the FCC taking a look, but they're too shallow to see beyond quarterly profits.
It's never just about having money to buy stuff. You also need to make extra investments and assets to buy this kind of infrastructure. And they cost a lot of money.
Spending half of Google's money on airwaves would also mean opening thousands of new jobs, creating new departments and searching for customers. And the investors are not happy with the current situation of Google. "I will not innovate if I can just use the investor's money to buy commoditized stuff and partially-inovating trendy companies like YouTube" will really hurt Google in the long run. Yeah, ok, the new market of internet advertising might grow to dozens of billions of dollars a year. That's why Google is worth so much, because of a new market. Investing on telecom commodities is not why they have so much money, to create this kind of old-business infrastructure.
What's next, Google buying oil refineries just because "they can"? I'd be pretty pissed off if the company holding my money (shares) started abusing it.