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July 23, 2007
Consultant Comments on Google Bid for U.S. Spectrum Auction
By Spencer D. Chin TMCnet Web Editor
Google’s (News - Alert) $4.6 billion bid to garner part of the 700 MHz spectrum the Federal Communications Commission is considering auctioning off has caught lots of attention – not all of it positive—from telecom providers as well as industry observers. One industry consulting firm, Ovum, is one of the latest to comment on Google’s bid.
In a release statement, Jan Dawson, vice president of Ovum’s U.S. Enterprise Practice, said “While Google clearly hopes this deal will deal with an objection some have raised—that the Commission might not receive as much from the sale of spectum if stringent rules are applied to it—some have understandably suggested this may be seen as a bribe on the part of Google to adopt its rules.”
Dawson added, ‘Of course, there’s another side to this debate too. The wireless carriers who current make a business out of heavily subsidizing exclusive handsets in return for two-year commitments to their service plans have every interest in perpetuating that model, and have so far resisted calls for wireless net neutrality. Verizon (News - Alert) has been strongly opposed to any form of neutrality provisions in the rules, while AT&T’s position has been a little more nuanced, supporting some of Google’s proposals while ultimately suggesting that it should bid for and win the spectrum itself if it wants to see neutral approach to the spectrum.”
Google might find allies elsewhere in the wireless industry—smaller mobile service providers being squeezed out by the largest providers, according to a Bloomberg.com report.
Google head of special project Chris Sacca was quoted as saying in the report that Google would use the spectrum not to create its own network but enlist the help of existing carriers.
“We see a lot of companies in this space who we would love to collaborate with,” Sacca was quoted as saying in an interview. He reportedly did not name which companies Google would consider hooking up with.
“At this point, the most important thing is for the FCC to determine what the rules will be quickly, giving all parties enough time to build business models for the use of the spectrum by the time of the auction – and all parties appear to agree on this. However, on virtually everything else there is still a gulf between Google and its supporters and the wireless carriers, with the FCC stuck in the middle. On the other hand, it also favors intermodal competition and would love to have a third pipe to the home emerge in the form of wireless, in addition to the current duopoly between cable companies and telcos.”
Dawson added, “At all costs, the FCC must see beyond the dollar bills Google is waving around in support of its proposals and determine which outcome is most likely to produce both the best price for the spectrum overall and provide a platform for the next wave of wireless services in the U.S.”
Spencer Chin is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.
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