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FCC opens curtain on Google puppetmaster
Verizon plays the puppet
Comment Late last week, the US Federal Communications Commission revealed that the battle for the much-discussed 700-MHz wireless spectrum played out just as The Register suspected. Verizon won the coveted C Block, but it was Google that pushed bidding past the FCC's reserve price, officially hooking an "open access requirement" to this prime portion of wireless real estate.
But one question remains: Did Google have any interest in actually winning those airwaves for itself - or was that open-access-pushing bid merely the final move in an epically-Machiavellian scheme to force Verizon into a wireless personality transplant?
Considering that Google bid more than $4.7bn to push the C Block auction past the reserve price, the truth is somewhere in-between. "They probably had an interest in winning at that price," one auction insider told us. "With these auctions, people are pretty serious about their bids. If you're going to put down $4.7bn, presumably you can convince your stake holders that it makes sense."
But you'd have to say that Google couldn't be happier with the way the 700-MHz auction played out. At the very least, the company had no interest in running its own wireless network. If it had won the C Block, you can bet that Google would've licensed the spectrum to someone else and let them run things - as the company seemed to indicate when lobbied the FCC to open-up the 700-MHz band.
You see, Google isn't wireless carrier material. Running a nationwide wireless network is a low-margin endeavor with little reward outside the endless penny shaving. Google merely wanted to ensure that the C Block was open to any device and any application - whoever won the airwaves. With an open access requirement in place, it can shove all sorts of Google apps onto American cell phones - and use those apps to serve up all sorts of online advertising. Eric Schmidt and company have a knack for making money with online advertising.
Remember, Google is also calling for open internet on an unlicensed portion of the US wireless spectrum. A day after the FCC revealed the 700-MHz winners and losers, Google fired a new letter (PDF) at the commission, detailing its plan for transmitting data over the country's television "white spaces" - portions of the TV spectrum that aren't used for broadcasting.
Under this plan, there is no wireless carrier. With the right devices, anyone could use those white spaces in much the same way they use Wi-Fi. Google doesn't care how you connect to the mobile web - as long as it can toss you those ads.
With a post to The Official Google Rhetoric blog, the company seemed to indicate it was nothing but pleased with the outcome of the 700-MHz auction. "Although Google didn't pick up any spectrum licenses, the auction produced a major victory for American consumers," wrote Richard Whitt, Google's Washington telecom and media counsel, and corporate counsel Joseph Faber.
"We congratulate the winners and look forward to a more open wireless world. As a result of the auction, consumers whose devices use the C-block of spectrum soon will be able to use any wireless device they wish, and download to their devices any applications and content they wish. Consumers soon should begin enjoying new, Internet-like freedom to get the most out of their mobile phones and other wireless devices."
Then these legal minds promised that the company would have more to say on the matter "in the near future." And a company spokesman told us this would come on April 3, after the FCC releases auction participants from its anti-collusion rules.
Will Google admit that it was never interested in winning its very own airwaves? That it played Verizon the way it plays the online ad market? We doubt it. But you can bet Eric Schmidt and company will continue to toy with the big-name American telco. Now that the open access requirement is in place, the trick is getting Verizon to follow it. ®