Google has asked the Federal Communications Commission to put aside one-third of the spectrum that will be offered in January as open-access airwaves. This so-called wholesale provision would enable any device to operate in the spectrum. The regulator is expected, later this summer, to decide how to allocate great chunks of the 700 MHz spectrum, which TV broadcasters are vacating as they convert to digital signals.
Google and other open-access proponents, including Skype and two of the largest satellite providers in the country, say open-access airwaves are needed to make the US broadband service market competitive and kick-start innovation. Currently, consumers can only buy broadband via telephone or cable lines. Open wireless spectrum would give them a third source, Google said.
The wholesale provision is sometimes referred to as the iPhone provision. AT&T’s exclusive contract with Apple, whereby the latter’s iPhone operates only on AT&T networks, is an example of how closed networks close out competition.
Specifically, Google has asked the FCC to mandate four types of open platforms as part of the auction. They are: open applications, whereby consumers can download and use any software, content, or services; open devices; open services, whereby resellers can acquire wireless services on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and open networks, whereby ISPs, Internet service providers, can interconnect at any technically feasible point on the network.
FCC chair Kevin Martin has reportedly written a proposal, which has not yet been made public, to make most of the new spectrum open access.
Google head of special initiatives Chris Sacca said the reports Google has heard are that Martin’s proposal includes some, but not all four, of the conditions Google is asking for. While any embrace of open platforms is welcome, only if the FCC adopts all four principles will we see the genuinely competitive marketplace that Americans deserve, Sacca wrote on his blog.
But the country’s top two wireless carriers, AT&T and Verizon Wireless, oppose the wholesale provision, claiming it would harm wireless innovation. Verizon has accused Google of an ulterior motive of acquiring open airwaves at bargain-basement promises.
This is an attempt to pressure the US government to turn the auction process on its head by ensuring only a few, if any, bidders will compete with Google, said Jim Cicconi, AT&T VP of legislative affairs. And in a display of dissembling rarely seen, even in Washington, Google claims that this attempt to foreclose any competition in the bidding process must be done in the name of, stunningly, competition.
The carriers also point to a lack of evidence that existing closed networks have failed consumers. AT&T has also argued that open-access would stifle wireless broadband growth.
In an earlier letter to the FCC, on July 9, Google attorney Richard Whitt said if the company successfully bidded on the spectrum or not, it was also considering various post-auction business arrangements, such as joint partnerships and anchor tenancy.
Our View
Google’s actions may be little more than a wireless landgrab, enabling it to potentially sell wholesale spectrum to various so-called 4G wireless service providers in order to grow its wireless search platform.
But as we’ve said before, it is far from certain that Google, even if successful in acquiring large chunks of the 700MHz spectrum, would be able to morph into a nationwide broadband provider. Rumor has it that Martin’s proposal would divvy up any portion of an open access network into six geographic regions, which means Google would have to successfully bid on all six.
