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Google Set to Bid $4.6 Billion for Airwaves
Posted by
Zonk
on Fri Jul 20, 2007 06:12 PM
from the power-play dept.
from the power-play dept.
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.
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AT&T Slams Google Over Open-Access Wireless 214 comments
Robert writes with a CBROnline article on AT&T's objection to opening up a nationwide wireless spectrum. Their statement is made on the grounds that it will aid Google in their bid to get bargain-basement broadband prices. Google is just one company asking for open-access requirements on wireless signals; Skype, DirecTV, and EchoStar are others. From the article: "Yesterday, AT&T weighed in. In a letter to the FCC, AT&T said Google's "eleventh hour request" was self-serving because it would encumber licenses in the forthcoming auction 'with a laundry list of intrusive 'open access' requirements that would, perhaps, entice Google to participate in the auction. By its own admission, Google's request is intended to diminish the value of those licenses, thus preventing wireless service providers such as AT&T from bidding on them and clearing the path for Google to obtain them at below-market rates.' AT&T also said an open-access network would deprive taxpayers of billions of dollars, and inhibit the growth of wireless broadband in the country."
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FCC Goes Halfway On Opening 700 MHz Spectrum 192 comments
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.
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AT&T now supports open access for 700Mhz band (Score:5, Informative)
Open access rules would require the auction winner to allow any compatible device to connect to their networks on the effected spectrum.
Re:AT&T now supports open access for 700Mhz ba (Score:5, Interesting)
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.
Re:AT&T now supports open access for 700Mhz ba (Score:5, Informative)
Regards,
Steve
Re: (Score:3, Funny)
Re:AT&T now supports open access for 700Mhz ba (Score:4, Interesting)
Surely the obvious solution is for the government to retain ownership?
Then companies who want access can lease from the government rather than a competitor.
Why would you insist on handing over a monopoly to a private corporation in the first place?
Re:AT&T now supports open access for 700Mhz ba (Score:5, Funny)
Well, not quite (Score:5, Insightful)
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.
Re:Why open access? (Score:5, Insightful)
Re:Why open access? (Score:4, Insightful)
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.
Re: (Score:3, Interesting)
Re:Why open access? (Score:4, Insightful)
Re:Why open access? (Score:4, Interesting)
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Re:Why open access? (Score:5, Informative)
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.
Explain this "innovation" to me... (Score:2, Interesting)
Why would a closed spectrum discourage innovation? I would think not forcing people to "lease" portions of the spectrum to higher powers would curb the high cost that hinders most of the world
Re:Explain this "innovation" to me... (Score:5, Informative)
Re:Explain this "innovation" to me... (Score:5, Insightful)
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
Re: (Score:3, Interesting)
I though the US had Local Loop Unbundling? Or is the FCC not in the habit of enforcing a competiti
Re: (Score:3, Informative)
Well, the fact that AT&T has basically reassembled itself after being broken up a few decades ago should be proof enough that no, they're not
Isn't it great (Score:5, Funny)
you think if I offered the FCC $50 they'd sell me the blue?
Re: (Score:3, Funny)
It's based on the utterly false... (Score:4, Interesting)
1) Maximizing US Federal Government revenue is equivalent to maximizing public good.
2) That airwaves, which by natural law are a shared public resource, can somehow be auctioned/sold.
It is the modern equivalent of the English Enclosure movement. [everything2.com]
Re: (Score:2)
They would at first, but would quickly recant and reverse course after protest from the Hooloovoo [wikipedia.org] Ambassador...
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ATT's Worst Fear. (Score:5, Insightful)
A well funded competitor.
Reminds me of Alien vs. Predator. (Score:2)
I'm not convinced (Score:2)
Re:I'm not convinced (Score:4, Informative)
here we go again (Score:3, Funny)
Anyone entrenched in cable or land-line phone.... (Score:2, Insightful)
Re:Anyone entrenched in cable or land-line phone.. (Score:4, Informative)
Re:Anyone entrenched in cable or land-line phone.. (Score:5, Insightful)
Yet. Google will eventually be subverted and have to play by the old-boy rules.
Re:Anyone entrenched in cable or land-line phone.. (Score:2)
Re:Anyone entrenched in cable or land-line phone.. (Score:2)
And the phone c
The cash offer is just a PR stunt. (Score:2)
That said, It would be much better for google t
Re: (Score:2)
Re: (Score:2)
Re:The cash offer is just a PR stunt. (Score:4, Informative)
4.5bi for airwaves, but how much already spent on (Score:2)
do no evil? (Score:2)
How is seeking government regulation to strengthen a particular company's ability to do business not evil?
Re:do no evil? (Score:5, Insightful)
I welcome our google overlords (Score:4, Interesting)
Re: (Score:2, Funny)
Poetry. Sheer poetry.
I can't wate to use that phrase on my wife.
Better Google than anyone else (Score:2)
LEO Satellite (Score:2)
LEO
"Ma Bell" (Score:4, Funny)
Just nitpicking.
Re: (Score:2, Insightful)
Bring it on!!
Re:Et Tu, Google, mon dieu (Score:5, Insightful)
Re:Et Tu, Google, mon dieu (Score:5, Funny)
Liar! No AC has ever said such a stupid thing.
Re: (Score:3, Insightful)
Calculate the amount you'll pay them per month, the amount that they get in profit and then the cost of build out. Then figure out how long it takes to realize those "eventual" profits. It just doesn't make business sense sometimes. Now, if we want to say,