Friday, July 20, 2007

Google to enter 700MHz auction?

[Update: Further comments from Google about the reasoning behind their offer.]

Talk about putting your money where your mouth is. With regard to the auction of the 700MHz band here in the U.S., it looks like Google is interested in using its monetary muscle to shift the balance of power and take a stand for open networks. You can see the news here.

It's an interesting development. Too bad it might take power plays from private companies to get the U.S. government to do the right thing. I suppose it has always been that way for any government, and, of course, the auction rules may not change despite Google's efforts.

A cynical part of me thinks Google expects no change in the rules with appropriately cynical analysis as to why they would make their offer anyway. But I think analyzing people's hidden motivations is usually fruitless and ultimately incorrect. So, I'll take the offer at face value and say that, regardless of the outcome, at least there was one company that went on record to say, "Yes. Open networks and spectrum are valuable to us, and we are willing to spend money on it." Which is quite contrary to what the incumbent telcos have been saying.

Of course, if Google did win the auction, you'd still have the problem of a network carrier who also delivers services. As other people have pointed out, even with the rules in place at first, eventually the "owner" of the spectrum gets more and more control over time through lobbying of the government.

Susan Crawford (as usual) has a concise summary of what Google wants to do with the spectrum. If Google really intends to make money off of realtime auctions of spectrum, then perhaps the problem of "owner" lobbying wouldn't be an issue since Google's income would be increased by having more services and applications using their network. They would have an incentive to be open which is the opposite of the incentive incumbent's currently have. Is it possible for a network to be optimized for both billing and innovation? It would be interesting to find out.

Finally, here's Google's letter.

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