July 20th, 2007

Google dangles $4.6 billion in front of the FCC

Posted by Larry Dignan @ 7:12 am

Categories: General, Google, Government, Wired & Wireless

Tags: FCC, Google Inc., Spectrum, Wireless, Larry Dignan

Google said Friday that it would bid a minimum of $4.6 billion for the federal government’s upcoming wireless spectrum auction–if the Federal Communications Commission creates an open wireless platform.

The wireless spectrum auction, which covers the 700 megahertz band, is expected to garner interest from numerous players such as wireless carriers look to get more spectrum.

Google, which would obviously benefit through mobile advertising, said in a statement it would bid for the spectrum if the FCC attached conditions to the auction. These conditions include: that the wireless spectrum would allow consumers to download and use any software apps and content they want; allow handhelds to be used with any carrier; enable resellers to acquire wireless services at wholesale costs; and mandate that third parties such as ISPs interconnect at any point on the 700 megahertz band.

Not too surprisingly Google would benefit from all of those conditions. Google is probably aiming to buy the spectrum and then carve it up for third parties. Its apps and ads would also be prominent.

In a letter to FCC Chairman Kevin Martin Google CEO Eric Schmidt said his company would fork over at least $4.6 billion if the FCC met its conditions.

So will this work? As a consumer, I’d love to take my handset to any carrier and download anything I want. I also realize that wireless carriers have invested heavily in their networks and need a return.

But Google’s gambit sounds a bit condescending to me. And I could easily see Martin becoming miffed. The letter, made public via a Google release, could be interpreted as if Google is trying to mandate policy–in exchange for a hefty minimum bid.

It’ll be interesting to watch this one play out.