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Mar. 21, 2008 at 8:27am Eastern by Greg Sterling
Google Gets What It Wanted From 700MHz Auction
The US 700MHz auction is now over; the winners were announced yesterday. The spectrum is becoming available as television broadcasters make the mandated switch to digital signals in early 2009. The big winners (no surprises here) were US carriers Verizon and AT&T. Verizon bid more than $9 billion and won the coveted "C block," as well as chunks of the A and B blocks. AT&T, which before the auction had spent $2.5 billion for 700MHz spectrum owned by Aloha Partners, spent $6.6 billion to buy B spectrum block.
Google bid but got none of the spectrum, yet the company still got what it wanted.
In July of last year, Google announced that it would bid a "minimum of $4.6 billion" to help ensure openness of the 700MHz spectrum and networks that used it. At the time, Google proposed four openness provisions:
--Open applications: Consumers should be able to download and utilize any software applications, content, or services they desire;
--Open devices: Consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;
--Open services: Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
--Open networks: Third parties (like internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee's wireless network.
It got two out of the four provisions it wanted. Specifically, Google succeeded in getting the FCC to embrace the following: (1) open applications, the right of consumers to download and utilize any software applications or content they desire; and (2) open devices, the right of consumers to utilize their handheld communications device with whatever wireless network they prefer.
Subsequently Verizon and AT&T, under pressure, embraced "openness" (to varying degrees) themselves, saying they would allow third-party devices on their networks. The C block will now effectively become part of Verizon's network.
Because the FCC's minimum "reserve price" of $4.6 billion for the C block spectrum was met, the nationwide network will now be open to any device, which ensures that phones built on the Google-sponsored Android platform will have a home even if no US carrier officially offers or promotes them. Here's Google's official comment on the end of the auction:
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.
Now its up to handset makers and Android developers to create devices and experiences that consumers want to use.
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By Greg Sterling
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