Google Likely to Bring Big Bucks to FCC Auction

Although Google (Nasdaq: GOOG) didn't get everything it wanted regarding rules for the Federal Communications Commission's upcoming auction of 700 MHz (megahertz) wireless spectrum, it will likely participate in the auction anyway, Google CEO Eric Schmidt said Tuesday.

Asked by a T-Mobile executive at a conference if Google would still participate, Schmidt told the technology executives in attendance that it "probably" would. Schmidt was a featured speaker at the conference held by Washington think tank Progress & Freedom Foundation.

Google could not be reached for further details.

Middle Ground

Previously used by TV stations, the 700 MHz spectrum is particularly desirable for its ability to travel long distances and go through the walls of buildings. TV broadcasters are moving to digital distribution, so the FCC will auction off those bands in January.

Google had charged that incumbent telecommunications firms such as Verizon and AT&T (NYSE: T), both of which limit the types of devices that can be used on their networks, had an unfair advantage in the auction.

As a result, it announced last month that it was prepared to bid US$4.6 billion in the 700 MHz auction if the FCC adopted rules requiring four types of open platforms as part of license conditions: Open applications, open devices, open services and open networks.

Promising Partnerships

The FCC voted at the end of July to adopt rules that represent more of a middle ground, including only two of Google's four openness requirements. It did, however, adopt a measure that would open up a large portion of the spectrum to serving devices from many providers.

Meanwhile, Google announced a new partnership with Sprint (NYSE: S) to bring search, interactive communications and social networking tools -- including the Google Apps communications suite -- to Sprint WiMax mobile Internet customers.

"I was initially skeptical of Google's willingness to spend a lot of money, since this is a business they don't know," Harold Feld, senior vice president of the Media Access Project, told TechNewsWorld. "Bigger businesses have bankrupted themselves spending billions of dollars trying to get into a business they don't know or understand."

A Strong Possibility

The announcement of Google's partnership with Sprint -- followed quickly by Sprint's exit from Spectrum, a consortium of cable providers -- suggests that Google may have a reasonable chance, Feld said. Sprint's partnership with Clearwire makes the possibility look even stronger, he added.

"All of this makes it look more likely that Google will go into this with the intention of partnering with Sprint and possibly also Clearwire to bid on the licenses as a joint venture," Feld explained. "Schmidt saying that Google is still interested in bidding makes it even more believable."

If that were to happen, "those players would complement each other," Feld added.

Net Neutrality?

Attendees at the conference also grilled Schmidt regarding his stance on net neutrality, for which Google has been an outspoken advocate. However, not everyone is convinced that net neutrality is what Google's position is really all about.

"All Google's talk about universal access and net neutrality grates on me," Ira Brodsky, president of Datacomm Research, told TechNewsWorld. "I can't help but think what this is all about is simply that Google sees an opportunity for growth in combining what they do with wireless."

The cellular carriers are the ones that built the networks and carefully manage them, Brodsky noted, and companies that want to access their subscribers have traditionally had to play by their rules. "Google wants to change those rules, either to put pressure on carriers to give it a better deal or to go around carriers altogether and create their own deal," he explained.

'Orwellian Double-Speak'

"Net neutrality is being painted as an issue where it's a matter of reorganizing the Internet to make sure it doesn't get taken over by the 'terrible people' who built it," Brodsky said. "It's Orwellian double-speak: Net neutrality seems like it's really about wanting to put more regulation on the existing market leaders."

Ultimately, Brodsky concluded, "I have to wonder if Google's spectrum interests are really about openness and helping consumers, or if it's more about hitting the existing guys over head with a mallet by claiming they're not properly open, because if they were, they would let Google do whatever it wants."