Google Wireless Plot Thickens
All’s fair in love and war—and politics and business. While greased politicians, like good minions, slam Google for meddling in the 700 MHz auction, Google’s own associations show the company is getting better at playing these high-stakes games.
Chalk one up for razor’s-edge stategery cutting right to the quick of Verizon and AT&T.
A couple of weeks ago, Portfolio.com revealed one can buy three whole legislators for just a couple hundred grand. Chump change if you’re dealing in billions, right? Though AT&T is the top contributor to the Washington stooges, they deny the telecom giant’s contributions had anything to do with their belief that Google chased away higher bids in the 700 MHz spectrum auction by lobbying for open access requirements, thus cheating the government out of more money.
The Congressmen must have felt kind of silly when it turned out the auction brought in a record amount, the "Google block" in question bringing a ton o’money from Verizon. AT&T swallowed up quite a bit of the other blocks, even if it seemed last fall they were staying out of the race by purchasing Aloha’s chunk of nationwide spectrum.
Google was quickly criticized after it didn’t win the auction, and had to field accusations that the company lobbied so hard for open access requirements because of its Android mobile platform, which has yet to materialize. Whether that’s true is cause for additional speculation to follow, but Google rightly said the people won the auction. Open access means wireless providers can’t dictate subscribers’ every move.
Open access also means competition, which neither wireless giant has ever liked.
More recently, the news breaks that Google and Sprint, among others, are investing over $3 billion in wireless broadband startup Clearwire, headed up by Craig McCaw, formerly of McCaw Cellular Communications, a company acquired by AT&T in the 1990s. It’s this type of development that lets you know Google is pretty serious about the wireless space.
Then Valleywag drops this bomb, implicating Google in a multi-company plot to drive up network costs for WiMax competitors, like the 4G networks to be operated by AT&T and Verizon. McCaw, according to the report, drove up prices in the last major spectrum auction:
When AT&T first bid on wireless spectrum back in the ’90s, after its acquisition of McCaw Cellular Communications, it found that during the auction all their key markets had been bid up by a mysterious third party [McCaw]. Though [AT&T] finally won the licenses they so coveted, they paid far more than anyone had expected.
After you pick your jaw up and you finish being wowed at the tangled web of corporate maneuvering, consider that Google, in a classic move, seems to have done us and itself a favor at the same time by ensuring open access and paving the way for some more competition, even if the competition is the company itself.
It’s better than paying off Congressman to something stupid, anyway.