And that’s not bad considering the company only spent $770,000 lobbying, compared to AT&T and Verizon’s combined $35 million, if there was ever any wonder why the government seems more willing to listen to the telecoms.

(Did you know that when Superman debuted in comics in 1938, his chief foes were slick Washington lobbyists? Nice to see we’ve progressed.)

What’s even more interesting than that to me is the telecoms’ chief comeback against Net Neutrality arguments was that the cause was well-funded by Internet giants, making it sound like they couldn’t compete financially. Puh-lease!

Seen as the last line of defense against the telecommunications industry’s desire to keep mobile phone subscribers bound in contracts, using select phones, accessing approved websites, downloading approved applications (sounds familiar to the Net Neutrality worries, doesn’t?), Google pledged to bid $4.6 billion on a chunk of the spectrum, but only if all four conditions of openness were met.

This infuriated AT&T, who accused Google of trying to stack the deck in its favor, which is an activity reserved exclusively for AT&T. Google’s proposal, too, could severely affect their business model.

(For a nice explanation of AT&T’s business model, check out Thomas Claburn’s "If AT&T Ran the Highway System." My favorite line: Sales people in AT&T car showrooms would have no idea how the iCar operated.)

But Chairman Martin acquiesced to only two of Google’s stipulations, drafting rules more similar to Cisco’s proposal, unmindful of Cisco’s definite stake in the outcome, which allow consumers to use any device on the network and install applications of their choice.

Verizon got on board with this proposal, as it doesn’t enforce any type of wholesaling requirements, nor does it ensure that providers cannot set controls on what customers can access via wireless devices.

But according to the Washington Post, there may still be hope yet that Google will enter the auction anyway, as the outcome will have a direct impact on its business model (even if the same article flubs a couple of things like the Net Neutrality definition and at what point Google made its offer):

"Google sees network owners as potentially coming between it and its customers, so they realized how critical Washington was to their long-term game plan," said Paul Gallant, a telecom policy analyst with Stanford Group Co.

So maybe, just maybe, there’s still hope that Google, or some Google coalition, will bid in the spectrum auction in early 2008 and create the "third pipe" for some real competition in the wireless sector.

With this promised bid, Google has taken away arguments from incumbent telecommunications opposition that openness requirements would devalue the spectrum and limit competition.

The pledge carries with it stipulations, though. In a letter to FCC chairman Kevin Martin, Google CEO Eric Schmidt said it would only bid if the FCC adopted all four proposed openness requirements as part of the license conditions.

The four requirements are:

·    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.

By ensuring a slice of spectrum remains open, proponents hope incumbents will be prevented from buying up the spectrum, formerly used by broadcast television and ideal for true wireless broadband Internet, hoarding it and doling it out in a way that is costly and unfair to consumers.

 "In short," said Schmidt, "when Americans can use the software and handsets of their choice, over open and competitive networks, they win."

Chris Sacca, Google’s Head of Special Initiatives, expands on this concept on the Google Public Policy Blog:

As numerous public interest organizations noted earlier this week, all four of these conditions adopted together would promote a spirit of openness, and could spur additional forms of competition from web-based entities, such as software applications providers, content providers, handset makers, and ISPs. The big winners? Consumers. As choices increase, prices come down and more Americans have access to the Net.

Google is sitting on a mountain of cash. Yesterday, the company reported $12.5 billion in cash holdings in their second quarter earnings report. In the past, Google has had to be careful with how its money is allocated, as the SEC has threatened to change their classification status to "investment fund."

Dropping as much as $5 billion on spectrum would help control for concerns like that, and move the company into the long awaited ISP everyone (ahem, almost) knew it would become.