Microsoft may be cast regularly as Google’s big adversary, but that’s a cupcake-tossing toddler spat compared to Google’s running duel with Verizon during the bidding for the national block of 700MHz spectrum coming available in February 2009.

The war of words should escalate now that Verizon has a bill for a few billion dollars, and Google and the Wireless Innovation Alliance want to cruise Verizon’s new wireless highway. However, obstacles to placing devices operating within the gaps in 700MHz exist.

Google’s Richard Whitt talked about this and Page’s recent trip to the Nation’s Capitol to discuss the access people have, and don’t have, to decent Internet service. On the Google Public Policy blog, Whitt recounted Page’s suggestions about the future of wireless access.

Whitt noted Page’s remark about a favorite claim of opponents to wireless Internet in the spectrum: that it will interfere with wireless microphones.

“While we believe that spectrum sensing technology can be proven to work, Larry noted that Google has also proposed an enhanced spectrum protection plan — involving geolocation and beacon technology — to guarantee that devices using this spectrum wouldn’t interfere with current users,” Whitt noted.

The FCC holds similar views, with Page citing a belief that the Agency will not approve any type of white spaces access device until it can be guaranteed a device won’t interfere with anything else.

“(Page) said he is ’100 percent confident’ that the white spaces will be used for Internet access — it’s just a question of when,” said Whitt.

“And when that happens, many different companies will likely invest millions of dollars to develop innovative devices that don’t interfere. But the FCC allowing this innovation to happen is a necessary first step.”

The promise of white space Internet access holds great potential for underserved rural locations in particular. While areas of the country exist where wired high-speed options don’t exist, there will be a need for a better option, and what could be better than a spectrum they receive today in the form of TV signals?

Verizon raised concerns in July 2007 over the open access rule for the auction. The rule left the door open for Google to slip its white spaces device onto the spectrum Verizon ultimately won.

“Imposing any such requirements in the competitive wireless market would reduce the revenue the government will receive from the spectrum auction and limit the introduction of new and innovative wireless services,” said Verizon on that blog post.

That “reduced revenue” ended up being nearly $20 billion overall for the FCC in the collection of auctions that included the 700MHz C block, which Verizon picked up for $4.75 billion. Doesn’t seem like the FCC lost too much money, does it?

Google added a little more spin to their position that losing the national C block license to Verizon actually ended up being a good thing for everybody.

Richard Whitt and Joseph Faber, counsels on Google staff, discussed the attention-getting auction on the official Google blog. They touted achieving Google’s top priority, which was to get the bidding for the C block license up over $4.6 billion to activate the open devices and open applications requirements for the winner

“In ten of the bidding rounds we actually raised our own bid – even though no one was bidding against us – to ensure aggressive bidding on the C Block,” the blog post said. “That helped increase the revenues raised for the U.S. Treasury, while making sure that the openness conditions would be applied to the ultimate licensee.”

Google’s strategy looks like it represented an approach to secure a couple of goals. First was to get the open devices and applications requirement attached to the auction winner; Google never believed it could win this auction, based on Whitt’s comments in July 2007.

The second part comes down to their efforts to gain access to the white spaces within bands of the spectrum won by Verizon. T-Mobile and Sprint complained about potential interference with white space wireless access to the FCC in January.

The basic idea about white space access allows Google and its partners in the Wireless Innovation Alliance to set up shop within the 700MHz spectrum. We think there could be a flaw in Google’s plan, one that could stop the white space effort in its tracks.

When Google first said it wanted four open requirements on the auction to guarantee their participation and ensure the FCC would receive no less than $4.6 billion from the rights to 700MHz, the FCC only accepted the two open requirements we mentioned, devices and applications.

It’s long been our position that these were the least important of the two. People can bring wireless phones to carriers that aren’t part of the line of officially offered phones, and get service. As far as applications, other than Skype or any other VoIP client there doesn’t seem to be any difficulty downloading something like Opera Mini onto a phone, even with an existing web browser on the device.

The FCC rejected Google’s other two requests, for open networks and open services. We envision a legal challenge to the white spaces supporters if they ever manage to keep their wireless broadband signals from interfering with TVs and wireless microphones.

It isn’t hard to imagine Verizon telling a judge that using the white spaces infringes on their rights to the spectrum. Open networks and services were not a requirement of the auction winner, and wireless broadband in white space falls more logically into those categories than into open devices or applications.

We like the vision Google has for wireless access, but it seems they need to hope for a change of political parties in the White House, a subsequent replacement for Kevin Martin as FCC chairman with someone more forward-thinking on wireless issues, and possibly a legal decision in their favor over white space access.

Meet the new boss, same as the old boss, as it applies to the potential for real game-changing wireless voice and data service.

Verizon and Vodafone’s joint venture Verizon Wireless handed over $4.74 billion for the rights to the spectrum. As analog television signals go dark in 2009, freeing up this spectrum, Verizon will be able to use it for additional services.

A Reuters report said that while Verizon ended up with the prized C block, AT&T snapped up 227 regional B licenses. The two biggest wireless providers in America got a little bit resource-richer.

You’ll pardon us for holding our applause. While the two companies could make this valuable spectrum into some truly amazing services, especially as it pertains to broadband Internet, we’re thinking the 700MHz spectrum could get the same treatment the Ark of the Covenant did at the end of Raiders: boxed up and filed away in a massive warehouse.

Only the prospect of Google or a similarly-minded company winning the spectrum excited us. Imagine if Google’s nascent Android mobile platform would have arrived at one of the big Asian manufacturing firms with specs for a 700MHz antenna in place.

Such a move would have needed to be complemented with the deployment of the infrastructure needed to support wireless signals. The winner could move on that at a measured pace, rolling the service out to densely populated areas where the 700MHz signal slides through concrete, recouping the investment by delivering ad-supported wireless Internet at a nominal monthly cost.

Cheap VoIP and Internet service, even in places where the term “dead zone” doesn’t mean a Cronenberg flick, that was the real promise of someone outside the two largest wireless monoliths getting the spectrum. Verizon and AT&T, with their lockstep pricing for voice and data plans, give us no optimism that 700MHz will be more than a Wikipedia entry in a couple of years.

The open applications and open devices requirements for the C block winner mean less than the electrons needed to render those words. Wireless customers already had these freedoms, they were just buried in the fine print. My how Verizon and AT&T must have laughed when FCC head Kevin Martin agreed to *impose* those requirements.

An argument could be made that now is too soon to say what the top two wireless companies will do with the licenses they have acquired. That Verizon and AT&T will use the spectrum to deliver voice and data at dramatically competitive prices, content to sit back and act as a utility, a dumb pipe providing a service.

If you believe in fantasy that much, we’d like to note that the fourth edition of Dungeons & Dragons will be released in June. At least that fantasy has a ship date.

The bids are anonymous, with penalties for collusion or otherwise discussing the bidding taking place for the FCC auction taking place for the 700MHz spectrum. It may not matter if Forbes is correct in its assumption that Verizon engaged in a different strategy:

But Verizon likely didn’t bid for the C block directly, analysts said. Instead, it likely bid on a host of less expensive regional slices of spectrum and made sure that the total amount was more than what was bid for the C block. It’s a savvy strategy, because under FCC rules, if the regional bids top the bids for the C block, that block must be split up and apportioned to the highest bidder or bidders. By the end of Tuesday, the regional bids added up to $4.74 billion, about $30 million more than the current total for the C block.

Forbes writer Elizabeth Woyke also mentioned the highly misunderstood concept of “open access.” Many people have misconstrued this once the C block bidding passed the $4.6 billion reserve price.

We’ve mentioned this before on WebProNews and we’ll say it again here. The two provisions of openness that became conditions for the winner of the C block auction – open devices and open applications – have nothing to do with open access.

People already enjoy the right to bring unlocked open devices to a wireless carrier like Verizon. They still have to pay to access the network. The same thing goes for applications. Sure you can grab a free copy of Opera Mini or Gmail For Mobile, but you still have to pay for data access  on the wireless network.

Now the Auction 73 process becomes a whodunnit mystery. Someone pushed the bidding for the 50 state package to over $4.7 billion today.

Google had promised to bid at least that price provided the FCC imposed four conditions of openness on the auction winner. If Google were to win, they could make the spectrum available under those conditions without the FCC’s help.

Verizon and AT&T both would be logical competitors for the spectrum. Used for analog TV broadcasts, the spectrum could be converted into a wireless access technology with particularly intriguing usefulness in densely-packed urban areas where walls disrupt typical wireless radio signals.

Some have contended a failure to meet the reserve price would lead to the FCC removing “open-access rules Google requested” from the auction and running it again.

However, the FCC never approved an open access rule in the first place. Google asked for open access to the network as a condition of bidding the $4.6 billion reserve; they also requested open services, applications, and devices.

The FCC only approved the last two conditions, rejecting requirements for open networks and services. Now the thought process behind the bidding has to consider the future. If Google wins and supports wireless across the new spectrum, with its Android software and their hardware partnerships, AT&T and Verizon could see their business prospects falling into deep, smelly stuff.

Head first.

That would make bidding an act of self-preservation. In order to avoid competing with Google, and a swath of ad-supported devices making calls and online services free, the current telcos may feel pressure to preserve the business model by gaining control of the spectrum.

If the bidding hits the next minimum listed by the FCC, we’re inclined to think it will be the telecoms pushing the price up for the spectrum.

Who blinks first in a standoff over the prized slice of spectrum? As the FCC uses an anonymous bidding process, including penalties for collusion to keep it anonymous, the progress of Auction 73 is a little less interesting than it could be.

Someone should eventually push the bidding for that block of spectrum, which will be freed with the digital television signal conversion in 2009, up and over the $4.6 billion mark. The minimum bid for the next round for this piece of the 700MHz spectrum will be over $4.7 billion.

As CNNMoney noted, open access conditions for this piece of the spectrum come into effect once the bidding passes $4.6 billion. Google proposed four openness conditions for the auction, offering to bid the minimum $4.6 billion if the FCC embraced all four.

But the FCC opted for the two less meaningful conditions – open applications and open devices – which in some ways the existing wireless telcos already permit. If Google wants all four conditions, the two mentioned along with open services and an open network, they will have to bid up the price.

The auction gets interesting here. Will Google up the bid? Last year, pundit Robert X. Cringely called Google’s interest a head feint, aimed at getting the FCC to impose conditions on a winner that Google could then enjoy for free.

If the bidding passes $4.6 billion, the wireless telcos like AT&T and Verizon may think Google has pushed the bid up to ensure it can enable those conditions. That could start more active bidding in earnest.

Right now it looks like everyone’s waiting for someone else to blink. It all comes down to how much value companies believe they will derive from winning the auction. If the 700MHz spectrum represents a shift in how people access online services, we’re pressed to see a limit on how valuable this auction may become in the future.

Here’s a crazy thought: what if the federal government decided it could be the one to benefit the most from the 700MHz spectrum? Instead of auctioning it, they turn it into a public works project, a 21st Century TVA, but with transmitters rather than electricity.

It won’t happen, since apparently the Feds have already spent the money being raised in the auction. Too bad, really, as it seems from the news the US economy could use that kind of boost to the workforce, amid outsourcing of manufacturing and tech jobs abroad.

As part of the process of lining up bidders who will pay upwards of $4.6 billion to secure a prized block of wireless spectrum, the Federal Communications Commission approved 214 firms for participation in the upcoming auction.

Google Airwaves, the entity listed as Google’s participant in the auction, faces giants like Verizon and AT&T in bidding for the spectrum. Another notable bidder, Vulcan Spectrum, is backed by billionaire Microsoft co-founder Paul Allen.

The growing importance of the mobile device for Internet access made the 700MHz spectrum a desirable acquisition. Analog TV broadcasts over that spectrum will be phased out in favor of digital transmissions, and the ability for devices to easily receive 700MHz signals inside buildings created this fervent interest.

This would give the auction winner the ability to deliver whatever services it likes to people in major urban areas, where tall buildings interfere with typical wireless signals. For Google, it means the chance to serve its ad-backed products to thousands of demographically-desirable people in New York and similar places.

]]> http://www.webpronews.com/fcc-approves-google-for-wireless-auction-2008-01/feed 1 http://www.webpronews.com/google-microsoft-co-founder-bidding-for-spectrum-2007-12 http://www.webpronews.com/google-microsoft-co-founder-bidding-for-spectrum-2007-12#comments Wed, 19 Dec 2007 12:09:47 +0000 WebProNews Staff http://www.webpronews.com/?p=42804 The 700MHz wireless spectrum auction taking place in 2008 will have 96 bidders seeking this lucrative slice of the airwaves.

The 700MHz wireless spectrum auction taking place in 2008 will have 96 bidders seeking this lucrative slice of the airwaves.

Out of 266 prospective bidders for the 700MHz auction, only 96 received the Federal Communication Commission’s blessing as acceptable to file for that wireless spectrum. A couple of names stood out in the list.

Paul Allen, who co-founded Microsoft with Bill Gates in 1975, and Google have had their applications accepted by the FCC. They must make an upfront payment by 6 pm ET on January 4th, 2008, to proceed.

As part of the anonymous bidding process, information like the amounts of the upfront payments will not be publicized. Anyone disclosing non-public information, including those payments and license selections, could be in violation of the anti-collusion rules in place for the auction.

Google’s application under the name Google Airwaves, and Allen’s Vulcan Spectrum, are two of the accepted applicants. A couple of familiar names appear in the Incomplete applications list. Alltel and AT&T have some work to do to get their submissions up to spec, and resubmitted by the January 4th deadline.

 

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Consumer Affairs said Google is not pleased that these secret lobbying meetings between Verizon and Martin have taken place. A letter from Google’s Richard Whitt complained about the propriety of the alleged meetings:

Given that Verizon already has appealed the order in the U.S. Court of Appeals for the D.C. Circuit, however, it may not also at the same time seek FCC reconsideration. Under these circumstances, the Commission should declare that Verizon may not sidestep the mandatory procedures of the Communications Act and the Commission’s rules by denying the public the right to understand and respond to its reconsideration positions – or enjoying two bites at the proverbial apple.

Open access to the spectrum, were it run by Verizon, would allow people to bring devices from hardware makers who don’t have exclusive distribution deals with Verizon and use them as part of a subscription on 700MHz.

Without open access, whoever controls the 700MHz spectrum could continue locking out features for US consumers that wireless customers in Asia and Europe take for granted on their devices. That would not be a progressive development for future 700MHz subscribers.

A little openness would be a bad thing, if we are to believe Verizon Wireless. Google’s Public Policy blog wants everyone to know just what Verizon thinks of the requirements for the auction:

Earlier this week, Verizon Wireless filed a lawsuit against the FCC’s rules that would require the eventual winner of the spectrum offer open devices and applications. They called the rules “arbitrary and capricious, unsupported by substantial evidence and otherwise contrary to law.”

Verizon makes for an easy target, and Google takes full advantage. "It’s regrettable that Verizon has decided to use the court system to try to prevent consumers from having any choice of innovative services," Google’s Chris Sacca wrote.

Sacca also noted that Verizon’s suit considers the rules “arbitrary and capricious, unsupported by substantial evidence and otherwise contrary to law.” Verizon would be even more livid if the full set of proposed rules had made it into the auction.

Open applications and devices were nice rules for the FCC to apply, but of the four Google suggested these are the least important. Open services and networks would have been the true drivers of technological growth in wireless, but the FCC cowardly backed away from adopting those.