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The Honolulu Advertiser
Posted on: Saturday, July 21, 2007

Google plans bid for open spectrum

By Jim Puzzanghera
Los Angeles Times

WASHINGTON — If Google Inc. has its way, your cell phone will work on any wireless network and companies will sell high-speed Internet access for cut-rate prices.

Google thinks that would be a wonderful world — for consumers as well as its own bottom line — and is proposing to pony up $4.6 billion in a long-shot bid to create it.

The king of Web search yesterday offered to dig into its mountain of cash to transform a chunk of prime public airwaves into a high-speed data freeway. If successful, it could drive down the price of Internet access by creating more competitors to phone and cable companies.

Google promised to bid in an upcoming federal auction of spectrum that is ideal for fast wireless Internet service — but only if regulators agree to the company's proposals to require open access to those airwaves. That means any device, service, software application or network could operate on it with no restrictions.

Google told the Federal Communications Commission it would put up the minimum bid of $4.6 billion. The Mountain View, Calif.-based company wanted to prove its seriousness and counter big wireless companies such as AT&T Inc. and Verizon Communications Inc., which say the conditions would make the spectrum virtually worthless.

The offer is unlikely to sway the FCC. The agency thinks the airwaves being given up by TV broadcasters in 2009 as they switch to digital signals could fetch much more for the federal coffers.

But Google is showing its intention to influence one of the biggest spectrum auctions in the nation's history.

Despite its promise to bid, Google actually might not want to license the airwaves itself. But it does want to force them open to increase competition with cable and phone companies — and make it cheaper for people to get on the Web and use Google's growing array of services.

Wireless companies now control all access to the spectrum they license from the government, which is why, for example, Apple Inc.'s iPhone can't be used on any network other than AT&T's. Under Google's plan people could connect any device to any network and run any software they want on their phones, such as free Internet-based calling systems.

But most important for boosting competition, companies would have the right to use the airwaves at a wholesale price to offer their own Internet access.

"In short, when Americans can use the software and handsets of their choice, over open and competitive networks, they win," Google Chief Executive Eric Schmidt wrote in a letter to FCC Chairman Kevin J. Martin yesterday.

The effort is backed by public-interest groups and a coalition of major technology companies, including Intel Corp., eBay Inc., Yahoo Inc., DirecTV Group Inc. and EchoStar Communications Corp. But it faces huge obstacles in Washington, where the politically powerful phone companies have been fighting it.

The FCC is still drawing up the rules for the airwave auction, and Google's plan is a long shot.

AT&T slammed Google's bid offer yesterday, saying it was just an attempt to pressure the FCC to "stack the deck in its favor."

Under the traditional auction rules, Google says it and other companies can't outbid the big phone companies because of their built-in advantage of existing networks of cellular towers and pools of customers.

"It doesn't matter whether or not Google has the deep pockets — at some point you've got to say this is just an unreasonable investment," said Richard Whitt, Google's telecom and media counsel in Washington. "We're just trying to un-skew things enough to give Google ... or a DirecTV or an EchoStar or a Yahoo or whoever comes in there at least a decent shot for the spectrum."