Google commits to bid at least $4.6 billion for 700 MHz band; calls for FCC to serve consumer interests

By Ken Kerschbaumer

Google is dangling a carrot-on-a-stick in front of the FCC by urging the FCC to adopt rules for the auction of 700 MHz spectrum that will ensure that, regardless of who wins the auction, consumer interests will be served. In addition, if those terms are met Google says it will commit at least $4.6 billion towards a bid.

Specifically, Google encouraged the FCC to require the adoption of four types of “open” platforms as part of the license conditions:

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;

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.

Google CEO Eric Schmidt sent the letter to FCC Chairman Kevin Martin, stating that should the FCC adopt all four license conditions requested above, Google intends to commit a minimum of $4.6 billion to bidding in the upcoming 700 MHz auction.

“The Commission’s draft order for the 22 MHz “C” Block in the Upper 700 MHz Band reportedly allocates this block on a REAG basis subject to combinatorial bidding and includes some reference to “open access” principles,” said Schmidt in the letter. “While these all are positive steps, unfortunately the current draft order falls short of including the four tailored and enforceable conditions, with meaningful implementation deadlines, that consumer groups, other companies, and Google have sought. In short, when Americans can use the software and handsets of their choice, over open and competitive networks, they win.”

While the auction of the 700 MHz spectrum does not directly impact those who use White Space spectrum it does give those users potential fodder against plans to allow unlicensed consumer devices into the White Spaces spectrum. Any plans to turn over that spectrum to the public for free would greatly undercut those companies, like Google, who are interested in acquiring 700 MHz spectrum. In addition it would undercut the value of 700 MHz spectrum as the value of that spectrum is directly related to the limited amount of spectrum available for public use.