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Google Pledging to Bid $4.6bn to Open Spectrum

Posted by ScuttleMonkey on Mon Jul 23, 2007 04:53 PM
from the monies-and-mouths dept.
Businesses Google The Internet Communications
csuftech writes "According to an article posted on vnunet, Google is pledging to bid at least $4.6bn for the FCC's upcoming auction of the 700MHz spectrum. However, Google would only be willing to pay said amount if the FCC agreed to a few conditions, namely, 'the wireless spectrum would allow consumers to download and use any software apps and content they want; allow handhelds to be used with any carrier; enable resellers to acquire wireless services at wholesale costs; and mandate that third parties such as ISPs interconnect at any point on the 700 megahertz band.' All this was disclosed in a letter [PDF] to FCC president Kevin Martin written by Google CEO Eric Schmidt."
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[+] Hardware: 700 MHz Auction Begins Tomorrow 187 comments
necro81 writes "On Thursday, after much speculation and wrangling, the FCC will begin auctioning licenses to the coveted 700 MHz band that will be vacated by analog TV in 2009. The NY Times has a good summary of the players (AT&T, Sprint, Verizon, Google, et al.), how the auction will work, how Google has already scored an open networks victory, and what it could all mean for consumers. The auction will go on for several months, but you can keep tabs on the bids at this FCC site."
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Google Pledging to Bid $4.6bn to Open Spectrum 50 Comments More /

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  • Familiar (Score:5, Informative)

    by Anonymous Coward on Monday July 23 2007, @04:55PM (#19962223)
    Er, haven't I seen this somewhere before [slashdot.org]?

    • Re:Familiar (Score:5, Funny)

      by Anonymous Coward on Monday July 23 2007, @05:19PM (#19962513)
      That's why we need the extra spectrum -- carrying all those dupes adds up.

    • Er, haven't I seen this somewhere before [slashdot.org]?
      What do you expect? It's Scuttlemonkey. Good thing he's not being paid to be an editor, right?

  • I'm not a Google Fanboy, but... (Score:5, Interesting)

    by cromar (1103585) on Monday July 23 2007, @04:55PM (#19962225)
    I do appreciate them fucking up the corporate status quo. This debacle is getting very interesting.

    • Re:I'm not a Google Fanboy, but... (Score:5, Interesting)

      by kaiser423 (828989) on Monday July 23 2007, @05:04PM (#19962331)
      John Walls, vice president of public affairs at the CTIA, said that the pledge re-affirms his organisation's belief that the proposed deal smacks of foul play.

      "The letter highlights Google's scheme to have the auction rigged with special conditions in its favour," he told vnunet.com.

      "Nobody should be able to buy a custom-fit government regulation tailored to their business plan."

      Yea, this reminds me of the guy form "Thank You For Smoking"

      That has to be one of the most blatantly false statements that I've heard in a while. Wow. I guess this really is rocking the boat, and has a couple of carriers pretty scared.

      Kudos to google, way to not be evil!

      • Re:I'm not a Google Fanboy, but... (Score:4, Insightful)

        by TubeSteak (669689) on Monday July 23 2007, @05:20PM (#19962539) Journal

        "Nobody should be able to buy a custom-fit government regulation tailored to their business plan."
        Well, that is technically what they're trying to do.

        The fact that /. likes the terms Google is trying to impose does nothing to change the fact that they're buying government regulation.

        Is it really that hard to imagine a situation where the regulations go in a different direction?

        • Re: (Score:3, Insightful)

          by dgatwood (11270)

          Yes. It's pretty hard to imagine the FCC making any decision that doesn't involve the public getting screwed. History has taught us that they will accept restraints on freedom with alacrity, but will release those restraints only under force of law.

          I'd love it if Google won this battle, but I'd just about place bets against it.

        • Re:I'm not a Google Fanboy, but... (Score:5, Insightful)

          by Jherek Carnelian (831679) on Monday July 23 2007, @05:36PM (#19962703)
          I think there are two points here:

          1) The requirement that the highest bidder open part of their spectrum is not part of Google's business plan beyond the fact the open access is good for the net in general. That's why the claim is false.

          2) Almost all of the tariffs in telco land are custom-fit goverment regulation tailored to their business plans. That makes the claim very hypocritical.

        • Re:I'm not a Google Fanboy, but... (Score:4, Insightful)

          by kaiser423 (828989) on Monday July 23 2007, @05:45PM (#19962789)
          My point being that what the CTIA is advocating is that the people whom buy the spectrum get to implement their business plan, and theirs only. Hence, they would also be buying a custom-fit business plan with regulation.

          Second, it is not custom-fit to Google. It's a generic fit for a large number of people. There are plenty of other business plans that Google could implement that would be much less free, and would be a "custom-fit," such as requiring everything that any user or piece of software does be able to be indexed by Google.

          • Re:I'm not a Google Fanboy, but... (Score:4, Insightful)

            by TopSpin (753) * on Monday July 23 2007, @07:01PM (#19963609) Journal

            Hence, they would also...
            Opps.

            Second, it is not custom-fit to Google.
            It is, but it also happens to align with consumers. Companies like Apple and AT&T dream of leveraging exclusive products/services like iPhone into 'revenue sharing' arrangements with content providers like Google. Google is attempting to make that dream impossible. It goes directly to Google's business model.

            • Google is attempting to make that dream impossible. It goes directly to Google's business model.

              Your comment goes to the heart of the matter.
              The GP claims that "It's a generic fit for a large number of people."
              What he seems to be forgetting is that Google is not going to buy up all the spectrum across the country.

              Their $4.6 B bid isn't just buying them 1/6th of the country, it's also going to get them access @ wholesale cost to the other 5/6ths.

              And that is actually worth a lot more than $4.6 billion.

            • Re: (Score:2, Informative)

              by kaiser423 (828989)
              What do you mean "Oops"?

              My initial post was about how hypocritical it was for the CTIA spokesperson to make that statement, and act like Google was doing something new, drastic, and evil, when in reality the people he represents would take the same steps that he so vigorously condemns.

              I never said anything about this not fitting in with Google's business plan, or that they were being altruistic. Just that it seems like their plans are shaking things up a bit and scaring some of the typical teleco's.

        • Re:I'm not a Google Fanboy, but... (Score:5, Interesting)

          by daigu (111684) on Monday July 23 2007, @07:23PM (#19963811) Journal
          While I agree with the initial comment, the reality is that the process for formulating regulations gives businesses a great deal of input and effectively makes most regulations custom-fit for the industries involved. The only real difference here is that Google is challenging the existing custom fit model with another - one that is more congruent with the public interest.

          Sure, it would be better if the regulations were primarily concerned with the public interest, but if we don't have that, this is certainly a better alternative than how it would have played out had Google not gotten involved.

        • The fact that /. likes the terms Google is trying to impose does nothing to change the fact that they're buying government regulation.

          Google's plans for access to the airwaves is less of a regulation than regulating who can determine who and what can access the airwaves. These telcom insiders only want to prevent competition, whereas Google wants to introduce competition.

          Falcon

      • Re: (Score:3, Insightful)

        by thegnu (557446)

        Who's to say they're not just posturing in the name of "freedom" now and won't do something horribly evil once they get their piece of the pie?

        Yeah, I've been saying that for years. Then I finally stopped, because it's been, up to this point, like waiting for the apocalypse: every few years, people start screaming about the end of times, then nothing happens, and people are quiet for a little while.

        When the hell is it going to happen? I've been waiting for it to happen for a long time. I'm sure someday i

        • Re:I'm not a Google Fanboy, but... (Score:5, Insightful)

          by Vancorps (746090) on Monday July 23 2007, @06:18PM (#19963181)

          You make a fine point but in addition opinions and controls over Google today don't have to be the same tomorrow. If they turn evil then we have some measured control we can exert. How effectively we exert it is a different question but theoretically they couldn't start dumping toxic waste into Seaworld so there is no point in fearing the impending apocalypse which involves my porn viewing habits being leaked to the press because I opposed legislation that Google later wanted. So far they seem to want to play nice. I say encourage this corporate attitude, embrace it! Ben and Jerry's was quite successful while holding onto corporate ethics, I see no reason why Google couldn't do the same thing.

          The particular language Google wants added seems counter to their interests but creates a free market where you compete on quality of service which sounds good to me and sounds good for them given the nature of their products. It adds risk to the process but Google is acting as if it has nothing to fear from a little friendly competition and in reality, they don't. If only the big telecoms of the world would see this as a good thing. Unlike Sprint buying sprectrum and not even using it thus preventing others from using it.

  • +1 karma (Score:5, Insightful)

    by Xeth (614132) on Monday July 23 2007, @05:01PM (#19962287) Journal
    I guess this balances out the "Don't be Evil" scale a bit in their favor, eh?

    To preclude those decrying false philanthropy, yes, of course Google will benefit. There is, however, such a thing as a mutually beneficial agreement. And this really looks very nice from where I'm standing

    • How dare you speak of good business practices in this day and age of immediate quarterly gains! I really just don't know if the business folks in charge these days are that stupid, that they just don't understand what they were taught in economics (yes, modern business classes actually do teach how things can and should work out for everyones benefit like a nice and pretty capitolist economy should), or if it is just because so many current business "leaders" got there by inheretence, marraige, or purchase
    • I mentioned this on my blog [bfccomputing.com] on Friday - when Dr. Ron Paul was at Google [youtube.com] he said that the spectrum should just be auctioned off to the highest bidder and let the Free Market sort it out. I don't think all the folks in the room at Google thought that was the right answer at the time, but it's good to see the decision makers at Google have taken that kind of advice to heart and applied Corporate Good to the equation.

      Just because it goes to the high bidder doesn't necessarily mean that it has to be Verizon or

      • Re:+1 karma (Score:5, Insightful)

        by ajs (35943) <ajs AT ajs DOT com> on Monday July 23 2007, @05:56PM (#19962921) Homepage Journal

        Censoring free speech sites in China vs Cheap wireless broadband in the US.
        Actually, they don't Censor free speech sites in China.

        In fact that statement doesn't even scan.

        There are no free speech sites in China. There is no free speech in China.

        Google can't censor someone's site.

        What Google does is restricts their search results as per the guidelines of the Chinese government. They could have decided that the search results were too important to censor, but had they done that, the only difference would be that Google wouldn't be available at all in China. They're doing much more good by offering some service in China than they would be by offering none. If they had a better negotiating position, then I'd agree with you, but they literally had none.
        • Google probably does more good than harm with this, but their mission statement is not about doing good. It is not about having a positive net impact. It is about doing no evil.

          • Re:+1 karma (Score:4, Insightful)

            by earnest murderer (888716) on Monday July 23 2007, @08:32PM (#19964319)
            It's not even a mission statement. It's a cute quip that got bandied about and became an "informal corporate motto".

            Google's mission is to organize the world's information and make it universally accessible and useful. [google.com] Access to the 700 mhz spectrum is key to their ends. If they do not acquire it either outright or by leasing it from a third party, they will have failed in a major way. The argument for the rule change is insurance against that failure.

            • Re: (Score:3, Informative)

              by ajs (35943)

              It's not even a mission statement. It's a cute quip that got bandied about and became an "informal corporate motto".

              If you're talking about the "don't be evil" line, then you're deeply wrong. That phrase has tremendous legal importance to Google because it appears in their S1. An S1 (AKA a "red herring") is the document you file with the SEC that tells investors what your company does and what risks it takes. If you say, "we sell bottled water, but only to the criminally insane," in your S1, then your investors know up-front what business they're getting into, and have no grounds to complain when you don't make as much

          • Google probably does more good than harm with this, but their mission statement is not about doing good. It is not about having a positive net impact. It is about doing no evil.

            The motto is not "Do no evil". It's "Don't be evil".

        • AAMOF, if I have a site and you know the URL, we can keep using the site without it being indexed on Google. If Google indexed it and the government found it, we'd be in shitloads of trouble if the government was using force to shut down sites like it.

          While Google not indexing these things might keep word about pro-freedom sites from getting to the people so quickly, it's also going to make it harder for the government to find them in order to shut them down.
          • There are plenty of ways to tell Google not to index your site. robots.txt, meta noindex, etc.

          • The Chinese government controls the routers and IP traffic thereby keeping people from reaching the sites they find objectionable. Google keeps people from finding out about the existence of those sites by striking them from their search engine results. Last time I checked, aiding and abetting was a crime in this country.

            When you say "this country", I assume you are not referring to China? The Chinese government would hardly make it a crime to aid and abet the Chinese government. I can't off-hand think o

  • is it not a bad idea to tell people how much you willing to bid in an upcoming auction?

    • RTFL (Score:5, Insightful)

      by conspirator57 (1123519) on Monday July 23 2007, @05:07PM (#19962377)
      It says a *minimum* of $4.6b. This is the reserve price of the spectrum. In fact there's a nice jab at the industry protectionism that brought about the reserve. Google is just saying that they're willing to ante up. Were there to be other bids, there is still ample room left in the letter for Google to bid.
      • True. I think that, along with the mutual benefit thing (unfortunately of late I've become rather neutral on google, so I would love to be pleasantly surprised), this is also just good tactics. They're holding all the aces, and they know it.

        They've probably got a bit of good exposure, and managed to weed out the companies who would flirt around the issue without ever throwing their hat into the ring, so to speak. The bar has been set at $4.6B, and that's going to be the admission price to play with th

    • Re:Is it just me, or (Score:5, Funny)

      by vertinox (846076) on Monday July 23 2007, @05:44PM (#19962787)
      Google: I'm going to bid $4.6 billion dollars tomorrow at tomorrows auction.

      ATT: Cool... (Crap! I know we can't beat them with cash reserves so I'll bid high and force them to spend their fortune for it!)

      *The very next day*

      Auctioneer: Here we are with a block of airwaves. Starting bid.... One billion dollars....

      ATT: $10 BILLION DOLLARS!!

      Auctioneer: $10 billion is the current bid. Do I hear $11 billion dollars... Going once...

      Google: *yawns*

      Auctioneer: Going twice...

      ATT: Hey wait a minute!

      Auctioneer: Going three times! Sold to the gentleman from ATT for $10 billion dollars.

      ATT: But! But! But!

      Google: Hey ATT if you don't want those airwaves, give us call us after the opening bell after your quarterly reports and we'll talk.

  • This just in... (Score:5, Funny)

    by the.nourse.god (972290) on Monday July 23 2007, @05:05PM (#19962343) Homepage
    With 2 seconds left in the auction, AT&T puts in a $4,600,000,001 bid.

    • Re: (Score:3, Interesting)

      by MonGuSE (798397)
      Ebay cancels auction due to a DMCA takedown notice. AT&T already owns the patent on monopolistic intervention.

      Seriously though the Google proposal is the only one that actually creates a level playing field for any concerned service providers. The problem the other companies have is that it allows for other companies to compete with them instead of granting them government approved monopolies. I hope the FCC wakes up and sees Google's proposal for what it is a sensible solution for all parties concerned
  • Google won't bid if evil business models are allowed, so I guess they are tacitly admitting that their open access business model has no hope of competing against the telcos' "lock 'em in, and then lock 'em in some more" business model. It'll be interesting to see how this one plays out.

    • Google won't bid if evil business models are allowed, so I guess they are tacitly admitting that their open access business model has no hope of competing against the telcos' "lock 'em in, and then lock 'em in some more" business model. It'll be interesting to see how this one plays out.

      No, you've got it exactly wrong. What they're saying is that their open access model can compete effectively against the locked-in model. The problem is that there currently isn't any spectrum available for open access. They are requesting that this change.

      • The problem is that there currently isn't any spectrum available for open access.

        No, if Google buys some 700MHz spectrum in the auction they can set the rules for that spectrum to open access.
    • I think it's more fundamental; google is trying to commoditize access routes to their services. This is just a step in that direction. By decreasing costs of accessing their stuff, they're increasing the value of their services.
  • If Google wins the auction, why would they need the Government to makes some rules about who can access it? If Google owns the spectrum, don't -they- get to set the rules?

    • Re:Don't get it (Score:5, Informative)

      by Wesley Felter (138342) <wesley@felter.org> on Monday July 23 2007, @05:30PM (#19962651) Homepage
      There will probably be multiple winners, and Google wants the government to set the terms for all of the winners, including Google's competitors.

    • Re: (Score:3, Informative)

      by mr_matticus (928346)
      Google won't own the spectrum. They'll own the government license for the spectrum. They're still publicly owned airwaves, just privately operated.

    • If Google wins the auction, why would they need the Government to makes some rules about who can access it?


      There won't be just one winner of the auction. Google is saying they'll bid only if the rules are that every winner must provide certain types of open access. They are basically attacking the premise that not requiring open access serves the public interest, at a minimum, by increasing the willingness of purchasers to bid for the spectrum.

  • It looks from the summary that the is FCC selling all of the 700MHz band to a single bidder. Why don't they sell geographical junks of it? It's very hard for a monopoly to arise on a limited resource because the price of each additional unit goes up as you are trying to bid for the next on. What the FCC is doing here is
    a) stealing the resource (the FCC don't own the band, they're not selling it they are holding it hostage for a ransom)
    b) selling it as a whole, making it possible for a inefficient monopoly t

    • Re:Single buyer ? (Score:5, Insightful)

      by kaiser423 (828989) on Monday July 23 2007, @05:49PM (#19962841)
      Because it would drastically lower how valuable the spectrum is. If your service can't be "country-wide", then it's not of much value.

      I wouldn't buy a cell phone that works in San Fran but not in New York.

      In fact, you'd have a hard time getting me to buy ANYTHING that doesn't work country-wide, and I imagine that a lot of people feel the same.

      Not to mention all the technical issues with interference near the boundaries, etc. It would just be a total mess for no verifiable gain, especially since there are a large number of frequencies which can do nearly the same things (though not identical) which renders your monopoly argument moot.

  • Excellent quotes (Score:3, Interesting)

    by jonniesmokes (323978) on Monday July 23 2007, @06:50PM (#19963487)
    -- begin excerpt --

    The Cellular Telecommunications Industry Association (CTIA) has dismissed Martin's plan as "Silicon Valley welfare", claiming that it gives Google an unfair advantage.

    John Walls, vice president of public affairs at the CTIA, said that the pledge re-affirms his organisation's belief that the proposed deal smacks of foul play.

    "The letter highlights Google's scheme to have the auction rigged with special conditions in its favour," he told vnunet.com.

    "Nobody should be able to buy a custom-fit government regulation tailored to their business plan."

    -- end excerpt --

    I think John Walls might want to add, "except Baby Bells of course." Its so not fair when a brand new billion dollar company gets into your game.

  • Not just Google (Score:3, Interesting)

    by Darth Cider (320236) on Monday July 23 2007, @07:13PM (#19963719)
    Google is putting up money, but its proposal to the FCC is backed by Intel, Yahoo!, eBay, Skype, DirecTV, EchoStar, and Access Spectrum (which constitute The Coalition for 4G in America), but there are many other groups also in favor of open access. See this write-up on Daily Wireless [dailywireless.org] for a good overview, and read Google's own explanation [blogspot.com] on its Public Policy Blog.

    I wish Slashdot paid more attention to wireless goings-on. For instance, just this week, Sprint announced it is forming a 20 year alliance with Clearwire. The two companies are rolling out WiMax phone and broadband services, and together spent billions to control spectrum that reaches nearly everyone in the U.S. Wouldn't it be nice if they had to lower their price to consumers because of open-access competition in the 700mhz band?

    Robert X. Cringely's latest article is a good read, too. "When Elephants Dance: Get ready (finally) for faster Internet speeds at lower prices" [pbs.org]

    I live in a rural place that is lucky to have one broadband provider, a cable company. (Nope, no DSL.) If open access succeeds, small wireless ISPs will sprout up in places like this, which big companies always seem to neglect. Those ISPs would be paying wholesale prices for their spectrum, too, so regional monopolies like my cable company will finally face some pressure to lower their prices, or else to compete on speed and service.
  • We've seen this before.

    Is there any word on whether the FCC is going to go for it?
  • WE WANT THE AIRWAVES

    nine to five and five to nine
    ain't gonna take it, it's our time
    we want the world and we want it now
    we're gonna take it anyhow

    we want the airwaves
    we want the airwaves
    we want the airwaves baby
    if rock is gonna stay alive

    oh yeah
    well all right
    let's rock tonite
    all night

    where's your guts and will to survive
    and don't you wanna keep rock & roll music alive
    mr. Programmer, I got my hammer
    and I'm gonna smash my, smash my radio

    we want the airwaves
    we want the airwaves
    we want the airwaves baby
    if ro
  • Can someone please explain to me not only how Google makes money, but makes THAT much money that they can spend 4.6bn on various things like this? (I'm serious, this isn't rhetorical or sarcastic -- either something doesn't add up, or my perception of how much money can be made from tiny little advertisements on web pages is WAYYYY out of whack)

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