August 1st, 2007
FCC opts for open access -- not just that open
The Federal Communications Commission passed open access rules for next year’s auction of 700MHz spectrum, giving a partial victory to Google and a decided slapdown to Verizon and other cell phone companies. The agency approved rules proposed by chairman Kevin J. Martin that will let customers use any phone and software they want on networks using about one-third of the spectrum.
Google’s further-reaching proposal — to require the winner of the auction to resell access to other companies — did not pass muster.
While the language of the ruling has not been made public, it appears that any company that buys the new spectrum will have to leave it open to devices it does not approve or control. If, for instance, Verizon were to buy spectrum, consumers would have to pay Verizon for access to its network but they could use devices of their own choosing on it.
The decision means there will be open access to software applications and devices, if not to third party services, which Google sees as “real, if incomplete, progress,” Richard Whitt, Google’s Washington telecommunications and media counsel, said. He added that Google might yet bid on the spectrum.
Speaking before the F.C.C. on Tuesday, Jason Devitt, co-founder and chief executive of Skydeck, a Silicon Valley wireless content firm, said the cellular phone industry had failed to innovate. “Ten years and we have ring tones,” he said.
For its part, Verizon was underwhelmed. “We don’t really have anything to say about this,” said Jeffrey Nelson, a spokesman for Verizon Wireless. But AT&T, which had already taken a more conciliatory stance, said the plan was a “reasonable balance between the competing interests debating the Google Plan.”
But as AT&T points out, the move cuts Google out of access to spectrum merely by leasing it from the high-bucks winner. It will have to bid and win the auction in order to play.
“We commend the FCC for adopting this approach rather than stacking the deck in Google’s favor, which would limit competing bids and effectively force wireless carriers to alter their competitive business models to Google’s liking,” AT&T said.
But, of course, Google does have the cash to compete for the spectrum — and this “last beachfront property on the Internet” is surely worthy of a few billion dollars. Google has already reserved $4.6 billion — the minimum amount to participate.
“As a practical matter, the F.C.C. has laid down the gauntlet to the technology industry and said the following: ‘If you want a wireless market that serves your purposes, you’re going to have to pay for it, and you’re going to have to pay a lot,” said Reed Hundt, a former F.C.C. chairman who has founded Frontline Wireless, a national digital wireless network.
