Friday, July 20, 2007

How to not be evil

Today's buzz is Google's Ex Parte FCC filing in which Eric Schmidt tells Chairman Martin that they have committed $4.6 billion to purchase spectrum in a future Upper 700 MHz auction - provided that the FCC structures the new service in such a way that license holders will have to offer at least 1/3rd of their spectrum to other companies on a wholesale market. The interesting thing about this is that the FCC's "auction reserve" has been said to be...$4.6 billion.

I think it's great that Google is trying to leverage their financial strength in order to ensure that wireless broadband remains somewhat open, and help prevent yet another telco monopoly from developing. The 1982 court-mandated breakup of the Bell system (the Greene Decision and subsequent Modified Final Judgement) opened the doors to increased competition and (some would argue) allowed technologies such as DSL to develop which would not have done so under the oligarchy of Ma Bell. To a large extent, today's cellular providers are no different than the wired telcos; largely run by a bunch of visionless business school graduates who are unresponsive to the needs of a market hungry for cutting-edge technologies. In a very real sense, the driving force behind wide-area broadband technologies such as WiMax exists because of the cellular carriers have consistently failed to meet those needs.

The carriers are of course not stupid, just short-sighted. Their initial response to alternatives was to be indifferent; then arrogant, and finally now they've become patronizing and suggested that the FCC should not allow "distractions" from smaller players (i.e. anyone who isn't a cellular carrier) and let them do what they will with the Upper 700 MHz spectrum. "Don't you worry your pretty little head about all this wireless stuff, young lady. This is man's work. Run along and play with your dolls now."

Allowing any one company or group to monopolize all or even a majority of the Upper 700 MHz would be a mistake of biblical proportions, and would result in the exact same kind of anti-competitive market and visionless wireless technology offerings the cellular carriers have today. The Upper 700 MHz spectrum is fertile soil in which entirely new markets can be grown and nurtured; wireless broadband, additional spectrum to relieve the crowding in 900/2400/5200 MHz ISM bands, and with any luck a nationwide interoperable emergency communications system which we desperately need and do not have today.

This isn't to say that if Google bought the Upper 700 MHz whole band that they would do the right thing either. Their mantra "Don't Be Evil" is simply that; a mantra. That and $3 will get you a latte at Starbucks, and I've always wondered when (not if) Google would devolve into a typical big company mentality. A few quarters with shortfalls in earnings ought to do the trick. But in the meantime, I think what they're doing is great and applaud them for their willingness to put their money where their mouth is.

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