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Google Pledges $4.6B for Spectrum

Google (Nasdaq: GOOG) has added to the pressure on the Federal Communications Commission (FCC) to adopt a more "open" approach to the forthcoming 700 MHz wireless broadband spectrum auctions, saying that it will meet the minimum price of $4.6 billion for a specific bandwidth block if the commission accepts four conditions it wants to apply to the auction winners.

The move comes after FCC Chairman Kevin Martin has already indicated that he wants the 700 MHz licensees to allow outside devices on a portion of the wireless broadband airwaves, as long as that doesn't interfere with the overall network. (See FCC Wants Open Broadband.)

Now Google says that it will meet the minimum reserve price of $4.6 billion for the 22 MHz "C" Block in the Upper 700 MHz Band if the FCC meets four conditions:

  • "Open access": Allowing users to download any applications they want over the network.
  • "Open devices": Ensuring that consumers can use any device they want on the network without being locked to a specific carrier.
  • "Open services": Resellers should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis.
  • "Open networks": ISPs should be able to interconnect at any feasible point in a 700 MHz licensee's wireless network.
Google and other groups such as Frontline Wireless, LLC have been pushing for more open access on the 700MHz auctions for a while now. The $4.6 billion reserve offer, however, cranks up the pressure further as the FCC mulls the conditions of the auction.

The jockeying for this prime wireless broadband spectrum is heating up as deadlines start to loom. AT&T Inc. (NYSE: T) said this week that it is in favor of the FCC's chairman's proposals for open access. Previously, the auction had looked like a more traditional race with carriers such as Verizon Wireless lined up against IT companies like Google and Intel Corp. (Nasdaq: INTC)(See 700MHz Throwdown Looms and 700MHz Debate: Safety or Shopping? ) The law requires the FCC to auction the 60 MHz of spectrum in the 700 MHz band by the end of January 2008. The bandwidth will become available as TV broadcasters move from analog to digital transmissions. The FCC is expected to vote on final auction rules within the next few weeks.

The last major U.S. wireless spectrum raised almost $14 billion in total in the fall of 2006. The 700MHz auction is likely to top that as the spectrum is regarded as far more attractive for deploying wireless broadband services that compete with cable and DSL. (See Big Guns Dominate Spectrum Auction.)

— Dan Jones, Site Editor, Unstrung

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