Google vs. the Wireless Carriers- No Question Who the Audience Favorite is

July 23rd, 2007

The FCC is putting up for auction next year a slice of radio spectrum that will go dark when analog TV is shut down net year, and is due to set the rules for the auction in the next few weeks. To the great pleasure of many, Google plans to bid on a portion of that spectrum, with the intent of providing carrier-neutral cellphone service. In other words, consumers with phones that use the spectrum could freely jump around to any carrier. No more 2 year contracts.

Google’s bid depends on the FCC approving this use along with other conditions that go along with it, like (somehow) requiring handset makers to make phones using the new 700mhz spectrum. The network would need to be built out as well, so I guess the handsets go, err, hand in hand with cell site relays that can handle the traffic, etc.

The major carriers were up in arms about Google’s bid at first. They claimed that Google was stifling competition by imposing these conditions and that the spectrum should simply go to the highest bidder- no conditions, just whoever can pony up the most cash. More recently, AT&T had an about-face and endorsed the FCC’s proposed rules, which largely accept Google’s proposal, but also impose a reserve price so that if the bids aren’t low enough the FCC can re-run the auction.

Phew! So the carriers are slamming Google for being anti-competitive, Google says its conditions are necessary in order to allow anyone other than the major carriers to compete in the space, and some third parties are lambasting the FCC’s reserve bid rule as anticompetitive insofar as it prevents startups with shallow pockets, like Cyren Call and Frontier Wireless from making a bid.

Here’s my take. People are wary of Google and more and more seem to take the “don’t be evil” motto with a big grain of salt. On the other hand, consumers hate their wireless carriers about as much as they love the convenience of their mobile phones. So when Google and the carriers start slinging “anticompetitive” mud at each other it’s no big surprise which side wins and which gets told to ease up on the chutzpah.

Personally, I think “wireless network neutrality” will fill a niche in the industry, especially for early adopters (such as iPhone buyers) willing to pay more for handsets. If consumer ability to jump carriers easily pushes carriers a bit then that would be great as well- maybe they will stop charging more to buy a ringtone than it costs to buy the whole song on iTunes. It will be a great experiment, if nothing else.

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