Google Set to Bid Billions for Airwaves
23/07/2007
Such a provision, Google argues, will give consumers — who traditionally get high-speed Internet access via cable or telephone lines — a third option for service.

By THE ASSOCIATED PRESS Published: July 20, 2007

WASHINGTON, July 20 (AP) — Google said today that it would bid at least $4.6 billion on wireless airwaves being auctioned off by the federal government — if certain conditions are met.

The Internet search company wants the Federal Communications Commission to mandate that any winners lease a certain portion of the airwaves to other companies seeking to offer high-speed Internet and other services.

Such a provision, Google argues, will give consumers — who traditionally get high-speed Internet access via cable or telephone lines — a third option for service.

The F.C.C. chairman, Kevin Martin, last week previewed draft rules for the auction that did not include this so-called wholesale provision.

That is a sticking point for Google, which sees the wholesale provision critical to promoting competition in the wireless broadband marketplace. It wants one-third of the airwaves being auctioned off to be offered on a wholesale basis.

In a letter to Mr. Martin, Google’s chief executive, Eric E. Schmidt, said the current proposal falls short of what it, consumer groups and other companies want.

"In short, when Americans can use the software and handsets of their choice, over open and competitive networks, they win," he wrote in the letter dated today.

Google’s position puts it at odds with major carriers like AT&T and Verizon Communications, which favor the current auction draft rules and plan to bid as well.

In a statement Thursday, Jim Cicconi, AT&T’s senior executive vice president for external and legislative affairs, said Mr. Martin’s proposal was an "interesting and creative balance" that would not change the business models of AT&T and others. He said Google would now have to "put up or shut up."

"If they are serious, they will be able to bid and test their model in the marketplace against the business models of companies already enjoying widespread consumer acceptance," he said.

But Mr. Martin’s draft proposal did contain a rule on open access that seems to be favored by all potential bidders. It also means Google’s conditions would be at least partially met. Open network access would allow consumers to buy the wireless device and software of their choice and use it on the new network.

The auction, which must take place before Jan. 28, 2008, could raise as much as $20 billion for the Treasury.