Business/Finance

When titans clash: Google vs. AT&T for America’s Internet future


By Martin Bosworth

The Federal Communications Commission recently announced plans to auction off portions of the wireless spectrum in order to raise money for the government. Although supporters of net neutrality and broadband access wanted the spectrum to remain open in order to build a national wireless broadband network, it was generally expected that incumbent telecoms like AT&T and Verizon would use their mountains of cash to outbid other participants and hoard the spectrum for their own offerings.

Until now. Google has publicly promised $4.6 billion for the spectrum auction if the FCC agrees to uphold four principles of open access for its use:

  • Open applications: consumers should be able to download and utilize any software applications, content, or services they desire;
  • Open devices: consumers should be able to utilize their handheld communications device with whatever wireless network they prefer;
  • Open services: third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
  • Open networks: third parties (like Internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee’s wireless network.

This is an incredible development that set the technology news community collectively ablaze. More importantly, it’s as bold a statement as one can make to the spawn of Ma Bell that they are no longer the only game in town when it comes to building America’s Internet future.

Incumbents enjoy far too many advantages in the communication world that distort the market and preclude real competition. It’s that market power that enables cell phone companies to lock you into long-term contracts and charge punitive fees for breaking your contract. It’s that market power that enables overpaid telecom lobbyists to hand-puppet the FCC and push through industry-approved video franchising rights which enable telecoms to bypass cable regulations and offer the same services–and only in the richest and best neighborhoods to boot.

And it’s that market power that enables incumbent telecoms to continue to reap profits from overpriced, underperforming services while our country continues to slide down the ladder of broadband connectivity for its people.

But Google’s challenge represents a watershed moment in telecom history–a moment when a true “third pipe” could actually be visualized as an alternative to typical cable and telecom companies’ service. The battle is far from won, but the stakes have just been raised to a tremendous level, and everyone who’s concerned about America’s Internet future needs to pay attention.

10 replies »

  1. Thanks for pointing this out, Martin – I’d seen the headlines about Google and the FCC and wireless spectrum, but hadn’t had a chance to dive into the details.

    If the FCC buys into this, and if incumbents can’t afford the price tag to buy the spectrum out from under Google, then this has some interesting possibilities that I need to think through a little more (after I finish drinking my caffeine and mate’ wake-me-up).

  2. Of course, as wonderful as this all is, the FCC might as well have “a wholly owned subsidiary of AT&T” on its logo. The question is whether the money Google is offering up is enough to make it hard for the FCC to do the wrong thing.

  3. Martin,

    Thank you. As a rural, residential non-customer of any major Internet service, I await consumer-friendly developments.

    I may wait a looooonng time, but I’m waiting.

    Denny

  4. Sam,

    Given the current cash-strapped state of our federal government thanks to the Iraq atrocity, you think they could turn down almost $5 billion? Even in cozy patronage situations like the FCC and the telecoms, money trumps influence.

    Denny,

    That’s why I do it, man. The Internet belongs to all of us, and it is criminal that people are denied access simply because of where they live.

  5. I worry that government imposed regulations will only prevent us from catching up to other countries’ broadband service. Google will soon realize that they need a robust network to get all its content to consumers. If all content must be treated equally, it will be treated equally in a way that will hamper user experience. Meaning emails, blog posts, video and audio streaming and telemedicine all will have to be treated the same. It only takes seconds to get emails now but when you have emails competing with audio and video content, it could take hours, perhaps days to get a simple email.

    HandsOff
    With Hands Off the Internet.

  6. Just a reminder to everybody – our HandsOff friends here are an astroturf group backed by AT&T (and I think Verizon – and probably more big telco types). If they’d like to join the discussion that’s cool – I used to work for a telco myself – in PR, no less – and am more than happy to include their perspective. But they will NOT be allowed to pretend they’re something they aren’t in the process.

  7. ‘Meaning emails, blog posts, video and audio streaming and telemedicine all will have to be treated the same. It only takes seconds to get emails now but when you have emails competing with audio and video content, it could take hours, perhaps days to get a simple email.”

    Uhuh. Doubt it. But if so, think the Bells might want to discuss all the money they took to expand the network – then never did?

    But if the telecoms don’t think they can manage to handle the the public spectrum in a way that makes it work there’s always a solution to that.

    I don’t think they’d like that solution.

    But then the spectrum isn’t theirs anyway, is it?

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