FCC to Rule on Wireless Auction
Monday, July 30, 2007
The Federal Communications Commission will set the rules tomorrow governing the auction of $15 billion of public airwaves, a decision with stakes so high that the major U.S. cellular carriers and Google have spent millions of dollars on a lobbying campaign in an attempt to influence the outcome. The decision could dramatically alter the nation's cellphone industry.
Google, the giant Internet search company, wants to extend its popular tools, which include e-mail and video, to the rapidly expanding mobile phone market. To do so, it may spend billions to build a new, open network it says will loosen the grip telecom operators have over how consumers use their cellphones.
Currently, the major U.S. wireless carriers, including AT&T and Verizon Wireless, largely decide which Web sites, music-download services and search engines their customers can access on their cellphones. This is accomplished by wireless companies determining which cellphones will receive their services: AT&T, for example, is the only carrier available to users of Apple's iPhone.
Google wants to end that restriction and has urged the FCC to require the winner of the auction to build a network that will be open to all cellphones and services, so any consumer can have access to Google's array of offerings.
AT&T and Verizon Wireless have been eyeing these airwaves for almost a decade, waiting for them to be abandoned by television broadcasters moving to digital programming. The airwaves, which are ideal for carrying wireless signals, are particularly valuable because they will be the last up for auction for decades. The auction is to take place in January.
They are crucial to wireless carriers looking for more ways to put ever-more-elaborate video, music and Web-surfing tools in consumers' hands, especially as cellphones continue to replace telephone landlines and offer services heretofore available only on a computer. But the auction is also testing the political might of Google, which has to this point been somewhat of an outsider in Washington.
Google, in its first serious foray into the Washington regulatory scene and, potentially, the wireless industry, has offered to spend at least $4.6 billion for the airwaves it would use to build the network it envisions if the FCC's rules work in its favor. The move reflects Google's growing ambitions to reach consumers in new ways while exerting its influence on policy it sees as critical to its future. But the company's efforts to recast the wireless landscape have met fierce opposition from AT&T and Verizon, which worry Google's open network would undermine their businesses.
Google's 12-person Washington team, based in temporary quarters on Pennsylvania Avenue, has aggressively confronted the legions of lobbyists behind the two telecom behemoths. Its goal of creating an open-access network, first thought of as a long-shot proposal, has gained substantial political traction among FCC commissioners and Democratic lawmakers, who see the auction as the last opportunity to create a new competitor in the wireless industry.
"Google sees network owners as potentially coming between it and its customers, so they realized how critical Washington was to their long-term game plan," said Paul Gallant, a telecom policy analyst with Stanford Group Co. "Google is still nowhere near the Bells and cable [television] when it comes to lobbying, but it does have a real cachet that can make up some of the gap."
Google has not always been taken seriously in Washington. When co-founder Sergey Brin visited Capitol Hill two years ago, he had trouble persuading members of Congress to meet with him. The company didn't bother to open an office in the District until 2005, when it hired Alan B. Davidson, formerly of the Center for Democracy and Technology, to tackle Internet policy issues. A year later, Google hired Robert Boorstin, who held several positions in the Clinton administration.
When the debate over the ability of Internet service providers to favor certain Web content for a fee, a concept known as network neutrality, heated up last summer, Google was late to the scene. It initially depended on public interest groups to lobby on its behalf.
Since then, Google has expanded its Washington presence. Besides increasing its effort to sell its services to government agencies, Google has taken what it calls a "Googley" approach to politics by seeking the business of political campaign managers and starting a public policy blog. Last week, the online video site YouTube, which is owned by Google, sponsored a debate between the Democratic presidential candidates.