Sun, Jul 22, 2007 - Page 11 News List

Google to bid for wireless airwaves if condition added

OPEN ACCESS Google said its proposal to allow winners to lease a certain portion of the airwaves to others would promote an open wireless market


Google Inc says it will bid at least US$4.6 billion for wireless airwaves being auctioned off by the federal government -- if certain conditions are met.

The Internet search company wants the US Federal Communications Commission (FCC) 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, or broadband, access via cable or telephone lines -- a third option for service. The so-called wholesale provision presents a huge business opportunity for Google, analysts said.

"Today, we have 200 plus million cellphones. If those are now all 200 plus million enabled broadband devices, what's the value of Google? It's significantly greater," said Blair Levin, an analyst at Stifel Nicolaus.

FCC Chairman Kevin Martin last week previewed draft rules for the auction that did not include the wholesale provision.

That's 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.

The wireless airwaves that will be auctioned lie on a particularly valuable band of spectrum. They can travel long distances and easily penetrate walls, ideal for high-speed Internet service.

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

In a letter to Martin, Google chief executive Eric Schmidt said the current auction terms fall 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," Schmidt wrote in the letter dated Friday.

Google's position puts it at odds with major telecom carriers such as Verizon Wireless and AT&T Inc, both viewed as potential bidders.

AT&T has said it favors the current auction draft rules; Verizon would not comment on its stance.

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.

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