Verizon Wireless, a division of Verizon Communications (VZ), was unhappy with the way things were turning out for the 700 MHz auction and as such has decided to use the legal system to try and block the open-access provisions that were tacked onto the hotly debated auction by the Federal Communications Commission.
Verizon called the rules “arbitrary and capricious, unsupported by substantial evidence and otherwise contrary to law.” The legal action can be roughly translated into this: Verizon thinks it can outbid even Google, win the auction and basically lock out all open-access backers. Nice block-and-tackle move by a veteran of the Beltway who knows how to really work the system. Google (GOOG) isn’t thrilled about it, and has posted a fiery response on its Policy Blog.
Google was all set to bid for the spectrum:
The nation’s spectrum airwaves are not the birthright of any one company. They are a unique and valuable public resource that belong to all Americans. The FCC’s auction rules are designed to allow U.S. consumers — for the first time — to use their handsets with any network they desire, and download and use the lawful software applications of their choice.
I have not been a fan of the FCC plan either, but not because I don’t like more wireless broadband options. As I wrote earlier, “The lack of mandated wholesale access on this network makes it a non-starter from competitive perspective.”
Anyway, let’s see what Verizon comes back with in response to Google’s comments.
10 thoughts on “Verizon Sues, Google Expresses Dismay Over 700 MHz Auction”
Om, you are one confusing guy “…a non-starter from competitive perspective.” What with talk of Google, Apple and maybe an Intel/Sprint bid, this could be one of the most competitive auctions ever. Name another auction anywhere in the world with this level of interest from non-telecom companies.
If google wins the auction, what assurances are there that they wouldn’t do no evil. they can or can not provide wholesale access, which is an issue for others.
Does anyone know the length of term for the auctioned off spectrum? I assume the winning bidder does not have lifetime access to the spectrum. Can they only use it for a year before having to come back and win another auction?
Why is Verizon suing here? I mean, they stated they thought the signals will “leak” over to other bands. Last time I checked that was against the law and punishable by massive fines.
The company I want to win is any who will provide broadband internet with the spectrum. I want to see this powerful wall penetrating signal used to give us some damn good speeds. The sheer amount of bandwidth freed up by getting rid of the analog channels will give us wonderful speed.
You can get something like six HD channels in the same bandwdith as a single analog channel. Its been a few years since I’ve taken the wireless class in college, so the exact number escapes me. Still, multiple higher quality channels in the same spectrum as a single analog; just think of converting that to data.
As for those speculating that this spectrum will be used for telephony; I do not see that happening. This space is too valuable to put pure voice on it. If anything whomever purchases the spectrum real estate will use it for data and lay some voice on top. That is if they want telephony at all.
Under the current rules, Google will do what’s best for Google, as long as they allow open devices and applications. Even though Google has talked a lot about a wholesale requirement, I would be very surprised If Google would voluntarily implement wholesale, because it is inefficient and Google cares about margins above all else. If you are making the argument that maximizing margins by limiting customer choice is evil, then Google is already evil (and Apple is the most evil of all technology companies).
As long as you meet the build-out criteria you get the spectrum for life. The government can try and take it away eventually, but they’d have to compensate you and you could sue and drag the whole thing out for a very long time. For perspective, AT&T and Verizon still have 800 MHz spectrum they bought over 20 years ago.
The spectrum rights don’t last forever, or it would never have been auctioned in the first place, since existing companies held the rights to 700MHz for decades prior to the Federal Deficit Reduction Act that put the analog TV band up for re-sale.