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Google, AT&T Square Off Over Wireless Broadband

Clash of the Titans

By Martin H. Bosworth
ConsumerAffairs.com

July 23, 2007 

Google has promised to front $4.6 billion dollars to bid in the upcoming FCC wireless spectrum auction, if the FCC agrees to commit to principles supporting open access and connectivity for all Americans, regardless of what device they use.

It may be the first time a U.S. company has put its money where its mouth is and actually supported open markets instead of just pretending to do so.

"Guaranteeing open services and open networks would ensure that entrepreneurs starting new networks and services will have a fair shot at success, in turn giving consumers a wider choice of broadband providers," wrote Google's Chris Sacca on the company's public policy blog. "This is one of the best opportunities we will have to bring the Internet to all Americans. Let's seize that opportunity."

Google's move prompted a furious rebuke from AT&T, which also plans to be a major bidder in the auction.

AT&T senior executive vice-president Jim Cicconi, in a statement to technology blog GigaOm, said that "Google is demanding the government stack the deck in its favor, limit competing bids, and effectively force wireless carriers to alter their business models to Google’s liking."

AT&T has a long and storied history, of course. It was AT&T that, for years, prohibited consumers from connecting such outlandish devices as fax machines to its circuits. It defines consumer choice as consumers doing as AT&T chooses.

Google telecom counsel Richard Whitt said that its move was specifically designed to facilitate consumer choice and greater competition through creating a true third-party broadband platform.

"[Incumbent] carriers, quite rationally, seek to extend and protect their legacy business models, and in particular not take any actions that would jeopardize existing and future revenue streams," he wrote in the filing. "For this reason, the appropriate public policy stance is not simply to facilitate an additional spectrum-based broadband platform, but rather to facilitate independent broadband platforms."

Network Neutrality

The FCC auction has prompted renewed sparring between telecom companies and grassroots advocates over the principle of "net neutrality."

Supporters of net neutrality, such as the "Save The Internet" coalition, want the spectrum opened up to enable new companies to create a wireless broadband network, while the telecoms were expected to outbid other contenders and hoard the spectrum for their own offerings.

Consumers who like having to get their cell phones from Verizon, AT&T or Sprint will love having AT&T control how, when or at what cost they tap into the wireless broadband network.

FCC chairman Kevin Martin, a staunch supporter of telecom interests and apparent foe of net neutrality, surprised many players by seeming to endorse a version of the "open access" principle. But analysis by experts such as Media Access Project's Harold Feld found that Martin's proposal seemed chiefly designed to satisfy the demand to make changes without actually making any changes.

"On a practical level, the proposed 'fix' really doesn't do much," he wrote. "Certainly it does absolutely zero for creating a 'third pipe.' But even taken on its surface as just addressing the restrictions on edge devices in the wireless world, it doesn't help."

AT&T and Verizon have threatened to withdraw from the auction if open access was mandated, leaving the government unable to raise enough cash from the sale of the spectrum.

But Google's move has shaken up the competition and made the auction a watershed in America's broadband development. In the words of OpenLeft's Matt Stoller, "AT&T said to Google, put up or shut up. And Google just put up."

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