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The Federal Communications Commission will lay down the ground rules for the auction of the 700 megahertz wireless spectrum tomorrow, determine whether next generation wireless services will be controlled by an existing telco monopoly, an existing cable monopoly or a diversity of new network operators.
Should the FCC agree to the open-access requirements proposed by Google and others, we may see all manner of innovations in technology, pricing and quality come 2009. We’ll also undoubtedly see Google become even more ubiquitous as it leverages open access to extend its presence to handheld devices, etc. Should it toss them, we’ll still see innovations, but they’ll more than likely be ones that strengthen the existing business models of the incumbent telecom carriers. Carriers like Verizon, which have been mobilizing their artillery, rhetorical and otherwise, to destroy what Mary Brown, Cisco’s director of technology and spectrum policy, has helpfully ID’d as a misguided attempt to base regulation on the “worries of a $158 billion behemoth.”
“Google is attempting to ensure the FCC that the federal government can get a minimum price without a competitive bidding process,” Tom Tauke, Verizon’s executive vice president of public affairs, policy and communications, said earlier this month. “Google, of course, would get the spectrum at a bargain-basement price. The bottom line is this: Without Google’s rules, the government will get literally billions more for this valuable spectrum, and the taxpayers will be the winners. The integrity of the auction is critical to ensuring that the taxpayers and consumers receive the maximum benefit from this important public asset. And the best way to foster integrity is to encourage a diverse and competitive universe of bidders–a goal undermined by the Google plan.”
Exactly–if, by “a diverse and competitive universe of bidders,” you mean a coterie of major incumbents. Because according to the New America Foundation’s examination of the FCC’s 2006 Advanced Wireless Services auction, the incumbents have a real penchant for messing up the bidding efforts of upstart network operators. “The auction rules in the FCC’s 2006 Advanced Wireless Services Auction were manipulated to exclude new entrants to the marketplace from obtaining spectrum in favor of incumbent cable companies, wireless operators and telephone companies, which feared the competition those new entrants represented,” the study concludes. “… The targeted new entrants were met with a tacitly collusive strategy of blocking bidding, with coalitions of multiple major incumbents making bids for the apparent purpose of denying licenses to the new entrant rather than acquiring the licenses for themselves.”