Despite what you may read, Google and other internet companies didn’t really get everything they wanted from the US spectrum auction that just ended - in fact, in many ways the status quo remains exactly what it was.
The auction “winners” were announced today (that word is in inverted commas because only time will tell whether they got a good deal or overpaid.) Google shareholders were at least able to breathe a sigh of relief that it was Verizon Wireless, not the search company, that had paid $4.74bn for the all-important C Block of spectrum. That is the block that the FCC, after cajoling by Google, subjected to “open access” provisions.
So Google will get the benefit of an open national network and greater broadband competition without paying a cent?
Not really. Google’s preferred outcome all along was for this rare auction of national spectrum to give rise to a new national competitor in the US broadband market - someone to help bring down prices and make sure there is enough competition to keep the “pipes” open. With Verizon and AT&T dominating the auction proceedings, the outcome looks very much like business as usual.
Nor is it at all clear what the open accees provisions will actually mean in practice. Verizon held an event in New York earlier this week to lay out its plans for letting any device onto its network, provided certain safeguards are met. In theory, this means consumers will be able to buy a handset incorporating Google’s new Android software, then go independently to Verizon and ask to connect to the network.
Yet Verizon said nothing at all this week about how much it would cost to do this (last time I spoke to CEO Lowell McAdam about that, he said these customers were likely to be charged based on the amount of bandwidth they use – not something most people will jump at.) Also, anyone going this route would miss out on the hefty operator-funded handset subsidies that US consumers have been taught to expect.
The US wireless market may indeed be opening up, but it will be a slow process.
