700 MHz auction OVER, Google or Verizon the winner?

March 19, 2008 |

700 MHz auction OVER, Google or Verizon the winner?

By Matt Jansen

Today the FCC announced $19.592 billion dollar deal at the close of auction 73, the 700 MHz spectrum. That sum of money is more than the FCC has earned in the last 15 years combined ($19.1 billion). Google and Verizon are thought to be the top bidders.

“The $19.592 billion generated by the auction nearly doubled congressional estimates of $10.2 billion. All other 68 auctions conducted by the FCC in the past 15 years collectively generated a total of only $19.1 billion in receipts,” according to the FCC (pdf).

The fiercest competition took place between heavyweights Verizon and Google, and both companies could accomplish a lot with control over those airwaves. The biggest difference in approach between the two companies is Google’s support of open airwaves and Verizon’s more closed approach.

Verizon’s stance:

Verizon’s position is that the Federal Communications Commission should not impose ‘open access’ conditions on the 700 MHz spectrum. The record compiled at the FCC does not justify these conditions. Imposing any such requirements in the competitive wireless market would reduce the revenue the government will receive from the spectrum auction and limit the introduction of new and innovative wireless services.

Google’s stance:

- Open applications: Consumers should be able to download and utilize any software applications, content, or services they desire;
- Open devices: Consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;
- Open services: Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
- Open networks: Third parties (like internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee’s wireless network.

Both companies are fighting to create the most angelic picture of themselves, but where will the money raised in the auction go?

The FCC writes “the proceeds generated from this auction will be transferred to the U.S. Treasury by June 30, 2008, and will be used to support public safety and digital television transition (DTV) initiatives.”

And regardless of which company won the bid, the FCC also believes that “the next generation of wireless networks to be deployed in the 700 MHz Band will be
faster than those available today, and they will extend to both urban and rural areas of the country. Wireless broadband will be able to reach unserved areas of the country, and it will bring increased competition to the broadband sector that is currently dominated by DSL and cable providers.”