Google unveils its plan to disrupt the mobile carrier industry
In a recent patent filing, Google disclosed its vision for a ‘flexible communication system’ that allows users to roam across networks. If implemented, this system could bring market forces to bear on wireless carriers and create a major disruption in the wireless carrier business.
The underlying concept of this plan is to allow users to roam across cellular networks based on availability and price. In fact, the carriers would constantly be bidding in an auction to determine the least expensive company to rout the data.
This plan follows Google’s model in AdSense of accelerating the effects of free market forces on traditionally closed industries by applying an auction system. By increasing how often the mobile service providers have to compete for users’ data to run over their network, it would help deflate the cost of wireless service.
This concept contrasts greatly with the traditional model of locking customers into a 2 year contract. While carriers like Verizon are starting to allow month-to-month contracts, the frequency of competition between carriers in that model assumes that customers wouldn’t change carriers multiple times per year let alone per day.
This plan sheds light on the underlying goal of Google’s bid for wireless spectrum last year and its efforts at lobbying to open up access to white space between the bands of spectrum for public use. While many assumed that Google was attempting to become a data-carrier of sorts, no one predicted the significance of the plan in disrupting the carrier market.
The ‘flexible communication system’ is meant to allow users to shift their calls and data across networks including wifi. This would mean not being charged for minutes while at home if you have an Internet connection. It also means that any data that travels across the carrier networks would likely be at a highly reduced rate.
This plan also shows part of Google’s overall strategy for the mobile industry that includes the Android operating system, which is being released first on the T-Mobile G1. As of yet, Android doesn’t have the capability to jump between 3G and wifi connections for calls, but we could start seeing VoIP applications that allow users to make calls when on either.
It’s unclear whether Google’s petition to free up spectrum whitespace is likely to be considered by the FCC or whether Google is planning to attempt implementing the ‘flexible communication system’ through other means. The one thing that it clear is Google’s ability to disrupt major industries using market forces and still come out on top.
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