Google wins by losing wireless auction to Verizon

The search company saves the wireless Internet for its apps, but it doesn't have to actually run a network.

By Farhad Manjoo
Published March 21, 2008 5:46PM (EDT)

The Federal Communications Commission announced yesterday that Verizon and AT&T won the largest slices of wireless spectrum put up for sale in a government auction. The spectrum is radio-frequency space that TV broadcasters will no longer be using; wireless companies hope to offer improved phone and mobile Internet services on that space.

There's no real surprise here: Everyone expected that entrenched telecom giants would get that space, and they did. But their path to domination was not an easy one, and it wasn't achieved without major concessions. In particular, Verizon will be forced to open the network to devices and programs of its customers' choosing. You can thank Google for that outcome.

Last summer, the search company lobbied the FCC to mandate that a large part of the spectrum -- referred to as the C-block -- be sold with "open access" provisions attached. Google argued that the winner of the spectrum should follow a few basic network rules -- among others, Google wanted customers who use the lines to be free to use any devices and run any software on those devices. (Currently, wireless companies block certain devices and applications arbitrarily.)

Verizon and other phone companies countered that if the spectrum was sold with access rules, telecom firms would pay less for it, and thus the feds would make less on the auction.

Google answered that challenge artfully: If the government adopted openness rules, the company promised to bid at least $4.6 billion for the radio space, thereby increasing the auction's take.

Last summer, the FCC mandated some of Google's proposed rules. When the auction began a few weeks ago, Google, as promised, put down its $4.6 billion. But Verizon, despite its protestations that open access rules would limit the spectrum's attractiveness, bid beyond Google. Apparently the company was OK with customer-friendly spectrum.

Notice here how Google's lobbying paid off for everyone: Verizon gets the airwaves it wanted. Google gets access to Verizon's customers, who will now be allowed to run the search company's apps on their phones. And we? Right, we get the freedom to do what we want on the wireless Internet. Thanks, Google.

Farhad Manjoo

Farhad Manjoo is a Salon staff writer and the author of True Enough: Learning to Live in a Post-Fact Society.

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