Owning the premier search site or becoming the single biggest media player in the still-emerging online advertising industry is one thing; becoming a telecommunications provider, aka, a phone company, is another.
If Google enters the bidding for the 700MHz spectrum, it "[has] not ruled in or out participating in the auction as a licensee," said Richard Whitt, Washington, D.C. telecom and media counsel for Google, as reported by IDG News Service's Nancy Gohring. If Google enters and wins the auction, it could turn out badly for everybody, including Google.
Gohring reports that Google has requested the FCC to rule on whether or not it can buy the spectrum and then resell the right to use it at auction.
"On Monday, Google filed a letter with the FCC asking the agency to allow winners of the spectrum to create an auction system that would let third parties bid against each other for the right to use the spectrum," she writes. "The system could be much like AdWords, Google's offering that lets companies bid against each other in order to display online advertising tied to search terms."
This is in direct opposition, to SpectrumCo, the consortium between Comcast, Time Warner, Cox, Advance-Newhouse, and Sprint Nextel.
According to the Telecom Law Blog, "This group recently filed an ex parte letter and white paper in the FCC’s 700 MHz auction rules proceeding advocating the importance of a mix of license sizes (both in terms of service area and in spectrum amount) for the upcoming 700 MHz auction."
The blog further discusses why this is important, pointing out, "SpectrumCo argues that larger spectrum block and service area license plans are inefficient and may encourage spectrum warehousing, while smaller geographic and spectrum allocations facilitate increased auction participation and competition, enhanced rural coverage and ultimately create higher auction revenues," for the government.
So the Google petition talks about an auction that would let third parties bid against each other "for the right to use the spectrum." Nothing about reselling the spectrum, but setting up an auction, most likely among advertisers like AdWords to use the spectrum that Google, if their scenario works out, still owns.
What will that do to the wireless airwaves? Will we be flooded with ads on our cell phones and other wireless devices? How else will these third parties get a return on their investment after they pay Google?
It all sounds very suspect to me.
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