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Google Proposes Innovation in Radio Spectrum Auction
The FCC: (L-R) Commissioners Kevin J. Martin, Kathleen Q. Abernathy, Michael K. Powell (Chairman), Michael J. Copps and Jonathan S, Adelstein.By JOHN MARKOFF
SAN FRANCISCO, May 21 — Google filed a proposal on Monday with the Federal Communications Commission calling on the agency to let companies allocate radio spectrum using the same kind of real-time auction that the search engine company now uses to sell advertisements.
Executives at Google, based in the Mountain View, Calif., said that the company had no plans to bid in the closely watched sale of a swath of broadcast spectrum scheduled for February 2009 as part of the nation’s transition to digital broadcast television.
The company, the world’s dominant search engine, has, however, become an active participant in the debate over the control of access to broadband digital networks because it wants to create more competition among digital network providers like cable companies and Internet service providers.
The Google filing comes two days before a deadline for public comments set in an F.C.C. rule-making procedure for the sale of spectrum in the 700 MHz band, now largely used by UHF television broadcasters.
The agency is planning to set the rules for its auction this year as potential bidders, including telephone, cable and satellite operators — as well as potential consortiums interested in creating new next-generation digital wireless networks — jockey for position. Several groups of bidders hope to use the spectrum to create a new nationwide digital wireless network that would serve as an alternative broadband channel to businesses and consumers, competing with existing telephone and cable providers.
“The driving reason we’re doing this is that there are not enough broadband options for consumers,” said Adam Kovacevich, a spokesman for Google’s policy office in Washington. “In general, it’s the belief of a lot of people in the company that spectrum is allocated in an inefficient manner.”
In their proposal, Google executives argue that by permitting companies to resell the airwaves in a real-time auction would make it possible to greatly improve spectrum use and simultaneously create a robust market for innovative digital services. For instance, a company could resell its spectrum on an as-needed basis to other providers, the executives said in their formal proposal to the federal agency.
F.C.C. auction methods used in the past have been criticized because they required advance payments, leaving companies with less money needed to build infrastructure, resulting in fewer benefits to consumers in the way of advanced telecommunications services.
“In Google’s view, many of these thorny problems would be alleviated by a more open and market-driven spectrum access policy,” they wrote.
The Google proposal will be endorsed this week by one of the consortiums that is planning to bid in the spectrum auction: Frontline Wireless, an investor group founded by Reed E. Hundt, a former F.C.C. commissioner, with a number of Silicon Valley venture capitalists including the Google investors L. John Doerr and Ram Shriram.
“I’m hoping we treat spectrum as a scarce renewable resource which should be used for the common good of the consumer and to make available the most innovative devices that can connect to those consumers,” Mr. Shriram said.
Mr. Hundt said in an e-mail message: “We propose that one quarter of the capacity of the network that uses this spectrum must be sold not in a long-term service contract but instead in ongoing open auctions to any and all comers.”
The proposal is for the wholesale auction of spectrum. However, in the future such a system might require that advanced computing technology be built into wireless handsets and computers to automate the auction bidding process and permit it to take place without users noticing. The Google proposal states that such a system would reduce retail prices for wireless spectrum and extend Internet access into rural areas not now served by existing providers.
One significant issue in the debate is whether the F.C.C. will be able to meet a mandate in the digital television law calling for reallocation of the frequencies to public safety organizations while simultaneously making spectrum available for commercial applications.
