Info Tech & Telecom News (Heartland Institute), July 1, 2008

Leading Web search provider Google has filed a petition with the Federal Communications Commission (FCC) to deny communications services provider Verizon the C-block spectrum it won at auction unless Verizon provides assurances it will comply with Google's interpretation of open access provisions.

The petition, filed May 2, cited Verizon's "two door" policy--whereby different rules for device applications may apply to different devices using the C-block spectrum--as evidence Verizon may not intend to abide by the provisions Google had lobbied to be included as requirements for the spectrum sale. Verizon says its policy is intended to afford the company full control of its own devices while preserving open access for non-Verizon ones.

Google contends Verizon may not exclude its own devices from the open access provisions.

Google Manipulated Auction

In auctioning off the coveted C-block spectrum, FCC agreed to mandate two of four Google-requested open access provisions if bidding reached a $4.6 billion reserve price. Google has stated its purpose in participating in the auction was to trigger those provisions, not to win the auction.

A statement on the Official Google Blog, issued after the auction's close, said, "Google's top priority heading into the auction was to make sure that bidding on the so-called 'C Block' reached the $4.6 billion reserve price."

Analysts Differ

Daniel Ballon, Ph.D. of the Pacific Research Institute in San Francisco, California, said, "Google's petition is really underhanded." He said he believes Google's intent is to force its forthcoming Android operating system and proprietary applications to be made available on every mobile device--hence the desire to ensure open access on Verizon's devices.

Robert X. Cringely, an IT writer and author of several books on Silicon Valley, supports Google's action. He said, "This is not some Google conspiracy; it is using the rules to best advantage. ... The FCC should make Verizon comply with rules it voluntarily agreed to follow."

Cringely believes FCC acquiescence to Google's petition will help ensure a free market in devices and applications utilizing the C-block spectrum.

Eli M. Noam, director of the Columbia Institute of Tele-Information and a professor at Columbia Business School in New York City, sees a paradox in requesting FCC intervention to enforce a market's existence. "It is ironic that the open [access] system is expected to be free from any regulatory intervention, but companies like Google are dependent on FCC's intervention for such a system," he noted.

Possible Loophole

New York Times technology blogger Saul Hansell notes the open access provisions contain a loophole: They provide no guidance or regulation on pricing.

Verizon typically subsidizes the purchase of a customer's cellular phone by $150 or more. Even if Google's petition is granted and Verizon provides the requested guarantees, Hansell wrote on the Times technology blog, "the government mandate for openness ... does not impose any particular rules about how Verizon will have to set the price plans for equipment it doesn't provide."

Krishna Kishor Kammaje (krishna.kammaje@yahoo.com) writes from Bangalore, India.