April 6, 2008

US Telecom Industry- Spectrum Auction 2008: Google prevails, US Treasury wins

A recent article from MIT discusses the repercussions of the recent US telecom spectrum auction, and informs us of “What the FCC's Auction Means”.

It appears that Google Inc. is very satisfied with the results of the auction, as its participation in the process ensured open-access conditions for the winning bids.

“Google came away empty handed, but the company succeeded in pushing open-access conditions for the winning bids. These conditions, which affect the part of the spectrum that Verizon now owns, require that the frequencies be accessible to devices and networks from other companies--a requirement that could result in innovative new mobile phones and services, says David Reed, professor at MIT's Media Lab.”

Google Inc. ensured this result by participating vociferously in the process, and by bidding-up the price along the way. Ultimately, Google Inc. did not “win” a license to any piece of the spectrum, but it wins what is most important, without having to fork-over billions of dollars to the US Treasury.

Speaking of the US Treasury, it walks away as perhaps the biggest winner in the entire process. The FCC, on behalf of the US Treasury, re-assigned what we currently know as Channel’s 60-67 (in the 700 megahertz band) to Telecom industry.

For its part in re-assigning this part of the aether, the US Treasury picks up a cool $19.6 billion dollars. The hand-over of the spectrum takes place in February of 2009, and should serve to spur innovation in the industry as a whole.

Google Inc., for one, has already been rumored to have a “G-phone” in the works. You can say that you heard it here first, when they launch into the Telecom space next year. Considering the competitive weapons that Google Inc. has at its disposal:

- A large Gmail user-base
- Google Earth
- Google search
- Adsense & Adwords
- A huge private IP network
- Cloud-computing expertise

It is perhaps only logical then, that the mobile industry would be next.

I, for one, won’t be surprised when Google Inc. launches an IP-based, Adsense supported, communication device in the near-future. Think Skype meets IPhone meets Adsense meets Blackberry. If Google Inc. isn’t thinking in this direction, they need to inquire after my services pronto.

Either way, consumers should be the greatest benefactors.


No comments: