Friday, July 20, 2007

Our commitment to open broadband platforms

(Cross-posted at the Official Google Blog)

For several years now, many Googlers have been working to identify the obstacles that prevent the Internet from being available to everyone on the planet. It strikes us as unfair that some people should enjoy such abundant access to this rich resource while billions of others aren't so lucky. Though the technology exists today to provide access on a global scale, often we have learned technology isn't the problem. In this context, we have worked hard to advance a set of principles that will make Internet access for all a priority.

For instance, we wrote last week on our Public Policy Blog about Google's interest in promoting competition in the broadband market here in the U.S., to help ensure that as many Americans as possible can access the Internet. However, it takes more than just ideas and rhetoric if you want to help bring the Internet to everyone.

So today, we're putting consumers' interests first, and putting our money where our principles are -- to the tune of $4.6 billion. Let me explain.

In the U.S., wireless spectrum for mobile phones and data is controlled by a small group of companies, leaving consumers with very few service providers from which to choose. With that in mind, last week, as the federal government prepares for what is arguably its most significant auction of wireless spectrum in history, we urged the Federal Communications Commission (FCC) to adopt rules to make sure that regardless of who wins the spectrum at auction, consumers' interests are the top priority. Specifically, we encouraged the FCC to require the adoption of four types of "open" platforms as part of the auction:
  • Open applications: consumers should be able to download and utilize any software applications, content, or services they desire;
  • Open devices: consumers should be able to utilize their handheld communications device with whatever wireless network they prefer;
  • Open services: third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
  • Open networks: third parties (like Internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee's wireless network.
As numerous public interest organizations noted earlier this week, all four of these conditions adopted together would promote a spirit of openness, and could spur additional forms of competition from web-based entities, such as software applications providers, content providers, handset makers, and ISPs. The big winners? Consumers. As choices increase, prices come down and more Americans have access to the Net.

The FCC is currently considering draft rules for the auction, and the reports we've heard are that those rules include some -- but not all four -- of the openness conditions that we and consumer groups support. While any embrace of open platforms is welcome, only if the FCC adopts all four principles will we see the genuinely competitive marketplace that Americans deserve. In particular, guaranteeing open services and open networks would ensure that entrepreneurs starting new networks and services will have a fair shot at success, in turn giving consumers a wider choice of broadband providers.

There are some who have claimed that embracing these principles and putting American consumers first might somehow devalue this spectrum. As much as we don't believe this to be the case, actions speak louder than words. That's why our CEO Eric Schmidt today sent a letter to FCC Chairman Kevin Martin, saying that, should the FCC adopt all four license conditions requested above, Google intends to commit at least $4.6 billion to bidding for spectrum in the upcoming 700 Mhz auction.

Why $4.6 billion? While we think that a robust and competitive auction based on these four principles will likely produce much higher bids, and we are eager to see a diverse set of bidders competing, $4.6 billion is the reserve price that FCC has proposed for the auction. With any concerns about revenue to the U.S. Treasury being satisfied, we hope the FCC can return its attention to adopting openness principles for the benefit of consumers.

In the meantime, thank you to those who have reached out to help with our efforts. It feels good to see how many of you support true competition for the benefit of consumers and we look forward to hearing from even more of you in the days to come.

For now, and for all of us, the issue is simple: this is one of the best opportunities we will have to bring the Internet to all Americans. Let's seize that opportunity.


Glen said...

I commend the effort and the commitment. However, does this not assume there is connectivity in the first place ?

One significant difficulty facing a large percentage of the United States (based on geographic measure) is the lack of high speed internet and low return on investment for providing it.

How do you suggest we address this fundamental issue ?

Tom Coseven said...

I guess this raises two questions:

1) Verizon's often repeated question... "Why doesn't Google just bid until they win and then set whatever terms they want?"

2) Assuming Google wins the bid and is forced to wholesale the spectrum... What stops Verizon, AT&T, Comcast, TWC and the other incumbants from buying all the spectrum at resell? In other words, don't you need to restrict who is allowed to buy at resell to ensure new entrants?

Drywall said...

Wow. Way to refute the argument that spectrum with "open" strings attached isn't valuable; this pretty much depp-sixes the incumbents' arguments if I'm not mistaken. That's what I call putting your money where your mouth is.

Bill said...

Is Google becoming a mobile phone company? I have a vision of everyone walking around with handsets that only have wifi cards in them and using Google talk to speak for free. A Google TelCo could be rad!

Darnell Clayton said...

We need more competition in the ISP industry!

What enrages me about most internet companies is the fact that they treat their customers like garbage!

I don't get it! We are (after all) their bread and butter!

What makes me really upset is the fact that whenever you do find a great internet company, they can not help you out (and you're stuck with a company with horrible customer service!).

If Google does enter the field, hopefully they can make it better for everyone. At least I'm hoping.

Lorimer said...

This Google decision is not surprising as this is simply aligned to the company's mission "to organize the world's information and make it more universally accessible and useful".

It seems no price is too high -- even at a whopping $4.6 billion -- for Google for them to never lose sight of their goal.

I'm all leaving the future of the Web to Google.

David said...

If you do win the spectrum @ auction, what sort of relationship do you plan on having with wireless device manufacturers? How about protocols? Are you planning on setting up a network?


dclist said...

Of course this doesn't really make the spectrum 'open'. Individuals still cannot effectively use, what really belongs to the commons, like air or light, to communicate with one another. And freedom of communication is a necessity for a free society.

Google's proposal would be better than what we have now, but that is just the lesser of two evils.

True 'libre' use of the spectrum by anyone is what is necessary for not only a real free market but also freedom itself.

Francis said...

This is a great message and might seem to be aligned with consumers' interests, but realize that it's very superficial. It's no secret that more people/devices on the web = more revenue for Google, regardless of who's controlling the pipes. That's not to say that Google should stay out of this. Quite the contrary - my interests as a consumer encourage Google's efforts, but let's not get carried away with how we applaud them.

Serge said...

Seems to me that unbundling and wholesale are two conditions that allowed broadband to explode in Europe (UK and France namely), whereas here, where there are no such obligations, we are stuck with a crummy duopoly.
You absolutely need open services (wholesale) and it probably should be "at cost". Then you will truly have competition, based on the ability of a provider to differentiate itself appropriately (see Ash Rust's point: budget access with minimum service - high end service with tailored service)

Mark said...

Good luck. You're gonna need it... considering the anti-consumerist trend in Washington.

Michael Zimmer said...

Just wondering -- to compliment Google's fight for open broadband platforms -- if Google is also committed to fighting obesity.

It seems one of your employees thinks fat people shouldn't be trusted....


steve said...

If this happens it should ignite services and devices -- perhaps the US will come out of the mobile dark ages.

It would be interesting to calculate the value of a closed walled garden vs more open networks to consumers and businesses as a whole - rather than just the carriers.

Sebastian Lewis said...

Hi, I saw this and decided to email the FCC Chairman. Here's a copy and paste of the email I sent:

I just caught a news story about how you said that Google's bid and requested rules for open access may discourage AT&T and Verizon from building out a network. The comments I read can be found here.

My trouble is this, neither AT&T nor Verizon have done much to build out a data network at a reasonable cost that I would actually like to use, together they have managed to create a mess of a mobile network market with the 2 incompatible technologies known as CDMA/EVDO (Verizon) and GSM (AT&T).

Google has proposed 4 rules (Open applications, Open devices, Open services, and Open networks) designed to make consumer's lives easier by both promoting competition (even if that means Google has to enter the auction themselves) and they have set their price at the reserve price the (you) the FCC has proposed meaning the FCC will at minimum meet it's reserve price request, and likely a higher price once the auction itself is over and the bids are done and consumers will be happy because of it and our broadband market might actually be competitive for once instead of overpriced and obnoxious.

If you recall, it was AT&T who told Google to put their money where their mouth is, and since Google is a Fortune 500 company worth billions they actually did, if their proposed rules are adopted. Whether or not Verizon or AT&T wins this auction or not, they will both continue to build out their networks, AT&T working on a UMTS network and Verizon focusing on both EVDO and FiOS, the only difference is that they will have some real competition, and you're worried they will be discouraged? It's a multi-billion dollar business and winning the auction only makes it easier for them, but they will still continue to try and build their competitive networks whether or not they bid at all!

If you adopt Google's proposed rules, not only will AT&T and Verizon probably bid anyways (the 700 Mhz spectrum from what I understand would be very very valuable) but they will be forced to adopt the rules set by the auction before hand and that can ONLY be better for the consumer, otherwise if you rig the auction so only AT&T and Verizon are interested then what's the point at all of even having the auction? I thought the auction rules were supposed to make it better for end users, not the service provider.


I encourage others to do the same and his email can be found here.


Shant said...

I agree for Google, action speaks louder than the words. It is remarkable what they have managed to create. I am sure if they deliberate on creating these open wireless platforms they will create huge value and again show the path to the world.

Graham said...

Hi, we have plenty of competition over here in the UK. But for Google to push into telecoms would do us all a favour.Good blog, well worth your hard work.Graham -

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