Wednesday, October 3, 2007

Pro-consumer spectrum auction rules at risk at the FCC?



When the FCC in late July voted to adopt its spectrum band plan and license conditions for the upcoming 700 MHz auction, it was natural to assume that was the end of the regulatory story. To the contrary, it seems that a "final" vote by a federal government agency is merely the beginning of a new phase in the process.

Just three weeks ago, Verizon filed a lawsuit against the FCC, seeking to overturn the FCC's attempt to bring Internet-style consumer choice via the 700 MHz auction. In a recent court filing, the company has also threatened to have next January's auction itself halted unless the consumer choice provisions are eliminated. Now come various news reports suggesting that Verizon is lobbying behind the scenes (and in apparent violation of FCC rules) to once again convince the FCC to water down key aspects of the pro-consumer rule provisions.

As far as we can tell, Verizon appears to be arguing that two of the key provisions in the auction rules designed to spur competition -- the requirements for open devices and open applications -- should not apply to a licensee's own devices that use this block of 700 MHz spectrum. Their theory is that so long as "unlocked" devices (those that can be configured to work with any network) are theoretically available to consumers through other means, the winning bidder in the auction shouldn't be required to make its devices open as well.

From our perspective, this view ignores the realities of the U.S. wireless market, where some 95 percent of handsets are sold in retail stores run by the large carriers. More to the point, it is simply contrary to what the FCC's new rules actually say. Specifically, Rule 27.16(b) states that licensees

“shall not deny, limit, or restrict the ability of their customers to use the devices and applications of their choice…”

Similarly, the “handset locking prohibited rule” states explicitly that

“no licensee may disable features on handsets it provides to customers….”

Needless to say, any attempt to change the reading of this rules language would seriously undermine the promise of consumers seeking more choices of wireless providers and services. Earlier this week, we sent a letter to the FCC urging the agency to resist this late-proposed rule change.

We are still carefully analyzing whether and how we might participate in the upcoming auction. However, if we do end up bidding and ultimately win the spectrum in question, we would ensure that consumers have the right to decide which devices and applications they want to use on our network. We would also encourage third party software applications -- even those that compete directly with our own services -- on the theory that users deserve the right to pick and choose the programs they want to use online.

We think the Internet offers the optimal model for what best serves the interests of all consumers. To that end, we hope the FCC sticks to its guns as it tries to introduce the open ethos of the 'Net to a small segment of the closed wireless world.

17 comments:

Charbax said...

Please come and buy the 700mhz WiMax band in Denmark, and deploy it cheaply using the FON flowerbox model.

John said...

Would it be ideal if the citizens of this country emailed Mr. Martin as a way to show their preference in these matters?

Chris Weber said...

Does this mean that Google would not extend the other 2 kinds of openness that they lobbied for and did not win?

Josh said...

PLEASE just buy the spectrum!! I'll switch in a heartbeat!!! even tho I like my carrier( not verizon i hate those greedy ... for trying to take away my choices as a consumer)

Eric said...

Down with Verizon! Google PLEASE buy the spectrum. Open is the way to go!

Frank said...

I applaud Google for its actions here; I think it's clearly on the right side of this issue. But the positions it's taking in other cases may be in tension with its stance here; see, e.g.,:

http://www.concurringopinions.com/archives/
2007/09/google_is_not_a.html

brokensambot said...

I hope Google has true intentions to buy this spectrum and aren't simply acting the part to spur competition among the others. We need someone like Google to step up to the plate and end the wireless monopoly. Ma Bell is back together, Verizon is worse then ever. Save us Google ;)

F said...

Google consistently has ignored patriotic American holidays such as Memorial Day and Veteran's Day, but today it acknowledged an accomplishment of the communist Soviet Union, which launched the Sputnik space satellite 50 years ago.

The Internet giant, known for its widely used search engine, regularly modifies its logo to commemorate holidays, historical events and figures.

But as WND reported, for the ninth year in a row, Google declined to mark Memorial Day – something the company has done for the Chinese New Year, Valentine's Day, Halloween and other observances.

Eric said...

I will pay a LOT of money just to have Google as my cell phone carrier. I love your products and think you are perfect for this task! Please buy the ENTIRE spectrum.

Darnell Clayton said...

Go, Google! Go!

Apple sold its i-Soul
To AT&T!

Verizon is trying
To imprison me

Baby Bells are forming
A monopoly

Can Google make the net
A democracy?

Go Google! Go!
Go Google! Go!

Verizon giving grief
To the FCC

Apple locking users
To AT&T

Nobody seems to care
For users like me

But here then comes Google
To set us all free!

Go Google! Go!
Go Google! Go!

If Google wins the bid
From phone companies

And opens up the net
For people like me

I'll get more choices, like
Ten, rather than three

Which could help bring about
Net Neutrality?

So go, Google! Go!
Yeah, go Google! Go!

Poem by Darnell Clayton, 2007

brad said...

GOOGLE-

Please buy the spectrum. Its our only hope for an open environment, while you are at it, please try and get congress to understand the importance of a National Broadband policy.

If congress wants economic growth and is at all interested in staying true to the entrepenurial spirit that made this country great, then we need better broadband.

UNLOCK COMMUNICATIONS..

Chris said...

Dominate google, the people that make you a giant need you.

Boyd R. Jones said...

Chris - good point. However, Google, you should be organizing US. Why don't you solicit our e-support a la moveon.org?

Or can we volunteer to do this for / with you?

Dextrone said...

Thanks google, VZ has a habit of locking down devices and getting rid of 90% of the features.

IS google trying to do that to get their apps on to verizion phones? It would be good either way.

Michael Robinson said...

"I hope Google has true intentions to buy this spectrum and aren't simply acting the part to spur competition among the others. We need someone like Google to step up to the plate and end the wireless monopoly. Ma Bell is back together, Verizon is worse then ever. Save us Google ;)"

Corporations are a delicate balance between what's right for investors, and what's right for customers. Google is one of those rare companies that seems to give priority to customers. What ever their true motive (whether it's some idealistic thing like "free access!", or forcing competition), Google convincing the FCC to keep the spectrum open would inevitably be beneficial for customers. :)

"Google consistently has ignored patriotic American holidays such as Memorial Day and Veteran's Day, but today it acknowledged an accomplishment of the communist Soviet Union, which launched the Sputnik space satellite 50 years ago."

Why do you have to make it a nationalistic issue? Google is celebrating the event that kickstarted the space race that gave us most of the tech we enjoy today. That's more important than any one country's holidays.

Francois said...

The Auction rules are now and the C block has a reserve of $4,637,854,000.

This is quite a chunk of change.

Does Google accepts donations on Paypal?

F.

Chad Bam said...

Tommorrow I'll have a multi-part series on Google's Mobile Strategy, which will include spectrum, the G-phone, and timeframses at

GaGaGooogle.com