Thursday, April 3, 2008
Cone of silence (finally) lifts on the spectrum auction
For three weeks at the end of January and early February, a small team of us holed up in double super secret "war rooms" in Mountain View, CA and Washington, D.C. to bid on Google's behalf in the FCC spectrum auction. Bidding took place electronically, and literally billions of dollars were at stake with every mouse click. And because of the FCC's strict anti-collusion rules, we couldn't tell a soul what was going on behind closed doors.
But now that the FCC's rules have lifted, we can. As you probably know by now, Google didn't pick up any spectrum licenses in the auction. Nonetheless, partly as a result of our bidding, consumers soon should have new freedom to get the most out of their mobile phones and other wireless devices.
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 that would trigger the important "open applications" and "open handsets" license conditions. We were also prepared to gain the nationwide C Block licenses at a price somewhat higher than the reserve price; in fact, for many days during the early course of the auction, we were the high bidder. But it was clear, then and now, that Verizon Wireless ultimately was motivated to bid higher (and had far more financial incentive to gain the licenses).
You may remember that as the FCC was setting rules for the auction last summer, we urged the Commission to adopt four openness conditions. Further, we vowed to bid at least $4.6 billion in the auction if the Commission adopted all four rules. Even though the FCC ultimately agreed to only two of the conditions, which nullified our original pledge, we still believed it was important to demonstrate through action our commitment to a more open wireless world.
We're glad that we did. Based on the way that the bidding played out, our participation in the auction helped ensure that the C Block met the reserve price. In fact, in ten of the bidding rounds we actually raised our own bid -- even though no one was bidding against us -- to ensure aggressive bidding on the C Block. In turn, that helped increase the revenues raised for the U.S. Treasury, while making sure that the openness conditions would be applied to the ultimate licensee.
The end of the auction certainly doesn't mark the end of our efforts toward greater wireless choice and innovation. We will weigh in at the FCC as it sets implementation rules for the C Block, and determines how to move forward with a D Block re-auction. Android is already off to a successful start, and we are likely to see handsets later this year based on the Android platform. We will continue advocating for the FCC to open up the vacant "white spaces" in the TV spectrum band for mobile broadband uses. And as more policymakers and regulators around the world evaluate their own spectrum policies, we'll continue pushing to help make the wireless world look much more like the open platform of the Internet.
What did you think about how the auction turned out?