Google vs. the Telcos - a Timeline
written by Eric HernaezJuly 30th, 2007
Tomorrow, July 31, the FCC will vote on the bidding rules to be employed for the upcoming 700Mhz wireless frequency auction. The outcome is of paramount importance to the future of the Internet in the United States. At issue is whether the bidding rules will be designed to thwart the monopolistic tendencies of established phone companies. To the dismay of Internet aficionados everywhere, the telcos’ combined capital and lobbying power seems hard to beat. At least in my opinion, an outcome that does not work to their benefit is extremely unlikely.
Even so, the fact that the debate has made its way into the public consciousness to the extent that it has will do much to loosen their choke hold on wireless airways. The telcos are able to maintain a wireless walled garden only because we, as consumers, allow them to. Once consumers understand how much better a “mobile Internet” could be, market demand will cause carrier intransigence to fall by the wayside.
Whichever way the FCC vote goes, the culmination of this epic struggle is worthy of some appreciation. Fought in headlines and blogs, these firms have staged a public relations battle royale par excellence. Like charging elephants or attacking killer whales, one can’t help but be enthralled by the sheer magnitude of the feints and parries.
Thus, in honor of the final curtain, I have assembled a timeline to better assist fellow observers follow the plot of this larger-than-life spectacle. Note: it’s still a bit rough, but check back as I intend to refine it over the next days.
October 2005 - Google goes to Washington DC “to defend the Internet as a free and open platform for information, communication and innovation.” With the current incarnations of Verizon and AT&T spending over $50 Million to lobby Congress in 2006 how could they afford not to be there? Why did they wait so long?
January 2006 - Ed Whitacre, AT&T’s Chairman and CEO, kicks the Net Neutrality debate into high gear by suggesting that content providers should be paying extra to reach AT&T’s last mile customers.
January 2007 - In an effort to quell anti-competitive fears spurred by the Net Neutrality debate, the proposed acquisition of AT&T by BellSouth contains unprecedented (for a telco at least) language acknowledging the benefits of a “neutral” Internet.
May 2007 - Open Internet Coalition formed by group of 54 Internet companies, including Google, Ebay and Earthlink, sends an open letter to U.S. Congress in favor of Network Neutrality principles.
June 20, 2007 - FCC Commissioner Jonathan Adelstein goes on the record in favor of open access.
July 9, 2007 - Google submits an ex parte filing to the FCC 700Mhz proceeding. In it, Google urges the FCC to adopt four rules to make sure that regardless of who wins the spectrum at auction, consumers’ interests are the top priority. The rules are:
- 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.
July 19, 2007 - In an interview with USA Today, FCC chief Kevin Martin proposes to implement “limited open access” that is substantially less than what Google has proposed (basically incorporating open devices and open applications) . Citing a paper by Columbia’s Tim Wu, Martin’s proposal follows in the footsteps of the FCC’s previous Carterfone decision (Carterfone was a ruling that allowed consumers to connect any type of telephone to the PSTN). Some pundits cast this as a success for the “Google block,” despite the lack of support for the important open services provision. Other’s cite Martin’s close ties to the telcos and question his motives.
July 20, 2007 - Verizon issues a press release warning that adoption of Google’s proposed rules will reduce the incentives for other players to bid and decrease the proceed to be earned by the U.S. government from the auction.
July 20, 2007 - Surprise, surprise… AT&T endorses Martin’s limited open access plan as a “creative compromise.” Did anyone really believe that they hadn’t traded notes beforehand?
July 20, 2007 - Ostensibly in response to Verizon’s press release, Google pledges to bid at least $4.6 Billion. CEO Schmidt’s billion-dollar guarantee is meant to erase the telco talking point that open access conditions would short the U.S. treasury billions of dollars in auction revenue — as no company would be willing to bid on spectrum that’s been tied to such requirements.
July 23, 2007 - Google announce investment in femptocell vendor Ubiquisys. This is interesting because femptocell technology offers a partial end-around the wireless networks, letting consumers access online services from a GSM phone, using existing broadband (DSL and Cable) connections.
July 25, 2007 - Martin publicly opposes open access as envisioned by Google. He also says that if the reserve price for the auction ($4.6 Billion for 1/3 of the available frequencies) is not met for the “Google Block,” - and if Google doesn’t enter the auction, it very well may not be met - he will remove the restrictions for open access and try again.
July 26, 2007 - Surprise, surprise surprise… Verizon agrees with Martin. In an 11th hour shift from its position of the previous week, Verizon said it will back Martin’s limited open access plan. Verizon making a concession? Hardly! By now, it’s crystal clear that Martin’s limited open access proposal was a calculated mechanism to allow the telcos room to appear to compromise.
July 26, 2007 - Google announces partnership with Sprint/Clearwire to offer optimized Google services to users on the the jointly-built Wimax network. Sprint/Clearwire appears to be positioning its new network as an open access alternative to the 700Mhz hoo-hah, and goes so far as announcing an API that will allow software developers to create new wireless applications.