Researching Google's attempt to buy into wireless via the 700 MHz Spectrum Auction.
1. Why did Google make this move? What do they hope to accomplish?
A: In the year 2008, Federal Communication Commission (FCC) auctioned 700 MHz spectrum. This spectrum was being vacated as TV broadcasters moved from analog to digital communications. Factors that influenced Googles participation in spectrum auction and what did they hope to accomplish are exaplined below.
First of all, Google want to enter into Wireless to capture the profits and revenues of the wireless networking market. This move allows Google to create new products and competencies in wireless network environment and become competitor to market giants like AT&T, Verizon Wireless market is ruled by four top multibilioneire companies like AT&T,Verizon, Sprint and T-Mobile.Their operating revenues and market capital will pove that wireless networking is very profitable.
Charts were Prepared by Spandana.
• This 700 MHz spectrum propagates further and propagates signals better, allowing operators to cover more area with less equipment.This spectrum will offer more advantages to wireless networking.
• The FCC auctioned total 1099 wireless licenses in the 700 MHz spectrum, but the most attractive spectrum to all bidders was the C block of 12 regional licenses which may be combined to create a 50 state nationwide network.For ny wireless company to have this nationwide network will be more profitable than others.
• As FCC accepted, the Googles idea of “Open access” with wireless networking and one of Google’s top policy priorities is spurring the availability and uptake of affordable, open broadband Internet service, it will be accomplished by open acess. This creats more customers for Google’s Youtube platform and increase in revenues by ads from youtube.(In the year 2006, Google acquired youtube for $ 1.65 billions)
• Part of the reason, Google into wireless was to encourage its citywide WI-Fi project (i.e. to spread broadband network to rural areas), which allow all customers to access more of its internet applications like You tube, search engine etc.
2. How does Google's support for Open Access fit into Google's plans?
A: The FCC's auction of 700-MHz spectrum generated a total $19.6 billion, making it the most successful auction of U.S. spectrum ever. Google also made a bid of $4.6 billions but it didn’t win any licenses. But google has been already a winner in forcing the FCC to set aside part of the 700-MHz wireless spectrum for open network access as part of an auction. FCC accepts two of the four conditions in open access asked by google and they 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 a handheld communications device with whatever wireless network they prefer.
Open access plans are to deregulate the control of telecom operators to give consumers...