Space Ramblings

Open access wins. Wholesale reselling loses

The U.S. Federal Communications Commission moved cautiously toward creating a more open national wireless broadband network, handing a partial victory to Google, which has pushed for more competition in cellphone services.

The agency approved rules Tuesday for an auction of broadcast spectrum that its chairman, Kevin Martin, said would promote new consumer services. The rules will let customers use any phone and software they want on networks using about one-third of the spectrum to be auctioned.

The commission did not approve a provision that would have required the winner of the auction to sell access to its network on a wholesale basis to other companies. Google favored the rule as a way to hasten competition and innovation in the cellphone industry, a market it is eyeing.

Open access wins. Wholesale reselling loses. Good all around because open access has the potential to do for cell phones what the end of the bell monopoly did for landlines, letting you just buy a phone at Wallmart and plug it in, instead of going nuts chasing cell phone plans. Wholesale reselling by contrast was always dubious and was Google’s pet project. Considering that Google wasn’t willing to go higher than 5 billion, it didn’t have much credibility in trying to set these parameters in the first place.

Public interest groups and Silicon Valley technologists said they were disappointed with the ruling. Public interest groups said the $4.6 billion minimum auction price set by the commission might discourage bidders. The rules say that if the reserve auction price is not met, the open access provisions adopted by the commission will be dropped in later bidding.

So at this point all the big telecoms like Verizon have to do is stay out of the bidding and see open access dropped. But of course Google has been toying with a 4.6 billion bid. But toying is the right word and with wholesale reselling still unmet, there’s no real reason to think Google will pony up if it doesn’t have to. Because Google is still too busy playing around with all its options to really commit to anything.

Meanwhile the big telecoms would actually have to be pretty certain of clear sailing in order to stay out of the opening round and that’s far from certain with AT&T likely to accept open access thus frustrating any Verizon led boycott. So the game goes on.

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