Google doesn’t want to be a telco, analyst says

Despite Google‘s entry into the bidding fray for wireless spectrum in the U.S., don’t expect the search and advertising giant to get into the carrier business in a big way, a Canadian analyst says.

And don’t expect them to come bidding when Canada’s wireless spectrum goes up for auction next summer.

“They have the wrong passport,” says Iain Grant, principal with SeaBoard Group. And while he jokes that he does have the right paperwork and would be willing to partner with Google 50-50, he doesn’t think the company aims to be a carrier anyway. The fact that Google has one of the largest reservoirs of dark fibre and a huge block of IPv6 addresses has led to speculation that the company is positioning itslef as an alternative wireless carrier.

“I don’t think Google is doing this because they really want to own a network,” Grant says. Rather, Google wants to shape the discussion of net neutrality — not with respect to censorship and freedom of speech, but to what Grant calls “net equity.”

Order a book from Amazon, and a courier or postal service gets paid to deliver it. Download digital content, though, and carriers shoulder the cost of delivery. With carriers “crying the blues” every time Google comes up with a bandwidth-hogging application, owning some spectrum gives Google some leverage.

“If (Google has) got spectrum … maybe AT&T and Verizon will make nicer,” Grant says.

(For its part, a Google spokesperson e-mailed Network World Canada assistant editor Howard Solomon to say that “We are not currently planning on participating in the upcoming Canadian spectrum auction.”)

IT World Canada blogs

Does Google want to be a wireless carrier? Dave Webb thinks so. Read more — and comment — here.

Google intends to bid on wireless spectrum in the 700MHz band when the U.S. Federal Communications Commission begins auctioning that resource in late January.

Google has previously expressed interest in the spectrum, which is being made available as U.S. television stations move to all-digital broadcasts by February 2009. Earlier this year, Google joined consumer and public-interest groups in calling for the FCC to impose open-access rules on part of the 62MHz of spectrum to be auctioned. In July, the FCC voted to require open-access rules, which would require the winning bidder to allow outside devices and applications on the network.

“We believe it’s important to put our money where our principles are,” Eric Schmidt, Google’s chairman and CEO, said in a statement. “Consumers deserve more competition and innovation than they have in today’s wireless world. No matter which bidder ultimately prevails, the real winners of this auction are American consumers who likely will see more choices than ever before in how they access the Internet.”

Google’s recently acquired interest in wireless spectrum has led it in several directions. The company launched the Open Handset Alliance, an open-development platform for mobile phones, earlier this month.

Google has also supported efforts to push Congress to pass net neutrality requirements, which would prohibit broadband providers from blocking or slowing Web content not approved by them. Google’s interest in the spectrum came after AT&T and other large broadband providers expressed interest in recent years in getting Web-based businesses to pay more for their customers’ use of the broadband networks.

Google’s application will not include any partners.

In July, Google promised the FCC that it would bid at least US$4.6 billion for a block of spectrum. The FCC later set a reserve price of $4.6 billion on the so-called C Block of spectrum, the 22MHz block where the commission required open access. If the reserve price isn’t met, the FCC would re-auction the spectrum, presumably without the open-access rules.

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Jim Love, Chief Content Officer, IT World Canada

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