Google Phone

If there’s one thing the FCC auction has shown us, it’s that Google is pretty sneaky when it comes to getting their own way. They set their sights on open-access - which would mean devices running Android, even if not officially picked up by any of the carriers, would be able to access the new 700MHz networks set to roll out in 2009 - and persuaded the FCC to add the provisos in on the understanding that Google would take responsibility to push Block C over its reserve.

Of course, we now know that Google was a minor player in the auctions and came away with nothing; Verizon stumped up the cash for Block C, Google gets its open-access, and the FCC goes scampering to the bank. Now the search giant is back, apparently set to deliver a proposal to the FCC for “white space” access: that’s the unsold spectrum in-between the digital TV channels. As you might expect, Google see both portable and fixed broadband devices, running Android, and compatible with both white space and Verizon’s Block C.

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The FCC has confirmed the winning bidders [pdf link] in their recently closed 700MHz spectrum auction, with Verizon Wireless taking the majority of the coveted Block C while AT&T picked up 227 licences from Block B. The auction, which raised $19.592bn in total, concerns parts of the wireless spectrum that will be freed up once analogue TV is turned off and broadcasters switch to digital, starting in 2009. Verizon spent $4.75bn on Block C and a total of $9.63bn in the auction overall; AT&T is believed to have spent around $6.64bn in all. Google, who were strong proponents for the “open access” provisos the FCC later built into the Block C contract, apparently made a “serious bid” according to the FCC, but in the end won none of the licences.

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Verizon Wireless may be making all the right noises to get into the open-access club, but what exactly do they need to do in order to back up all those promises?  Michael Megalli is certainly not willing to let the carrier off the hook; in a three step plan, he’s laid out the vital evolution that must take place if their “new” business model is to be taken seriously.

“Unlike the days of the network evening news, today’s market is only what it says it is. Part of being open is being willing to give over control. This is as true for marketing as it is for anything else. Give people as much (or as little) choice as they want and let them create their own value props” Michael Megalli, MediaPost

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In a move almost certain to be a calculated response to Verizon’s sudden bursting open of their CDMA network, AT&T has decided to begin publicising the fact that customers can use any GSM handset they wish with the company’s services, rather than needing to buy a vouchsafed model from AT&T’s range.  That should go some way to excusing the carrier’s absence from Google’s OHA; while Android is not directly supported, handsets built on the platform should have no problems accessing AT&T’s service as long as they adhere to the GSM standard.  It’s rather a case of making existing options better known than introducing new features; AT&T has had such an open-access policy for several years, but preferred to keep it quiet so as to encourage new customers to buy cellphones from them rather than reuse their old model.

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With the deadline for 700MHz auction “intent to bid” applications being close of business yesterday, a tentative shortlist of potential spenders is being drawn up.  According to the FCC’s auction rules companies are under no obligation to disclose their intent publicly (indeed some potential players have cited the Commission’s own confidentiality policy in declining to answer) but that hasn’t stopped analysts from having their say.  Currently, Google, AT&T, Cox Communications and Frontline Wireless are all believed to have submitted applications, the latter confirming with CNET that they were part of a consortium that includes ex-Netscape CEO Jim Barksdale and Kleiner Perkins venture-capitalist John Doerr, while the former did so last week.  Neither AT&T nor Cox would comment.

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Perhaps we should’ve seen it coming, but the news that Verizon Wireless is - in sentiment if not in certificate - signing up to the Open Handset Alliance still registers as something of a surprise.  The carrier, which hinted at its open-access intentions earlier this month by announcing that it would allow non-Verizon-designed devices to use its network from 2008 (and was, from some quarters at least, roundly criticised for “paying lip-service” to the newly fashionable concept), has gone one further and called Android “an enabler of what we do.”

CEO Lowell McAdam broke the news that, what was previously the most closed of the US operators, would now use Android with a rejoinder to sceptics that open-access has been brewing at Verizon for the past twelve months.  He cites his experience at European and Asian networks, and the positive effect he saw of customers being able to move devices in-between companies, as a primary reason for pushing for the relaxed boundaries.  Devices will still need to satisfy initial checks but the onus for compatibility will be left with manufacturers and developers rather than Verizon itself; similarly, the customer service remit will change from the in-depth support offered for users of the network’s core range to handset or application providers.

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In a move many are suggesting is a response to Android and Google’s push for open-access on cellular networks, Verizon Wireless announced that they would be opening up to any device or software that “meets the minimum technical standards”.  While traditionally Verizon - and other telcos - have been protective about their network, customising devices carefully so as to prevent unauthorised use or modification, from early next year a set of technical standards will be released so as to guide the development community.  At the same time, CDMA devices (either newly created or brought over from rival network Sprint) will be activated on the Verizon Wireless network.

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Scant seconds after the rumor breaks that Google will be announcing their gPhone OS and application suite within two weeks, comes the suggestion that talks with mobile operators in the US are in far more advanced stages than previously believed.  Key, indeed, is the revelation - as usual, by “people familiar with the matter” - that both Verizon and Sprint are close to formulating a deal with Google for gPhone-powered handsets to utilise their networks.

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If the whole FCC auction malarkey has got you confused, then thankfully more analysts are stepping in to lay out exactly what might be on offer for existing carriers, potential new carriers and customers alike.  And while normally the correct name for a group of analysts is “a gobshite” for once they’re actually helping push through some clarity.  One thing’s for sure, Google’s preliminary toe-dip into cellular waters - and their ostentatious $4.6bn credit card waving - has got plenty of people talking.

So what do we know already?  Well, if you want to get pantomime about it, there are the “good guys” and the “bad guys”; Google, Frontline Wireless and others would like to think they sit firmly in the former camp, while existing carriers such as AT&T and Verizon lament in the latter.  Google would have you believe that a new paradigm of wireless usage is at stake, breaking down so-called “open access” into four interconnected chunks.

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Nothing frustrates me more than comments such as the one below, written by an editor of PCMag.com, where fear of change has seemingly overtaken the desire for fresh thinking:

The company seems least prepared to work in the mobile service space. Verizon, AT&T, and even Google’s new partner, Sprint, are not exactly industry darlings or customer favorites, but they know this business and, even if motivated purely by greed, are bound to build a better network than Google. Perhaps they would use it to enhance the mobile devices we already have. I don’t see Google doing any of that. In fact, Google’s history of throwing out a free, beta product isn’t yielding the same kind of results it did a few years ago, and I’d hesitate to let the company take a similar approach to wireless.

Breaking this down, Ulanoff appears to be saying that Google doesn’t know what they are doing and are unlikely to push forward or create new products and services; in other words, they wouldn’t make the best use of the 700 MHz. Moreover, he would rather see the “beach front” property go to Verizon, AT&T or Sprint simply because they’re stalwarts in the industry and despite the fact that they are “motivated purely by greed” — and yes, by the way, they are “bound” to build a better network than Google. My bullshit meter is flying off the scale; let me try to explain why. First of all, let me say this again, what Google doesn’t know now, they’ll buy out whole companies or recruit the best minds in the business to figure out. And secondly, should the 700 MHz spectrum go to Verizon or AT&T, they’ll squat on it for years to come to protect their existing infrastructure. Finally, unless Ulanoff knows something that we all don’t regarding Google’s “master plan”, or he can predict the future, his overall stance seems pretty sweeping when the little Google has revealed about its intentions is mightily inconclusive.

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