Lately there has been a lot of news surrounding the upcoming bandwidth auction for the 700MHz wireless spectrum. Once TV stations go all digital, they will vacate these very valuable frequencies. The big wireless companies are eager to get their hands on it (because 700MHz goes through walls nicely), but some unlikely companies, namely Google, have also expressed an interest.
Google requested four conditions they think the FCC should place on the winner of the auction, and committed to bid at least $4.6 billion if those conditions are put in place. The conditions are: open applications, open devices, open wholesale services, and open network access. Basically, they wanted the FCC to ensure that whoever gets the spectrum is forced to provide an open playing field for everyone, much like the Internet is today.
Google's proposal is a good idea, and if it had been accepted, it would have fundamentally changed the way we think about wireless. Unfortunately, the big green monster reared it's ugly head, and the FCC missed the point.
After Google made it's proposal for open access, as did other groups, the big wireless companies quickly focused the debate on money. They argued that imposing such limitations would make the spectrum less valuable, and threatened that they wouldn't bid as much money for it. The question that the FCC should have asked is, "Less valuable to who?"
We, the people of the United States, own that spectrum. In fact, we own all of the spectrum that flies through the airspace of the USA. But giving everyone unfettered access to do whatever they like would make a big mess, so we created the FCC to manage it. The FCC issues licenses to those who wish to use it, maintaining order and structure. As such, those who should obtain the most value from the spectrum are the public -- NOT the wireless companies.
For years the big wireless companies have been licensing spectrum, then forcing customers to pay high rates for services that are slow or have poor coverage. They only allow their own devices on the network, and each device is locked down so you must use their software and their services. It's not good for innovation, and it's not good for the public.
This new spectrum has the potential to change all of that. We can look at the previous license agreements and see where they have gotten us. We need to try something different or we're going to get more of the same -- high prices and poor service. One only needs to look at the success of WiFi to see the value that open systems can provide.
Ultimately the FCC caved to the threats, and only adopted some of the open access rules suggested by Google. While still better than nothing, the rules still tip the playing field in favor of the big wireless corporations. So much for serving the public good.
In determining the value of the spectrum, the FCC is being short-sighted. They are focusing on a short-term potential loss of revenue from the auction, and ignoring the potential of a huge market that could be created with open access requirements. They have voted for "more of the same" instead of ushering in a new era of innovation in the wireless sector.
The FCC really missed the point here. This auction is one of the last bandwidth auctions in the foreseeable future, and it was the last chance to obtain open access for a long time. The threat that some extra rules on the auction might bring in a few less billion dollars, compared to the public interest for at least the next 20 years, should have been a non-issue.