Does Google Want It All?Friday, October 26, 2007
In an Ex Parte filing with the FCC dated October 23, Google acknowledges that it recently met with the FCC’s Public Safety and Homeland Security Bureau and asked a number of questions about the D block of shared spectrum.
What does this mean? What if Google wants it all? What if it concedes the A and B blocks of 700-MHz spectrum to incumbent network operators but goes after both the C and D blocks and wins the 12 licenses for the C block and the 1 license for the D block? Now, instead of 22 MHz of spectrum, which is not enough for millions of customers, Google would have 22 MHz plus 10 MHz (D block—secondary access) and secondary access to the 12 MHz of spectrum held by the public safety community. The total would be 42 MHz of spectrum, which is enough to build a truly robust network that could, indeed, handle millions and millions of customers.
Now suppose there were other partners, perhaps Apple and Intel? This then could become a play for WiMAX that would put WiMAX on the map, certainly in the United States and perhaps around the world. Would the first responder community go along with a WiMAX play instead of LTE (the next-generation technology from the GSM world) or UMB (the next-generation technology from the CDMA world)? I suspect that with all the hype still surrounding WiMAX, they could probably persuade the PSST to go along with the WiMAX technology choice, although I think that would not be the best choice. There would be millions of potential devices, and Google could set this up as a truly open network, perhaps with the caveat that all customers who want access to the Internet go through Google.com.
They could permit resellers of the spectrum, lots of “open access” devices and access to any site on the Internet. In reality, the spectrum shared with the first responder community, at any time other than during major incidents, will probably be 75-80% available to the commercial entity that builds out the network. This would make quite a network, and it would help cover rural America with wireless broadband.
A network like this would be expensive, but it could certainly be built out quickly in most areas using existing cell sites. It would take longer in some parts of the nation, but since what I envision is a joint venture approach to the network, each section could be built out by one of the partners or a master contractor could undertake the entire project.
I believe WiMAX would be a bad choice for this network and would rather see LTE or UMB, but I suspect that the partnering process would include companies such as Intel that are heavily invested in WiMAX. Today, WiMAX is a TDD-only technology, but by the time this spectrum is actually available in most areas, the WiMAX Forum claims it will have an FDD version available and ready to deploy. It would make more sense to me to stick with one of the major commercial next-generation technologies such as LTE or UMB. In this scenario, LTE would probably be the logical choice because it is backward-compatible with GSM and UMTS/HSPA. The best choice for the greatest number of devices would be to make use of one of the next-generation GSM or CDMA technologies, which would permit worldwide roaming as well.
Why does it matter? Because then you could sell devices that not only would work on this network but would be capable of being used on existing networks for voice and perhaps even other data services. If you then add data-casting capabilities and mobile TV using the Qualcomm MediaFLO network, which is a one-way network with a lot of data capacity, we would have a single nationwide network that would be attractive to most wireless customers today. You could manage your broadband services because if you needed to send huge amounts of data you could move the delivery of that data to the one-way portion of the network, thus enabling even more customers, and you would be offering voice (probably as an MVNO) from one of the existing network operators.
Does Google have a master plan like this in the works? Only Google knows for sure and I am betting that we won’t hear anything from Google prior to the bidding. It could certainly afford to bid enough for both spectrum blocks to win them, incorporate some of its technology such as Google Earth into the first responder side of the combined network and probably take on the incumbents—especially since the revenue model would probably be an advertising supported model or a hybrid traditional subscription model with advertising to make it cheaper for heavy-use customers.
This scenario could be put together, with or without partners for Google, and with or without WiMAX playing a part. But there might be one more piece to this puzzle that would prove to be even more interesting. Founded by Nextel founder Morgan O’Brien, Cyren Call is under contract to work on behalf of the Public Safety Spectrum Trust, a non-profit organization established to be the license holder for the public/private shared spectrum.
Cyren Call will be (or is) meeting with potential bidders, outlining the public safety community’s requirements or perceived requirements and will play an important role in managing the relationship between the commercial network operator and the public safety community. What if Cyren Call were also a part of Google’s strategy to win the spectrum? Could Morgan O’Brien end up serving both the commercial and first responder community because of a relationship with Google? Morgan has said publically, prior to the new rules, that his goal was to help first responders and also build and operate a new, nationwide network. He did it once, is this a way for him to gain access to spectrum and not pay for it?
The other potential partner is Frontline Wireless, the company formed after Cyren Call that proposed the spectrum allocations that most closely resemble what ended up in the FCC’s Report and Order. Frontline has been fairly quiet in recent weeks but there are rumors concerning its attempts to raise money to bid in the auction. There are also a number of other possible combinations and partners that might make sense for Google, and perhaps other scenarios that could be considered, but until the auction (or at least the filing deadline), we won’t know how many of these are in play. We do know that Steve Balmer, Microsoft’s CEO, said at CTIA’s Wireless I.T. & Entertainment that Microsoft won’t be bidding because it wants to work with all of the network operators, not compete with them.
I still believe Google does not want to build out a network itself, but it does want unfettered access to it. Interesting things to think about here. But again, until the bidders sit down at the table, we won’t know for sure! I could be way off base here, but in this auction for beachfront spectrum, anything goes!