Google bidding for spectrum – not entirely a blessing

Google is really trying hard to get its applications and services into mobile phones. But in the bargain it could be encroaching into every part of our Internet lives from its core business in search, to the Android operating system and applications on phones, to now owning spectrum for mobile telephony and data.

Google announced today that it will apply to participate in the Federal Communications Commission (FCC) upcoming auction of wireless spectrum in the 700 megahertz (MHz) band.

As part of the nationally mandated transition to digital television, the 700 MHz spectrum auction -- which begins January 24, 2008 -- will free up spectrum airwaves for more efficient wireless Internet service for consumers. Advocacy by public interest groups and Google earlier this year helped ensure that regardless of which bidders win a key portion of the spectrum up for auction (the so-called "C Block"), they will be required to allow their users to download any software application they want on their mobile device, and to use any mobile devices they would like on that wireless network, Google said. The winner must ensure these rights for consumers if the reserve price of $4.6 billion for the C Block is met at auction, it added.

Google’s moves in the last few months have been aimed to get its services into mobile phones, thus opening up a new advertising revenue stream for the company. Mobile operators however want to control what applications users download, because they are also beginning to see special services as large potential revenue streams, including from advertising. If Google wants to get into the phones of these mobile operators, it can only do so through generous revenue sharing deals with the operators.

The search giant has hence been pushing for opening up the networks, to further its business interests. The 700 MHz spectrum auction was an opportunity for Google and other groups to advocate to the FCC that at least this part of the spectrum should be kept open by bid winners.

Google has been at the same time pushing the open source Android platform for mobile devices, which will again support third-party applications, including Google’s. However the big players like Nokia are not backing this initiative. Having seen the control and commoditization of the PC platform by Intel and Microsoft, they don’t want something similar in the mobile phone market.

It is not clear at this point whether Google really plans to win the auction, or just meet the reserve price for the auction. Also not clear is whether Google, if it bids seriously and wins, will get into actual network operation. If it decides to do so, not only other service providers and mobile phone makers, but also users should be worried. Google will be playing in too many inter-related markets from mobile networks to mobile devices to applications such as search, giving it a lot of opportunity to control.

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Google builds its own virtual machine for Android

If Net Neutrality goes, the world may no longer be flat

Network neutrality has ensured so far that we are able to access any web site we want, at the same speed, whether it is a corporate web-site in the US, the site of an out-of-garage operation, or the web site of a vendor in India, Ghana, or anywhere in the world.

This neutrality ensured that the Internet was a great leveller. Besides giving a fillip to businesses selling into the US and other developed economies, including small operations like garment and handicraft makers, it also gave a fillip to blogging, because now we were communicating with anybody, anywhere in the world at little or no cost.

The world may however no longer be flat if new rules come into force in the US aiming to create a two-tier Internet. The Internet service providers (ISPs), who have invested in the big pipes that transfer Internet packets, plan to speed up or slow down Web content based on its source, ownership or destination.

If you want traffic to your site to be faster, you will have to pay the owners of the pipes for premium, high speed movement of data to and from your site. It also means that video and audio content providers that pay for this premium service, or services operated by the owners of the pipes, would have access to the faster lane, while merchants, bloggers, and various content providers who can’t afford the fast lane, will just have to putter along the slow lane.

Once again an opportunity to create an equal opportunity society may be missed. Not only will the digital divide in the US get excarcebated, but it will have global ramifications, between the “haves” and “have nots” among countries.

Economies like India, China, which tend to be US-centric in their markets, may find themselves perhaps slipping into the slow-lanes of network traffic, and consequently the slow-lane of business.

The removal of net neutrality will also make cable and telephone companies like AT&T and Time Warner the filters, the gatekeepers in the two-tier Internet economy, deciding which traffic will flow faster, and which won’t, based purely on considerations of profit. Free access and disemmination of information could be in jeopardy, as also probably consumer choice and the free market.

The battle is just beginning. Weighing in favor of the network operators, the US Department of Justice (DoJ) on Thursday said that “some regulatory proposals offered by various companies and organizations in the name of “net neutrality” could deter broadband Internet providers from upgrading and expanding their networks to reach more Americans.” The DoJ was responding to a US Federal Communications Commission (FCC) Notice of Inquiry regarding broadband practices.

The DoJ said in a statement that precluding broadband providers from charging content and application providers directly for faster or more reliable service could shift the entire burden of implementing costly network expansions and improvements onto consumers. If the average consumer is unwilling or unable to pay more for broadband Internet access, the result could be to reduce or delay critical network expansion and improvement.

The Internet has until now been about freedom of expression (blogs etc.), freedom of communication (email, instant messenger etc.), freedom to socialize (social networking sites), and freedom of choice (online commerce). That could fade away or get compromised going forward. We are all up against commercial realities, unless US lawmakers intervene. The party may be getting over.