Google to FCC: Accept Our Rules and We'll Bid

In its clearest statement of intent so far, Google Inc. said that it will compete in an upcoming wireless spectrum auction, if the government agrees to certain rules.

On Friday, Google sent a letter to the U.S. Federal Communications Commission chairman informing him that the company will commit a minimum of US$4.6 billion toward the auction, but only if certain conditions are met. Google spelled out those conditions in an earlier filing with the FCC.

The billion-dollar commitment could assure the FCC that if it does implement the conditions, it can expect to raise the amount of money it hopes to. "The odds are still against the FCC imposing the conditions Google seeks, but this significantly ups the ante," said Kevin Werbach, an assistant professor of legal studies at the Wharton School of the University of Pennsylvania and former counsel for new technology policy with the FCC.

Google's proposals are controversial for existing mobile operators, which could decide not to participate in the auction if the rules don't suit them, resulting in potentially less income to the government. On Thursday, Verizon Wireless said that complying with Google's ideas would amount to corporate welfare and bad public policy.

The $4.6 billion amount appears to be the figure that Google believes the FCC will require as a minimum price for the spectrum. In its letter to the FCC, Google wrote that it understood that a draft order from the commission had specified that figure. The FCC typically sets a minimum price to sell spectrum; if the minimum isn't met, the agency can cancel the auction.

"We're putting consumers' interests first and putting our money where our principles are -- to the tune of $4.6 billion," Chris Sacca, head of special initiatives at Google, wrote on the company's public policy blog.

AT&T Inc. interprets the move a bit differently. "Google is demanding the government stack the deck in its favor, limit competing bids, and effectively force wireless carriers to alter their business models to Google's liking," Jim Cicconi, AT&T senior executive vice president of external and legislative affairs, said in a statement on Friday. "We would repeat that Google should put up or shut up -- they can bid and enter the wireless market with any business model they prefer, then let consumers decide which model they like best."

The CTIA, an association representing mobile operators, had an equally harsh response to Google's move. "Google's letter to the FCC this morning highlights the Internet giant's scheme to have the 700 MHz auction rigged with special conditions in its favor," CTIA President and CEO Steve Largent said in a statement. "Google and its allies, with their collective market capitalization approaching half a trillion dollars, don't need a government handout at taxpayers' expense." The wireless industry welcomes new entrants into the business but companies shouldn't ask the government to custom-fit regulations to match their business plans, he said.

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