Google says that unless the FCC sets certain rules on the auction, existing large mobile operators will inevitably win the spectrum and competition in the market will stagnate. In order to prevent that, Google is urging the commission to ensure that end users can download any applications, services or content they want. Consumers should also be able to buy a phone and use it on any network. In addition, Google says the winner of the spectrum should be required to allow third parties to resell services over the network on a wholesale basis.
Some other groups, such as Frontline Wireless LLC, a company backed by luminaries including former FCC chief Reed Hundt and former Netscape CEO James Barksdale, have proposals similar to Google's.
AT&T argues that a draft proposal issued by FCC Chairman Kevin Martin allows Google to implement all the capabilities it wants, but the proposal just doesn't mandate them. "If our understandings are accurate, we believe Chairman Martin has struck an interesting and creative balance between the competing interests debating the Google Plan," Cicconi said in a statement released on Thursday. "The plan would enable the introduction of an alternative wireless business model without requiring changes in the business models of AT&T and others in what is a highly competitive wireless industry."
The proposal would allow Google to bid on the spectrum and test the model, AT&T said. If Google doesn't accept the proposals, it's a sign that the search giant's objective was "to use the government to stack the deck and force competitive wireless companies to abandon their chosen business models and instead adopt Google's model," he said.
Google has argued that unless spectrum winners are required to sell access to their networks on a wholesale basis, existing operators with deep pockets will win the licenses and be unlikely to offer wholesale access to their networks in an effort to thwart new competition.
While Google has been vocally urging the FCC to ensure that the spectrum can be used by any device and service, the company has until now hedged on questions about whether or not it plans to bid for the spectrum.
The FCC auction for 700-MHz spectrum is expected to happen next year. The frequencies are considered prime for mobile communications because signals sent through them can travel far and can penetrate walls better than higher frequencies. Much of the similar spectrum is already spoken for so this auction is considered a rare opportunity.
In a perhaps related announcement, on Friday U.K. femtocell maker Ubiquisys Ltd. said that Google has invested in the company. Femtocells are small base stations that can be used in homes or offices to improve mobile phone coverage. Ubiquisys' current products operate over 3G (third generation) networks.