August 2, 2007

Duopoly, Meet Google-opoly

By Jim Barthold

The FCC's decision this week to require anybody who wins the upcoming 700 MHz spectrum auction to open their networks to interoperable devices and applications shows how powerful Google has become in what once was a closed space of ever-diminishing telephone and cable companies.

Google wanted four things - wholesale and open access were the other two - and hit .500, which would be All Star material for any baseball player. For a telecommunications rookie, batting for the first time against big league opponents like Verizon, it was an auspicious - some would say ominous - start.

"Google is rapidly becoming what I call a Google-opoly," said Scott Cleland, chairman of NetCompetition.org and founder and president of Precursor and an unabashed Google critic. "Google dominates the wireline space. They have 65 percent share in the U.S.; in Germany and Spain, they have 90 percent; in the U.K. they have 75."

Now Google, which is already working with Sprint Nextel's mobile WiMAX play, which is running in 2.5 GHz wireless spectrum, wants to control the 700 MHz wireless space, Cleland insisted.

"Google (which offered to bid $4.6 billion for the spectrum if its four conditions were met) is basically telling the government you should set the market up to favor us," he said.

What's cable's play?

It's a hot issue, and it will only get hotter as the January 2008 spectrum auction approaches, with cable's part still to be determined.

"One of the big issues looming out there is what exactly is the legal status of broadband Internet access carried over a cable system," said Rick Whitt, Google's Washington telecom and media counsel, who pointed to the vague nature of broadband principles adopted by the FCC in 2005.

"It's not clear what force they have when applied to a cable company. It's also not clear whether they are enforceable," he said. "FCC officials have admitted that those principles are merely principles and that if an ordinary consumer found that an application was being blocked by a cable company, they had no recourse; they couldn't file a complaint, they couldn't seek redress at the FCC."

Google, of course, would like this clarified and wants "Congress to step in and indicate precisely what obligations apply, including in the case of no-blocking applications," Whitt said.

Considering what went down this week with the FCC, don't bet against Google.

- Jim Barthold