Is Google the real winner in the FCC auction?

Finally, the most anticipated FCC auction for 700 MHz wireless spectrum is over. Verizon and AT&T have acquired a substantial number of licenses. As I promised in my last post, I have to tell you what this means to Google.

First things first. We all know Google is clever. When people went wild with their speculations about the auction, Eric Schmidt would have probably smirked. The reason being – Google probably never intended to win the auction. In fact, even before the auction, it got what it wanted.

The open access theory was formulated by Google and FCC made it clear that the winner of the spectrum should allow their users to choose any handset they want and run any application they want on their mobile phones. In other words, even if Verizon or any other company wins the auction, they will not be able to make their subscribers use a particular mobile phone with a particular application. This leaves a gap large enough for Google to bring in its Android supported devices. Clever, isn’t it?

As we already discussed, the costs involved in running a network are huge and Google never actually intended to do that. Instead, it will make money, irrespective of who wins the auction, through mobile advertising.

Now, at the end of the auction, Google actually didn’t win any license. But instead, it made Verizon and AT&T pay big bucks for the licenses. Now, Google will be happy to introduce its Android based mobile phones with tons of applications, which people will be happy to use. So, without spending big bucks for licenses in the auction, Google will be able to make money – through advertising.

Now, is that brilliant or what?

Categories: Cell Phone Advertising, Google, All things mobile phones.

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FCC auction for wireless spectrum

I know a lot has been said about the FCC auction for wireless spectrum. I know some of you might be wondering why make such a big fuss about an auction. Government auctions are a dime a dozen, after all; so why so much of importance is being given to this particular auction? That’s your question; right? Well; here comes the answer.

First of all, it’s not an ordinary auction, to say the least. FCC auction for wireless spectrum is perhaps one of the biggest in terms revenue and the outcome of the auction could change the entire landscape (or should I say airscape?) of the wireless industry. The auction is likely to fetch a whopping $15 billion for the Federal Government and this alone has made so much of news in the market.

What’s up with the wireless spectrum anyway? You ask me? Well; imagine wireless spectrum as a congregation of roads. The FCC will decide who gets to use which road for transportation. Now imagine, you’d obviously love to get the biggest and the most accessible road of them all; wouldn’t you? Similarly; in the wireless spectrum, specific frequencies are allocated for specific purposes like TV, radio, cellphone, and other wireless services. In the FCC auction that we’re talking about, the frequency for cellphone operation will be auctioned. As you probably know, cellphone advertising and marketing is considered a huge industry and has the potential to rake in revenue like anything. So, if you are a carrier or a handset market, you’d love to have that huge pie of the wireless spectrum which will put you in an enviable position in the market; right? This is why the auction is being given so much of importance.

The auction is scheduled on January 24 and expectations are sky high right now. Some of the names which will take part in the auction include Google, Verizon, Vermont Telephone Company, AT&T, Guam Cellular & Paging, and hell; even an oil company, Chevron is taking part in the auction. Now can you imagine this auction’s importance? Also, FCC has strictly mentioned that it’s going to be an open access system, whereas the customer gets to choose the network and the handset he wants to use. Earlier, it was not the case - if you wanted to switch to another network, you had to change your mobile too, as different carriers supported different mobiles. With the open access system, it will no more be the case, as the customer will be able to choose the service provider and the handset he wants at his own discretion.

So, for all these reasons, the FCC auction for wireless spectrum is considered huge. It’s less than a month away and already the speculations are running wild. I have my wager on Google; what about you?

Categories: Google.

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