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July 20, 2007

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Doug Lichtman

Randy -

Why do you think Google is willing to pay so much just to get open access? Your post implies that open access might be good for consumers. Maybe that's right, maybe not. But shouldn't we at least wonder what is in it for Google? I know that Google tries to sell itself as if it is just in the business of doing good things in the world, but we (current and former) Chicago guys tend to expect a motive, no?

Curious for your thoughts on that.

Doug Lichtman
Professor of Law
UCLA

Doug Lay

I would think "what's in it for Google" is pretty obvious. The objective is to see the norms of the Google-era Internet extended into the mobile communications space, at the expense of incumbent visions that might look more like cable TV. Google wants to see more Wikipedia and YouTube, and less Comedy Central, on your next cell phone.

I wonder if (and how) significant parts of the content industry will align with incumbent carriers like AT&T to fight Google.

I also wonder why Mr. Lichtman feels the need to call Prof. Picker out on some sort of clan loyalty. Don't forget to stay down wid da Chicago Boyz, Randy.

Doug Lichtman

Doug Lay -

I'm still a little puzzled. I hear your point that Google has tended to support "open" norms in various places, but in those other settings we can tell stories about how Google can easily capitalize on those norms by using its existing technology and content advantages. I don't see that so clearly here. Indeed, almost the opposite, in that Google is well positioned to just buy up spectrum and use that as an advantage, just like Google has been quietly buying up dark fiber so as to better compete with the more established Internet backbone entities.

So: can you unpack your intuition more for me? What advantage does Google have that would let it then capitalize on an open spectrum outcome? Are you just thinking that an open spectrum outcome would lead to open content, which would then need search and advertising services? But if that's it, doesn't that seem an odd way for Google to invest its money today, given how far down the road all that is at best? (If Intel were doing this, I'd understand, as someone will ultimately make a lot of money desiging and selling devices that can efficiently use open spectrum. But Google seems much further removed, no?)

Thanks,
Doug Lichtman

Pubby

Obviously Google will use spectrum to furher expand its ad business but giving complete authority to one company over open wireless is simply senseless.

we don't want any single company to monopoly open wireless market. But who cares Neither Governament nor companies care for the people all they want is their money.

Doug Lay

>> Are you just thinking that an open spectrum outcome would lead to open content, which would then need search and advertising services?

Yes.

>> But if that's it, doesn't that seem an odd way for Google to invest its money today, given how far down the road all that is at best?

Why is this so far down the road? I doubt the technological innovations required are especially radical.

Anonymous

"Adding the open-platform requirements will almost certainly reduce the revenues that the FCC will collect in the auction. "

This makes no sense. If Google's offer didn't up the ante it would have no force. If other parties were willing to bid something more than 4.6 billion for a closed system, Google would be spitting in the wind.

As to what Google's real motivation is, I don't think it's simply a matter of boosting advertising revenue. Google does more than just sell ads - it also collects data on users through browser cookies. Google would like you to use their email system, their "checkout system," and a host of other free services that compel you to submit personal information that can presumably be linked to your IP and used for who knows what. Combine this with Google's impressive mapping capabilities and you have the makings of a sophisticated geolocation system that could conceivably be used to identify and track a large chunk of its user base.

What is Google doing with this information? We can only speculate. Its willingness to capitulate to China's censorship demands are one indication that it is not entirely benign.

We can only speculate about what an open 700 MhZ band would look like, but it would almost certainly allow users to access Google's services from a wide variety of electronic devices. What information is Google collecting on its users and what, besides generating targeted ads, is it doing with it? These are questions we should be asking.

Jeff Schiller

Google recognizes that the mobile web is not where it could be in terms of users and activity. Just like the "desktop web", there's a lot of money to be made if the platform is open and everyone uses it without feeling locked into a carrier's sandbox.

Michael

Rather than impose more rules to correct the market power that existing rules have caused, why not eliminate the original offending rules that require licenses to use spectrum, as Ikeda Nobuo suggests at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=309980? An article at http://www.businessweek.com/print/technology/content/jan2005/tc2005014_6520.htm?chan=tc& argues the same point in layperson's terms.

Randy Freeman

In offering to bid 4.6B, with its four open platforms in place, Google has simply notified the FCC that it is willing meet the reserve price set by Martin's auction plan.

The FCC says that if no one meets the reserve, the spectrum will be withdrawn, re-allocated, and re-auctioned without any of the existing requirements for open access.

Google has put the FCC (and AT&T) on notice that the spectrum is at least that valuable, with open platform requirements that exceed the existing requirements.

Google seems to be after the extension of net neutrality to the next frontier. When I can surf the web on my iPhone, from anywhere, without being locked into AT&T or Verizon, Google will be happy if I use their free services to the maximum extent possible. After all, that's how they got their current valuation.

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