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    Could Google kill the cell phone industry?

    very interesting... src: http://news.com.com/8301-10784_3-974...g=2547-1_3-0-5
    In case you haven't been paying attention, the old 700MHz wireless spectrum is up for auction by the federal government. And under the veil of touting an "open" platform, Google CEO Eric Schmidt announced that the company will participate in the Federal Communications Commission auction for the bandwidth--with a few minor requests for the FCC: open applications for users; open devices that will work with whichever network provider customers choose; open services that would allow for third-party resellers to acquire wireless services on a wholesale basis; and open networks, which would allow third parties, such as Internet service providers, to interconnect at any feasible point within the 700MHz licensee's wireless network. Not bad for a reported $4.6 billion deal, huh?

    And while this story has already been skillfully reported on, I couldn't help but wonder what Google has up its sleeve. So, after some deliberation, here are my thoughts (let's see yours in the discussion).

    With full leasing ownership of the 700MHz spectrum, Google will try to effectively cripple the cell phone industry. Before you scoff and say this is a bunch of garbage, consider this: Google will offer the $4.6 billion only if the government agrees to the terms above. And perhaps the most compelling of those terms is that Google is requesting "open devices" that will work on the "open networks." In other words, Google wants to create the ability for companies (and most likely itself) to create devices that will seamlessly connect to the broadband spectrum. Why can't one of those devices be a phone?

    Whether you realize it or not, Google's bread and butter is advertising. The company doesn't need to charge money for its services because the advertising will bring home the bacon. If you have ever used Picasa or Google 411, you know what I mean. Service plans and contracts are of no use to Google--it doesn't have the time to deal with those petty issues. But if Google is anything, it's competent and self-assured. Not only does the company know what it's doing, it does it better than any other organization.

    Even more compelling is the nature of the relationship between Google and telecommunications companies. Not only do they basically hate each other, they sit on directly opposite sides in the debate for Net neutrality. Simply put, I think Google would love to significantly damage these companies.

    So you heard my justification, now I'll tell you how it'll work. If the FCC agrees to the terms outlined above, Google will definitely win the auction. Once its wins, its executives will soon realize (as if they haven't already) that this spectrum can go through walls and reach just about anywhere. Even better, it'll create a speedy broadband connection.

    Within no time, Google will announce that wireless will be made available to the public through its system. After all, it did it in San Francisco, why won't it do it all over the country? In effect, Google would run a "third broadband pipe."

    Once the company announces the wireless broadband to the nation, it will immediately announce that Google Phone everyone has been talking about. The Google Phone will work specifically with the Google system (kind of like Skype) and will be free of charge. The only fee to the consumer is the cost of buying the phone, which can be done over the Google checkout system from online retailers or at fine brick-and-mortar retailers nationwide.

    As soon as the phone is released, people will be tossing their iPhones, Razrs and every other cell phone into the nearest river. Why pay all that money for a phone when you can have the same kind of service for free?

    Now we have to solve the mystery of how Google will make money. To be honest, I don't think it'll be too difficult. Google thrives on using services it doesn't charge for, and why should this be any different? I'm sure you will see advertising when you start up the phone, but most of the benefits from this system will be earned on the Internet, where people will be lauding the company for all it has done to move the industry forward. In a matter of months, Google would practically control Internet advertising. And by giving people free Internet access on the phones, guess where the default home page will be pointing?

    As soon as Google starts this system, AT&T and Verizon will lead the charge against this "anticapitalist" system and lobby the government for all it's worth. But with no debt and coffers of money for rainy days, Google will remind the men and women in Congress to check their pocket and look at the name on their new do-it-all phone. That should change their minds quite quickly.

    So there it is--my prediction of what Google will do with the 700MHz spectrum. Not only will I enjoy my free go-anywhere phone use, I'll love it when I walk into Verizon and AT&T to tell them I'll never go back.

    Say what you will, but don't be surprised if the cell phone industry starts sweating bullets when Google wins that auction.

    Now it's your turn, what do you think Google will do with the spectrum?

    #2
    Wow, This WILL be intresting!

    Comment


      #3
      So Google has a plan to take over the world. Looks like Wall Street got it wrong last week.
      The test of success is not what you do when you are on top. Success is how high you bounce when you hit the bottom
      --General George Patton

      Complex problems need to be solved collectively.
      ––Paul Nussbaum
      usc87.blogspot.com

      Comment


        #4
        Hmmmmm wasn't that a Dr Evil plan in Austin Powers? Or at least his hench mans plan till Dr Evil came back.

        Comment


          #5
          It was world domination.

          If Google bid for the 700 MHz spectrum is accepted, it could be the biggest tech story of the year.

          Google announces intent to bid on 700MHz spectrum auction, if...
          By Eric Bangeman | Published: July 20, 2007 - 09:46AM CT

          In a letter sent to the Federal Communications Commission today, Google CEO Eric Schmidt announced his company's intentions to enter the bidding for the 700MHz spectrum early next year—if Google's proposed auction rules are adopted. Earlier this month, a draft of Martin's proposed auction rules were released, rules which embraced some principles of open access, but left proponents of the principle wanting more.

          Google is one of those who found Martin's proposal lacking. The company would like the FCC to embrace four additional conditions as part of the auction rules: open applications, open devices, open services, and open networks. Should the FCC agree to do so, Schmidt says that Google will jump in on the bidding at the FCC's $4.6 billion reserve price.

          The four conditions outlined by Google in its letter announcing its intent to bid would go a long way towards ensuring that the freed-up spectrum fulfills its potential as a "third broadband pipe." Under a truly open network, consumers would be able to use any application on any device that they want. Also, winning bidders would be forced to license their spectrum at wholesale prices, which would keep one or two companies from gobbling up all the spectrum and limiting competitor (or even customer access to it). Lastly, ISPs would be able to interconnect freely to the 700MHz network at any technically feasible point.

          arstechnica
          The test of success is not what you do when you are on top. Success is how high you bounce when you hit the bottom
          --General George Patton

          Complex problems need to be solved collectively.
          ––Paul Nussbaum
          usc87.blogspot.com

          Comment


            #6
            Google looking to bid big in 700 MHz spectrum auction
            Posted: 20-Jul-2007 [Source: Google]

            [Google makes additional moves on the FCC to adopt its four "open" platforms idea. In addition Google CEO Eric Schmidt, in a letter to FCC Chair Kevin Martin, said if the open platorms idea is adopted, Google will commit at least $4.6 billion to bidding in the upcoming 700 MHz auction.]

            Mountain View, CA -- Google announced today that should the Federal Communications Commission adopt a framework requiring greater competition and consumer choice, Google intends to participate in the federal government's upcoming auction of wireless spectrum in the 700 megahertz (MHz) band.

            In a filing with the FCC on July 9, Google urged the Commission to adopt rules for the auction that ensure that, regardless of who wins the spectrum at auction, consumers' interests are served. Specifically, Google encouraged the FCC to require the adoption of four types of "open" platforms as part of the license conditions:

            * Open applications: Consumers should be able to download and utilize any software applications, content, or services they desire;

            * Open devices: Consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;

            * Open services: Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and

            * Open networks: Third parties (like internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee's wireless network.

            MobileTechNews
            The test of success is not what you do when you are on top. Success is how high you bounce when you hit the bottom
            --General George Patton

            Complex problems need to be solved collectively.
            ––Paul Nussbaum
            usc87.blogspot.com

            Comment


              #7
              Google Cell Phone in the Works?
              Reports say Google has developed a customized handset, is talking to cell phone manufacturers and wireless carriers.
              Ben Ames, IDG News Service

              Thursday, August 02, 2007 8:00 AM PDT

              Google has developed a prototype cell phone that could reach markets within a year, and plans to offer consumers free subscriptions by bundling advertisements with its search engine, e-mail and Web browser software applications, according to a story published today in The Wall Street Journal.

              Google is showing the prototype to cell phone manufacturers and network operators as it continues to hone the technical specifications that will allow the phone to offer a better mobile Web browsing experience than current products, the story said.

              Google did not return calls for comment.

              The move would echo another recent product launched by a phone industry outsider, Apple Inc.'s iPhone. But Google's product would draw its revenue from a sharply different source, relying on commercial advertising dollars instead of the sticker price of at least $499 for an iPhone and $60 per month for the AT&T service plan.

              PC World
              The test of success is not what you do when you are on top. Success is how high you bounce when you hit the bottom
              --General George Patton

              Complex problems need to be solved collectively.
              ––Paul Nussbaum
              usc87.blogspot.com

              Comment


                #8
                When would this be expected to happen?

                Comment


                  #9
                  Liz,

                  This is an evolving/developing story and the auction for the 700 MHz spectrum has not yet been scheduled. The transition of analog to digital TV takes place in February 2009.
                  When would this be expected to happen?
                  According to John C. Dvorak: "between now and 2009."
                  Last edited by PN; 5 Aug 2007, 9:29 PM. Reason: Dragon
                  The test of success is not what you do when you are on top. Success is how high you bounce when you hit the bottom
                  --General George Patton

                  Complex problems need to be solved collectively.
                  ––Paul Nussbaum
                  usc87.blogspot.com

                  Comment


                    #10
                    I doubt it, the cell phone industry's will pay google somthing insane not to do what that guy is predicting.

                    Don't get me wrong, that would be reallly awesome if google did that but I just don't see it happening.

                    Wouldn't the government come in and make sure google won't take over the world or take over the cell phone industries?
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                      #11
                      The 700 MHz auction is probably coming up in 2009. Google said they will put up the $4.6 billion bond to participate. However, Google is not getting their way on the rules but it is somewhat more open than normal (not as open as Google wanted) and that is what the FCC decided. Google wanted whoever wins that frequency to be required to resell it at wholesale costs to other vendors to keep the competition going. The Google model may be to offer a cell phone and the service for free or very cheap and they would make it up in advertising.
                      The test of success is not what you do when you are on top. Success is how high you bounce when you hit the bottom
                      --General George Patton

                      Complex problems need to be solved collectively.
                      ––Paul Nussbaum
                      usc87.blogspot.com

                      Comment


                        #12
                        2009? aw man...

                        oh well, lots can happen in a year or two.

                        Comment


                          #13
                          I just learned is that the bidding for the 700 MHz Band is scheduled for 1/16/2008. I hope Google is still up for the challenge.
                          .
                          The test of success is not what you do when you are on top. Success is how high you bounce when you hit the bottom
                          --General George Patton

                          Complex problems need to be solved collectively.
                          ––Paul Nussbaum
                          usc87.blogspot.com

                          Comment


                            #14
                            Originally posted by Crackpot Journo
                            Even more compelling is the nature of the relationship between Google and telecommunications companies. Not only do they basically hate each other, they sit on directly opposite sides in the debate for Net neutrality. Simply put, I think Google would love to significantly damage these companies.
                            Whenever I read economic 'analysis' that includes crap like the bolded text, I kind of tune out. Google is one of the World's largest publicly-listed companies. Directors have a fiduciary duty to act in the best interests of the company (i.e., to maximise profits etc.), not to hurt those they 'hate'.

                            Building a massive broadband network that covers the USA would cost billions of dollars. Giving away 'free' software & services is different to giving away free broadband wireless access to 300 million people.

                            I think Google will do lots of interesting things with the spectrum - including sub-licensing - but setting up a free telephone network is just silly.

                            Chris.
                            Have you ever seen a human heart? It looks like a fist wrapped in blood! Larry in 'Closer', a play by Partick Marber

                            Comment


                              #15
                              Wifi and voip may kill the cell phone first. A number of cities have already set up free wifi. There is a movement afoot to convince more people to allow others to use their bandwidth for free. In any neighborhood in New York City, for example, there are easily half a dozen open wifi channels.

                              A wifi phone will take a big chunk of the cell market away. In Asia, one can already buy a sim card for any cell phone and that is the largest cell phone market in the world. In fact, there are cell phones that can take multiple sim cards.

                              Wise.

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