By David Hatch
(Monday, July 23) AT&T has reacted strongly to Google's insistence that additional conditions be imposed on an upcoming spectrum auction as a prerequisite for the search engine's participation.
The "all or nothing" demand came in a letter Friday to FCC Chairman Kevin Martin. Google insisted that his proposed conditions governing a portion of the airwaves don't go far enough, but AT&T countered with allegations that Google is trying to rig the bidding in its favor.
The rhetoric set the stage for more heated dialogue at a Tuesday FCC oversight hearing before the House Energy and Commerce Telecommunications and the Internet Subcommittee. All five agency regulators are appeared for the second time before the panel, headed by Rep. Edward Markey, D-Mass.
In an effort to strike a compromise, Martin recently proposed that unaffiliated devices and applications be permitted to function on a large chunk of the so-called "700 megahertz" spectrum. The frequencies, to become available as analog television broadcasters switch to digital, must be auctioned by Jan. 28. The airwaves are viewed as a rare opportunity to create a major high-speed Internet access competitor to telecom and cable incumbents.
At first, Google appeared encouraged by the chairman's plan, but on Friday, it reaffirmed that open access also must include mandatory interconnection by other carriers and wholesale leasing of capacity. Its willingness to bid $4.6 billion or more is contingent on adoption of four principles with "specific, enforceable and enduring rules," Google said.
"This is an attempt to pressure the U.S. government to turn the auction process on its head by ensuring only a few, if any, bidders will compete with Google," Jim Cicconi, a top lobbyist at AT&T, said in a statement released late Friday.
"And in a display of dissembling rarely seen, even in Washington, Google claims that this attempt to foreclose any competition in the bidding process must be done in the name of, stunningly, competition," he added. Cicconi argued that if Google is serious about fostering competition, it can achieve the goal with the chairman's proposal.
In a Monday blog posting, Rick Whitt, Washington telecom and media counsel for Google, dismissed the argument that his company should impose its own conditions after securing spectrum. "It is the current auction system that skews the results away from potential new entrants and in favor of existing incumbents," he wrote. "The prevailing imbalance can be corrected most effectively by introducing license conditions based on open platforms."
"I think Google overplayed their hand with that letter," a wireless industry lobbyist said, noting that Google left itself open to brickbats by demanding conditions on behalf of itself. Nevertheless, he said FCC regulators will take Google's demands seriously because the company could provide fresh competition. "It is tantalizing for the FCC and Congress to see that Google is willing to spend $4.6 billion."
Markham Erickson, executive director of the Open Internet Coalition, whose members include Google, said the firm wisely clarified its position. "You're going to be smart before you spend $5 billion," he said in an interview. Erickson said Google sent the message that true open access is not what Martin proposed.
In a July 19 letter, House Oversight and Government Reform Chairman Henry Waxman, D-Calif., urged Martin to adopt an "open access and wholesale model" and endorsed a public-private partnership to spur construction of a nationwide, first responders' network, an idea being pushed by Frontline Wireless.