Google pushes for rules to aid wireless plans

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Google pushes for rules to aid wireless plans

By Miguel Helft and Stephen Labaton
The New York Times

July 21, 2007

If Google succeeds with federal regulators, it could change the way millions of Americans use their cell phones and how they connect to the Internet on their wireless devices.

In the Internet giant's view of the future, consumers would buy a wireless phone at a store, but instead of being forced to use a specific carrier, they would be free to pick any carrier they wanted. Instead of the wireless carrier choosing what software goes on their phones, users would be free to put any software they want on it.

Google believes that the cost of voice calls and data connections to the Internet may be partly subsidized by advertisements brought to users by Google's powerful online advertising machine.

There might even be a Google phone.

That vision, according to several analysts, is the reason Google said yesterday that it would bid upward of $4.6 billion for a swath of the nation's airwaves, which are set to be auctioned by the federal government next year--as long as certain conditions are met.

But Google's efforts to position itself on the side of the consumer are also part of a fierce lobbying battle that pits it and other tech companies against wireless carriers, who oppose conditions that Google wants to set on the winners of the auction. Verizon Wireless has called the conditions "corporate welfare for Google." And AT&T rejected Google's latest effort, calling it an "all or nothing ultimatum." The Federal Communications Commission chairman, Kevin Martin, has come out squarely against two of Google's four proposed conditions.

The FCC's rules governing the auction could shape the landscape for the next generation of mobile telephones and wireless Internet use.

"When you go to Best Buy to buy a TV, they don't ask whether you have cable or satellite," said Blair Levin, a former FCC official who is now an analyst at Stifel Nicolaus & Company. "When you buy a computer, they don't ask what kind of Internet service you have, and the computer can run any application or service. That doesn't exist in the wireless world. That's where Google wants to go with this auction."

Google has already invested millions of dollars in mobile phone technology, in part, to develop a comprehensive set of software for mobile devices that goes well beyond the mobile search and map services it already offers. Rumors about a Google phone that would provide easy access to the company's mobile services have been persistent.

The company has been characteristically circumspect about its mobile plans, and just this week, Eric Schmidt, Google's chief executive, deflected questions from an analyst about plans for a mobile phone. "We have looked pretty carefully at wireless and are thinking about what we want to do there," Schmidt said.

But Schmidt stressed the importance to Google of a network where anyone could plug in any device and have access to the full abilities of the Internet. In such an environment, Schmidt noted, mobile phone users would become significant consumers of online advertising, Google's core business.

Google fears that some of its mobile efforts could be thwarted--or prove less lucrative--if a handful of cell phone carriers continue to dominate the wireless Internet world and retain the power to determine what services and applications run on their networks. Google's set of proposed rules would have the FCC require that any devices and any application could be connected to the wireless network using the auctioned spectrum. Further, they would require that whoever wins the spectrum make a portion of it available to resellers on a wholesale basis, which Google and other technology companies believe is necessary to promote broadband competition.

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