Google to FCC: Accept our rules and we'll bid

In its clearest statement of intent so far, Google said that it will compete in an upcoming wireless spectrum auction, if the government agrees to certain rules.

On Friday, Google sent a letter to the U.S. Federal Communications Commission chairman informing him that the company will commit a minimum of US$4.6 billion toward the auction, but only if certain conditions are met. Google spelled out those conditions in an earlier filing with the FCC.

The billion-dollar commitment could assure the FCC that if it does implement the conditions, it can expect to raise the amount of money it hopes to. “The odds are still against the FCC imposing the conditions Google seeks, but this significantly ups the ante,” said Kevin Werbach, an assistant professor of legal studies at the Wharton School of the University of Pennsylvania and former counsel for new technology policy with the FCC.

Google’s proposals are controversial for existing mobile operators, which could decide not to participate in the auction if the rules don’t suit them, resulting in potentially less income to the government. On Thursday, Verizon Wireless said that complying with Google’s ideas would amount to corporate welfare and bad public policy.

The $4.6 billion amount appears to be the figure that Google believes the FCC will require as a minimum price for the spectrum. In its letter to the FCC, Google wrote that it understood that a draft order from the commission had specified that figure. The FCC typically sets a minimum price to sell spectrum; if the minimum isn’t met, the agency can cancel the auction.

&p “We’re putting consumers’ interests first and putting our money where our principles are — to the tune of $4.6 billion,” Chris Sacca, head of special initiatives at Google, wrote on the company;#8217;s public policy blog.

Google says that unless the FCC sets certain rules on the auction, existing large mobile operators will inevitably win the spectrum and competition in the market will stagnate. In order to prevent that, Google is urging the commission to ensure that end users can download any applications, services or content they want. Consumers should also be able to buy a phone and use it on any network. In addition, Google says the winner of the spectrum should be required to allow third parties to resell services over the network on a wholesale basis.

Some other groups, such as Frontline Wireless LLC, a company backed by luminaries including former FCC chief Reed Hundt and former Netscape CEO James Barksdale, have proposals similar to Google’s.

While Google has been vocally urging the FCC to ensure that the spectrum can be used by any device and service, the company has until now hedged on questions about whether or not it plans to bid for the spectrum.

The FCC auction for 700-MHz spectrum is expected to happen next year. The frequencies are considered prime for mobile communications because signals sent through them can travel far and can penetrate walls better than higher frequencies. Much of the similar spectrum is already spoken for so this auction is considered a rare opportunity.

In a perhaps related announcement, on Friday U.K. femtocell maker Ubiquisys said that Google has invested in the company. Femtocells are small base stations that can be used in homes or offices to improve mobile phone coverage. Ubiquisys’ current products operate over 3G (third generation) networks.

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