Choke back the tears, kids—Verizon, not Google won the majority of the wireless spectrum actioned off by the FCC.
Ever-crafty Google, which campaigned heavily for “open network” regulations on the spectrum (and won that battle), seems to have gotten its way without spending any money.
Verizon, not Google is big winner in spectrum auction [Bizjournals]
(Photo:*nomad*)
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I;m interested to see how this plays out. With all the speculation surrounding Google, I don’t recall reading anything about Verizon’s aspirations regarding this spectrum.
“I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced. I fear something terrible has happened.”
Can you hear me now?
Oh YAY! Good work Verizon! What a class act. I can’t wait for you to take advantage of my exclusive ability to only use your services with this new medium!
@D-Bo: Who doesn’t want this spectrum. Google only wanted the open access provision to be in effect so they bid up the C block spectrum to meet the reserve and Verizon went right along with it.
So now Android can be used on Verizon, well as long as they “approve” of it on their network.
Verizon was a heavy favorite to win this spectrum over Google.
I thought it was widely known that Google wasn’t going to win this one. Gizmodo knew.
NOOOOOOOOOOOOOOOO!
Google said they weren’t in it to win it, they were bidding to make sure the auction met its reserve price, and that open access rules were assured.
@D-Bo: Their “aspirations” are to not be kicked in the nuts by AT&T – so their only choice was to get enough bandwidth to be a contender.
@silencedotcom: Yup. There was an interview about this on NPR during my drive home and that’s what was said. So in theory it doesn’t matter. Hopefully that’ll hold true and that Verizon doesn’t try to somehow weasel out of the requirement.
Google got what it wanted without having to spend a dime. That sounds more like the winning strategy to me.
Victory for the status quo. Open access schmopen access, what’s in it for Verizon?
Uh headline’s wrong. Should read, “Google Big winner, Not Verizon”. Cuz Google got most of what they wanted without actually buying the spectrum. I bet at Google they uncorked champagne at the coup they pulled off, and were walking around the office saying “We Bad, that’s right, We Bad!” Yeah, open access is a big deal, when the alternative is closed access.
So we get crippled phones running Android. Nothing’s changed.
I see one of two scenarios coming out of this:
1. Google was being absolutely pro-consumer here and even though they introduce a phone that now *must* (by law) work on the new Verizon network, so does Microsoft’s and Apple’s and 3COM’s and …
2. Google has just avoided making an exclusive deal a-la Apple-AT&T, guaranteeing their phone a better deal for consumers, assuming it lives up to all the hype and delivers what Apple does in their sleep (seemless toys that just work…)
Or on the other hand Google is now in the business of shilling auctions.
This is kinda old news now…
@TechnoElf: Any bidding that Google did on the C-block was a tiny fraction of the final sale value and had no consequential impact.
Here was the bidding for the Western US C-block:
——————————————————————
$319,798,000 Cellco Partnership d/b/a Verizon Wireless
$683,894,000 Bluewater Wireless, L.P.
$540,970,000 Vulcan Spectrum LLC
$540,970,000 Bluewater Wireless, L.P.
$426,010,000 Vulcan Spectrum LLC
$426,010,000 Bluewater Wireless, L.P.
$333,833,000 Vulcan Spectrum LLC
$333,833,000 Alltel Corporation
$333,833,000 Bluewater Wireless, L.P.
As another example, the Northeastern US C-block had even less bidding:
————————————————————————————-
$502,774,000 Cellco Partnership d/b/a Verizon Wireless
$604,624,000 Alltel Corporation
$441,570,000 Alltel Corporation
$324,585,000 Cricket Licensee 2007, LLC
$324,585,000 Alltel Corporation
It looks like Google Airwaves wasn’t a high bidder at auction.
It looks like they started in round 8 with a bid of just shy of $3B and raised it four times up until round 17 where they bid $4.7B. All of their bidding was for a collection of 8 licenses (C-Band, continental US + alaska + hawaii).
Hmmmm…. considering the final price for that collection ended up being $4.8B, perhaps they did have an impact after all?
Kind of ironic … “open” systems spectrum is won by the company that “closes” their systems and cripples their phones the most!
Does this spell the end of the open system?
Hmm. Verizon sent me yet another mail offer. This time for a crackberry phone for free if I promised to pay $30 a month for their hobbled email and web for the next two years. Is this some sort of pre-emptive tactic ahead of the new spectrum to lock people in? I honestly don’t know. Mobile is not my area of geekery.
This is a dark day indeed.
@silencedotcom:
Gee, that’s not anticompetitive!
Anyway, Google’s very interesting. When they pressed for this, the tacit assumption was that they wanted this spectrum badly for a new product line. Instead, they’ve offered to participate in the mobile space with Android, which is more of a software platform than anything else.
Most investors were worried that GOOG would overpay for this spectrum – which was very, very expensive – and launch a product with uncertain success. This was probably a good thing for long-term GOOG shareholders.
See, google did something very smart. Initial reports were they were going to buy the spectrum for the gPhone. They were going to spend zillions of dollars (well, because they can) and make cell phone freedom a reality.
Then when Verizon got in the picture, google gracefully stepped back and watched the ride.
Very smart.
@mantari: Wow it’s neat to see those numbers where are they from. Well where on the FCC site I should say. And if those are the numbers, then it looks like Verizon had lower bids than other companies, how does that make sense?
I wonder if the guidelines that will hold Verizon accountable for adhering to the law or if we’ll see the same type of shenanigans that surround ‘Freedom of Information Act’ requests?
What’s the framework around enforcement?
What was google ever going to do with the spectrum anyway?
They just wanted to make sure the minimum was met.
How is Verizon the winner in this exactly? They had to buy up spectrum to compete with AT&T and Google pushed the bid over the threshold for open access… Sounds like their current biz model’s gonna have to change. Hopefully the whole industry changes so the consumers come out ahead for once, we can only hope the open access spurs some competition…
After reading another article on this I thought, great, just MORE monopoly for Ma Bell (AT&T & Verizon). Not only the landlines, but now the wireless “lines” as well. That will really open the door to competition and lower prices. Your choice – AT&T cell, or AT&T land (DSL, FIOS), or AT&T wireless – take your pick. Great!
@TechnoElf: results from the FCC site. Click on “view auction results”. Warning: diving down from the results page can be painfully slow. The slowness is the main reason why I haven’t dug into this more.
About the price oddity in the Western C-Block, it looks like you had bidding on rounds 3-6 between Bluewater Wireless, Alltel, and Vulcan Spectrum. In round 7, Vulcan dropped their previous bids (I assume because of auction rules, so they could apply their money elsewhere).
Bluewater Wireless and Alltel dropped their bids in round 9 (yes, even though Bluewater was in the lead). Perhaps they decided to go chase after some other blocks. I’d have to look at a larger picture to see the action.
So fast forward to round 30, Verizon put up a single bid, and was unchallenged.
It looks like Alltel really wanted some C-block licenses, but just couldn’t put out the cash for it.
@Voltron’s Underwear: I’d love to understand the frequency allocations even more, and I think I’m going to go back and do just that. From what I see…
Verizon’s big purchase wasn’t spectrum in X city or Y metro region. They won 22MHz of prime frequency space, nationwide (C-Block). That’s a potential for coast-to-coast coverage, without worrying about carrier _Z_ having a monopoly on a region.
Further, in major metro areas (where they’d get bandwidth starved), they went after the A and B blocks, sometimes winning both. Each one of those is another 12MHz. So in something like NYC and LA, they picked up 46Mhz of spectrum. That’s about 7-8 analog TV stations worth of frequencies.
Verizon paid a high price, but they’ve got a great deal of bandwidth to work with now, and lots of breathing space in some heavily populated areas. You could say that they’ve also starved their competitors of potential bandwidth in the same regions, giving Verizon a competitive advantage.
Summary of why this would be good for Verizon:
1] Nationwide spectrum allocation [they can potentially put good towers anyhwere]
2] A very nice chunk of bandwidth [they can push lots of data]
3] Extra spectrum in major metro areas [better quality where customer density is high]
4] Kept spectrum away from major competitors in major metro areas
5] Kept new players out of the game, kept Alltel, Cox & others as bit players
I think all this adds up to Verizon having positioned themselves very well for the next generation of cellular data services. They paid a high price, yes. Hopefully those low interest rates will make it no so painful in the long term.
Except when Verizon manages never to certify devices for its network. Thanks to Chairman Martin’s “consumer friendly” auction rules we have an incumbent getting more spectrum and no new competitor in the wireless market.
The Chairman wanted it both ways. He wanted to make as much money as possible and make people believe he is pro-consumer. And it looks like he succeeded. But I don’t buy it. He put lax open-access requirements on the C block, whcich Verizon’s savvy lawyers will be able to wiggle out of and set the reserve prices so low on the other blocks that a rich incumbent (read: Verizon)can scoop up the entire spectrum the licenses, which they did for he most part
Great Job Kevin, thanks. Less competition in wireless, that’s what we need.
*clears throat*
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When you really need to curse something, there’s Perl.