Wednesday, January 23, 2008

The 700mhz auction: What is all the fuss about?

Digital broadcast TV is going to vacate the upper ranges of the spectrum they have been using for the last several decades. Those of you who recall actually watching terrestrial broadcast TV will know the 700mhz band as channels 52-69. This means that one of the best broadcast ranges for wireless data transmission will now be available for use. The auction is for who gets control. Why is this such a big hairy deal?

Let us keep it simple. Remember the world before cell phones? Remember the internet before AOL started giving all you could eat access for 19.99 a month? Remember how big a change it made for folks to be able to reach folks anywhere with a cell phone and how the internet suddenly became useful when you could actually use it all the time?

Well *fingers crossed* the result of the 700mhz auction is going to bring those two factors together. Cheap all you can eat access to the internet on the go. No more being limited to wifi hotspots. No more penny per kb cellular data access charges. The idea will be that you could have a cellphone, laptop, pda, etc... with a 700mhz based system in it and you will have a reasonable monthly fee for access to the internet.

Most wonder how having the internet on the go with you will change anything over just having it at your house. To me those are the exact same people that said having a cell phone would not really be any different from having a phone at your house. I think it is hard to overestimate the impact universal web access will have. And it will have it in both anticipated and unanticipated ways. It will be cellphones on steroids.

What sucks is that this could already be happening. And the reason it isn't happening already is unfortunately a possible reason why the 700mhz spectrum could end in more of the same. Expensive mobile data costs from the same old providers with no way in for someone who wants to change the game.

That is the fuss. The diametrically opposed forces behind the auction that want to use the technology in one way or the other. Google has done as much as they can to ensure that no matter who wins the use of the spectrum will be far more open and accessible that wireless data spectrums of the past. But the true fate will ride in the hands of the auction winner. I for one hopes Google puts their money where their mouth is and goes after it with every bit of market power they now possess.

What could this be for Google? This could be the last mile. 700mhz could put Google almost immediately in touch with just about everyone in America. Right now you can only reach google's services through an ISP... ie through existing telco and cable companies for a fee. Google would likely do the exact same thing they have always done and give away the service in return for your eyballs on adds. In effect it would complete the circle of Googles life. Many seem to think their advertisement model is new. It isn't. Giving away the content to the masses in return for advertisement dollars from marketers is the broadcast TV model of doing business. And if Google wins a block of the auction they could step in and provide internet access in return for add revenue much the way ABC/NBC/FOX etc give away sitcoms for add revenue based on commercials. If they can support broadband rates of access then mobile communications becomes cheap rather than a significant monthly cost. America could go from being the most expensive mobile data/voice nation to the cheapest. And then our rate of inovation would finally have a chance to have a go at just what would be possible with universal one the go data access.

The pieces of the puzzle as I see them fitting together.

Android: the cellular OS system designed by Google and soon to be unleashed on the world. This means they are ready to support mobile on the go systems. They want people on existing systems, but Android will not care what spectrum is used to access it. This means if the race to the bottom is won by an existing technology google has adaptable software that will be relevant no matter who wins. But if Google does own a piece of the pie then suddenly making a physical handset would be likely. But even if they do not, the different way google does business will have an easy time attacting hardware developers to the new spectrum without the headaches of designing hardware for existing cellular networks. The design limitations will be what customers want, not what networks want/will allow.

Google Mobile Data centers + Google Dark Fiber + Google 700mhz ownership: We all have heard about Google's mobile data centers but nobody has really explained what they will be good for. Sure they can help provide added horsepower in high traffic areas of the backbone. But they could also be dumped at the base of a radio tower with access to some of the Google Dark Fiber and provide the last mile wirelessly to folks via the 700mhz spectrum. With the mobile data centers this means Google can roll this out in a hurry and then formalize the infrastructure at a later date (if needed). Getting the bandwidth will mean nothing if they are not posed to exploit it. These three pieces of the google pie, of which they already contain two, could enable them to deploy a parallel internet backbone with widespread wireless access in relatively short order. No building, No hiring. Just dump crates where they are needed and wire them up, manage them remotely. Voila, Google is now in the drivers seat for internet access.... if the access hardware support falls into place with it.

So Google has a mobile device OS, Massive amounts of fiber nationwide, portable data centers that could be deployed to provide last mile wireless access to the fiber over the 700mhz spectrum (if they or a willing 700mhz owner) gets control of the spectrum.... the only thing missing is the hardware that uses the spectrum. Laptop cards, USB dongles, SD devices, Compact flash devices can come quickly and retrofit multiple devices in short order. The next generation will have it built in. We could see this happen in two years. To my eyes Google is positioned about as well as they can be. Success is not dependent on them having control of it all, it just so happens that it probably would be best if they did.

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