Google Gamed the 700 Mhz Auction? No!

Republican lawmakers are crying foul: Google Inc. manipulated a U.S. government spectrum auction by bidding just enough to trigger rules that will open a nationwide set of airwaves to any device and then walking away, Republican lawmakers said. The so-called open-access requirements, also backed by consumer groups, may have…

Republican lawmakers are crying foul:

Google Inc. manipulated a U.S. government spectrum auction by bidding just enough to trigger rules that will open a nationwide set of airwaves to any device and then walking away, Republican lawmakers said.

The so-called open-access requirements, also backed by consumer groups, may have shortchanged taxpayers by discouraging more companies from bidding, Representative Fred Upton, a Michigan Republican, said today at a hearing.

“Google was successful in gaming the system,” Upton said. The rules were a “social engineering” experiment by the Federal Communications Commission that prevented the spectrum swath, known as the C-block, from raising billions of dollars more, he said.

But they should not be surprised, this was Google’s stated intent all along.

Author: John Battelle

A founder of NewCo (current CEO), sovrn (Chair), Federated Media, Web 2 Summit, The Industry Standard, Wired. Author, investor, board member (Acxiom, Sovrn, NewCo), bike rider, yoga practitioner.

5 thoughts on “Google Gamed the 700 Mhz Auction? No!”

  1. I don’t understand… was any of this somehow against the rules? Shouldn’t it be up to the designers of the auction to set it up to give maximum benefit to taxpayers? I’m glad the open-access rules took effect.

  2. These Republicans must be getting paid by Verizon, who’s crying coz they paid more than they bargain for. These politicians are pretending that without Goog, there would be more participants in the auction. These other participants would be dropping like flies anyway when they don’t have the resource to bid when it gets to the serious bidding. Thus, the FCC would not have the “highest” bid that it did with Googgle playing coy with Verizon. Now Verizon is crying to these politicians, who are in their pockets, for paying more than what less qualified bidders/competitiors. This is question quantity versus quality that have guaranteed less money if these politicians and Verizon have their way. Shame on these politicians for not recognizing that us consumers won out on this auction. I hope their constituency recognize that they are being shortchange by their supposed representative. Are they representing them or their interest group?

  3. Here’s Google from the horse’s mouth:

    “Google’s top priority heading into the auction was to make sure that bidding on the so-called “C Block” reached the $4.6 billion reserve price that would trigger the important “open applications” and “open handsets” license conditions. We were also prepared to gain the nationwide C Block licenses at a price somewhat higher than the reserve price; in fact, for many days during the early course of the auction, we were the high bidder. But it was clear, then and now, that Verizon Wireless ultimately was motivated to bid higher (and had far more financial incentive to gain the licenses).

    “You may remember that as the FCC was setting rules for the auction last summer, we urged the Commission to adopt four openness conditions. Further, we vowed to bid at least $4.6 billion in the auction if the Commission adopted all four rules. Even though the FCC ultimately agreed to only two of the conditions, which nullified our original pledge, we still believed it was important to demonstrate through action our commitment to a more open wireless world.

    “We’re glad that we did. Based on the way that the bidding played out, our participation in the auction helped ensure that the C Block met the reserve price. In fact, in ten of the bidding rounds we actually raised our own bid — even though no one was bidding against us — to ensure aggressive bidding on the C Block. In turn, that helped increase the revenues raised for the U.S. Treasury, while making sure that the openness conditions would be applied to the ultimate licensee.

    http://googlepublicpolicy.blogspot.com/2008/04/cone-of-silence-finally-lifts-on.html

    Lest we forget.

    The time to complain about this auction was when Google was lobbying for the open access rules.

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