Lawmakers complain that Google 'gamed' auction

By , IDG News Service |  Mobile & Wireless

Three lawmakers complained Tuesday that Google 'maneuvered' its way
into an open wireless network without having to come up with a winning bid in
the U.S. Federal Communications Commission's recently completed 700MHz
spectrum auction
.

U.S. Representatives Cliff Stearns and John Shimkus, both Republicans, suggested
Google out-maneuvered the FCC when the agency required the winner of about a
third of the spectrum that was auctioned to operate under open-access rules.
A third lawmaker, Representative Eliot Engel, a New York state Democrat, also
said he was concerned that after the auction ended, Google said its primary
goal in bidding in the auction wasn't to win, but to make sure the open-access
rules happened.

Most lawmakers speaking at a hearing on Tuesday gave mixed reviews of the 700MHz
auction, which wrapped up in March. Many Republicans voiced concerns about the
money raised, and many Democrats complained that large incumbent carriers won
much of the spectrum.

Google promised to bid at least US$4.6 billion on the 22MHz C block of spectrum
if the FCC would require the winner to allow outside devices and applications
to operate on the network, but Verizon Wireless outbid Google and won most of
the C block licenses.

Two Google officials, in an April 3 blog
post
, said the open-access rules were their top priority for the auction.

"Based on the way that the bidding played out, our participation in the
auction helped ensure that the C Block met the reserve price," wrote Richard
Whitt, Google's Washington, D.C., telecom and media counsel, and Joseph Faber,
Google's corporate counsel. "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."

Stearns, from Florida, complained Tuesday that the FCC allowed Google to manipulate
the auction and get a "free ride" on the C block spectrum. Google
in November launched a mobile operating system project along with the Open Handset
Alliance

"I suspect that if Google had been interested in more than just maneuvering
within the system, it could have prevailed in the C block and become a new [wireless]
entrant," Stearns said during a hearing in the House of Representatives'
Subcommittee on Telecommunications and the Internet. "I suppose we cannot
blame them for trying to get free access to the spectrum; what is more concerning
is, that even though we knew what they were doing, we let them maneuver this
way anyway."

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