Deliver me from closed networks, Google

If there's one company that knows how to strike fear into the hearts of the tech establishment, it has to be Google. Not only does the company represent the sort of neo-hippie sensibility (colorful logo, two "O"s, beanbag chairs) that makes the suit and tie crowd so uncomfortable, Google also has enough cash to pose a significant threat to the big boys. That's why yesterday's 700Mhz auction announcement is such big news (see today's top "Geek News" story). Google isn't just boasting--the company really could drop $4.6 billion on spectrum if it so desired.

This development is likely to set off the Google conspiracy theorists yet again--Robert Cringely and the rest of the tin foil hat crowd will point to this auction as hard evidence Google really is trying to take over the Internet as we know it. I suppose it's a bit hard to argue against that claim when the company has announced it's willing to throw down a massive sum of cash in what's set to be one of the largest and most important spectrum auctions of our time. That is, of course, unless you look at the other players in this game.

You see, before Google stepped onto the stage, spectrum auctions were the domain of wireless carriers, equity firms and investors. Spectrum is a commodity just like any other. It has an inherent value, can be bought and sold and is generally a sound investment. The wireless carriers have been battling each other for years in spectrum auctions, buying up any and all available slices of spectrum like so many railroads and electric companies. As these carriers have started to build out their next-generation networks, their hunger for spectrum has intensified. While gobbling up spectrum, however, none of these carriers considered there might someday be rules governing how this spectrum should be used.

There has been a movement as of late, led by public intellectual Timothy Wu and a few Silicon Valley companies, to demand wireless networks be opened up to allow for third party applications and peripherals. Citing the 1968 Carterfone ruling for wired telephone networks, these folks claim the United States government has a legal obligation to open up the airwaves. Of course, this isn't pure altruism. Web companies like Skype have a lot to gain if their applications are allowed to run on the carriers' networks. Nonetheless, open wireless networks would ultimately benefit the consumer, allowing for the draconian rules that have long governed how one uses a wireless device finally to be lifted.

This brings us back to Google. As a major player in the world of web-based applications, Google clearly has something to gain if the wireless networks are opened up. On the other hand, most of Google's apps can run comfortably in a web browser, thereby eliminating the need for installing applications directly onto the device. So, is this spectrum, if made open, really worth $4.6 billion or more to Google? Probably not. But unlike most companies (including the wireless carriers), Google theoretically could afford to buy $4.6 billion worth of spectrum and if an interested buyer says it wants that spectrum to be open, you had better believe that the FCC is going to listen.

If Google forces the FCC's hand in opening up the 700Mhz spectrum prior to the auction, it will accomplish two things. First, it will make it so the big boys--AT&T, Verizon, Sprint and T-Mobile--no longer are interested. That way, if Google really does want the spectrum, it will have far fewer competitors and, probably, pay a far lower price. Second, it will set a precedent for future spectrum auctions and could even create a domino effect in the wireless industry, single-handedly crafting a future where all networks are as open and neutral as the World Wide Web. Google can achieve this latter aim without spending a dime--all it has to do is convince the FCC it's interested, thereby swinging the auction in Silicon Valley's favor. Care to call Google's bluff? I'm sure AT&T and Verizon don't. -Mehan