Rumors of Google stepping onto the wireless field have been whispered for a long time now, and with the internet giant now making moves for a small-capitalization spectrum auction with the FCC, those whispers are growing into a roar.
The real question now seems to be not "If", but "When?" Google has reportedly put its money where its mouth is, setting aside $4.6 billion to push in the FCC’s direction for the 700Mhz spectrum. Another question to ponder is: If Google takes that piece of the airwaves, will it be brokered to hundreds of smaller companies, or will it become the stomping grounds of the much fabled and long-awaited "Google Phone"? Most observers hold that Google is shaping up to build out a broadband wireless infrastructure, which both fits into its existing business model and fills an underserved area in the U.S. market.
And as hungry as Google is to see the mobile broadband truly take flight in the U.S., wireless network equipment providers are drooling over the potential new player. According to Craig Mathias of The Farpoint Group, a consulting company in Ashland, MA, "Someone is going to make a lot of money on equipment, but we don't know who that is."
But beyond market expansion, Google may be doing it to drive home a principle. According to Michael Disabato, Vice President and Service Director for Network and Telecom Strategies at Burton Group, "Google's proving a point. They want to open the networks and allow any device to attach to them. They want to break the locked handset model and show that the business model can work."
Yet another possible motive for the expansion into the wireless game is as protection of their business model against the possibility that "net neutrality" may go out the window. Should that happen and future competitors like AT&T or Verizon begin to charge for access to their customers, Google having its own network operator will give them an alternative they don't currently hold. All of these are strong, compelling reasons for Google to take this step.
The technologies most likely to be employed in such an infrastructure are WiMax or LTE (Long-Term Evolution); narrowband technologies such as CDMA and GSM aren't nearly as neat a fit with the company's existing model of flat IP networks and not as appealing with regard to how the networks are sold.
So why now? Perhaps because the 700Mhz spectrum is just so tasty. Why is it so tasty? It's easier and less costly to establish a nationwide network on compared to higher bands such as the 2Ghz band, which requires 4 times as many base stations for the same geographic coverage. But there's one very serious challenge, too.
"To get to the real kind of model Google wants, the size of the spectrum doesn't really support it," said Alan Pritchard, vice president of account development at Nortel. "When you want speeds similar to what you get at your house, you need a 20MHz channel up and down, but 12MHz up and down is what's in this auction." At the same time, the FCC is holding onto part of that 12Mhz and reserving it for public safety traffic. Another, more technical, challenge would be preventing interference with neighboring frequencies in the lower bands of the spectrum.
These challenges, however, appear to be facing a very serious and determined force headed by Google; odds are that the kind of network equipment providers lined up to help build such a network are going to consist of the best and brightest. The question, then, remains, not "If," but "When"... Or perhaps more accurately, "How long will it take?"
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Before Google: Larry Page's "Backrub."
