Google's light touch saves open access

 

Google's light touch saves open access

No surprise here: The Wall Street Journal reports that Clearwire and Sprint have renewed talks for a joint venture that would create a nationwide WiMAX network--just like the deal they walked away from last November. The real kicker is that Google will help fund the venture.

Late last year, while many research analysts predicted that Sprint and Clearwire would get back together, I started hearing whispers that if Google didn't swoop in to save WiMAX then the technology would have no future in the U.S. The deal outlined in today's report paints Google as an investor who's standing on the sidelines--not an active partner in the WiMAX venture. The Google touch, however, may be all WiMAX needs to survive. 

While the FCC's anonymous bidding rules for the 700 MHz auction make it difficult to speculate which bidders are competing for the C Block of spectrum, it's still possible that Google is participating in the auction in order to make good on its promise of driving the price of the C Block up to its reserve price, which would ensure that the open access rules stick. By the end of the day today, the C Block should reach its reserve price, and that's when things could get interesting. If the price continues to climb, then it's clear that there are at least two bidders for the C Block.

Verizon Wireless, AT&T and Google are all likely suspects, but I think Google will drop out of the bidding once the C Block hits its $4.6 billion reserve price. Google's FCC lobbying for C Block open access rules led to Verizon Wireless and AT&T going on the record with open access promises, so Google's work there is done for now.

Sprint's recent problems, however, have jeopardized its plans for an open access WiMAX network. That's why Google's involvement as an investor on the sidelines makes sense. The company is once again swooping in to ensure open access survives by throwing around its multi-billion dollar market capitalization. It's not acquiring Sprint or looking to barter for its WiMAX licenses, as some pundits have predicted, Google's just injecting some cash and stepping back.

Google's light touch may prove to be the keystone of the new open access era. -Brian

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