Shortly after the C Block of spectrum in the 700 MHz auction hit its reserve price, which triggered the open access rules for that slice of spectrum, FierceWireless editor Brian Dolan spoke with one of the key figures in the open access debate: Christopher Libertelli, Skype's senior director of government and legal affairs. Libertelli teamed up with Google's lobbyists and a number of consumer groups to effectively lobby the FCC to implement the open access rules for the C Block but he says the open access fight is not over yet.
FierceWireless: The C Block of spectrum hit its reserve price of $4.6 billion today, which means that the open access rules the FCC implemented will stick. Google, Skype and others were instrumental in getting the open access fight. Are you at all surprised by this outcome?
Libertelli: There was a question about whether the open access
provisions would depress the value of the spectrum and I think this morning's
activity showed that the markets had fewer reservations about the reserve than a
lot of the critics who lobbied the FCC did. It was, I think, a very, very
positive decision that the commission came up with last July in the face of some
pretty stiff lobbying by wireless incumbents. This represents the best tradition
of FCC decision-making. I'm not so surprised that the companies would eventually
recognize that wireless Carterphone and open access is in the best interest of
consumers and the network providers and companies like Skype that build
applications for wireless networks, but maybe it was just a matter of the
individual players thinking through business models and then coming up with
things like the bid that we saw this morning.
FierceWireless: Currently the C Block has not garnered a bid after the one that pushed it over its $4.6 billion reserve price. Do you think that indicates that there was just one bidder-like Google-since the company promised the FCC that it would drive the spectrum block's price tag up past that reserve price?
Libertelli: Well, it's really hard to know. People are reading the tea leaves on this left and right. Blair Levin suggests that through inference and the use of waivers that there are at least two companies in there bidding for the C Block. I can't say-I don't know. Nobody knows.
FierceWireless: If Verizon Wireless or AT&T wins the C Block, do you think they will interpret and implement the open access provisions in a different way than Google would if it wins?
Libertelli: I think there is a difference of opinions over what those open access provisions mean and ultimately it's for the FCC to decide what openness means and what the open access provisions means, but I take them at their word no matter which company is the ultimate licensee. As you know, Google has begun a development effort around the Android platform that would allow companies like Skype to innovate and reach our consumers so people can have conversations for free when they are on this spectrum.
At the same time, Verizon has announced that a business unit within their company is going to embrace the concept of openness and talk to the development community, including companies like Skype, and figure out the best way to implement the open access provisions, these Carterphone rules. So, while there are probably shades of grey in terms of the kind of openness companies would embrace-Google compared to Verizon-the core terms, the basic idea that the wireless Internet should really operate more like the wired Internet, is really something that the commission has taken ownership of and it's the commission that will enforce these rules. Today's auction result is that it's up to the agency to ensure that whoever it is who wins the spectrum adheres to their open access rules.
FierceWireless: When the FCC opened up the prospect of open access provisions on the C Block for public comment, Verizon Wireless referred to them as an "experiment" that the FCC wished to undertake. When the carrier made their "Any Device, Any App" announcement, Verizon Wireless couched it by saying it would probably only appeal to a small user segment within their subscriber base. Do you think the open access provisions are of interest to a small user segment or would it benefit all wireless users?
Libertelli: It is not for Verizon or AT&T to decide what consumers want, it is for consumers to decide what they want. So, for us, it's about giving them an alternative and providing them with the tools to take Skype with them wherever they want to go. It is our obligation to try to win our consumers attention and allow them to download Skype for Windows Mobile onto their device. It doesn't seem to us to be the right public policy to let Verizon be the one who makes that choice for consumers, and that is what's so brilliant about this open access provision is that it puts control over communications back into the hands of consumers. Nobody knows how consumers will ultimately end up using these openness provisions, but what we can say is that consumers will get to decide and not the network owners.
In addition, it's a signal to the developer community to go out and develop whatever you want that uses the 700 MHz spectrum and try to capture consumers' attention. People in our ecosystem who are building applications that hook into Skype, for example, they will be able to compete for user attention, and that's the way the market is suppose to work. The market is not supposed to work with a handful of companies making decisions for consumers.
FierceWireless: Shortly after Verizon made its "Any Device, Any App" announcement, AT&T came out and said it already had the most open network, and implied that much of this open access discussion didn't apply to them. In Skype's experience, does AT&T run an open network?
Libertelli: We know two things at least: The terms of service that AT&T has on the market today prohibits a Skype user from using a device or its Internet connection to use Skype. That's not open behavior and that's not consistent with the FCC's open access provisions. We also know that the iPhone is locked to AT&T's network and users can't take the iPhone and bring it to any network they want. Those two things combined suggest that there is still more work to do to open AT&T's network.
FierceWireless: When Google first proposed these open access provisions to the FCC, they actually had four provisions: Open devices, open applications, open services and open networks. Only open devices and open applications, however, were adopted in the final rules for the C Block. I assume that if Google wins the C Block they would still adopt the other two provisions, but should an incumbent win it, they would only implement the required two. Do you think open access would be fully realized without the third and fourth provisions: open services and open networks?
Libertelli: I have always understood the open services, that third provision for open access, to be sort of a subset of [open devices and open applications], but Rick Whitt over at Google is really the person to talk to explain the nuances between those provisions. We build an application that allows people to talk for free and use Skype in a mobile environment. We are fully supportive and engaged the commission on this "no blocking, no locking" Carterphone rule early on, which would protect the device-level openness principle as well as the ability to use software applications like Skype. For us, those are the key pieces of a good open access policy at the agency. That isn't to say we didn't care about the wholesaling requirement, we did. It would provide our users with yet another alternative in the market. [Google] seemed to argue for [open access] more often than we did, but that's simply because we had one person doing the lobbying-namely myself-and they had a few more. It wasn't a question of not caring about it, but rather a need to put an emphasis on the things that we had put in our Carterphone petition in February of last year, which really had more to do with open devices and open applications.
FierceWireless: Finally, now that the open access provision looks to be implemented on the C Block, how will that affect Skype? What will Skype do to leverage it?
Libertelli: The [implementation of open access on the C Block] sends a very positive signal to Skype that this spectrum will be friendly to a Skype conversation-friendly to Skype applications that run on mobile devices. It's a very positive step forward. It's an incremental step forward. There is still more work to do. There is still a need to convince policymakers that if wireless is good in the 700 MHz context, then it is also good in the broader wireless market. We take this as a very positive step forward since it means users can now download Skype Mobile for Windows. It also signals to Skype and companies like Skype that this wireless space is moving in the right direction: moving toward more openness and not less. That's a shot in the arm for companies like mine who wake up everyday trying to build new applications to allow people to structure their communications and free up their conversations and allow people to free up their conversations and take Skype with them. The spirit of entrepreneurialism and experimentation that this open access provision represents is all very encouraging in particular to our mobile developers.