Google, Yahoo, and eBay have enlisted satellite carriers EchoStar and DirecTV to help them lobby the Federal Communications Commission about keeping a close eye on how spectrum auctions are conducted. The alliance aims to put tighter reins on incumbent last mile providers of broadband access.
The last mile and who controls it has been a mounting concern among the major “network-less” players like Google, Yahoo, and eBay. The concern rises from suspicion of the telecommunications industry, and its control over chokepoints.
Two bands of spectrum, expected to bring anywhere from $10-$30 billion, are expected to be auctioned off soon in a spectrum auction. The 700 MHz wireless spectrum is the most pressing, and the one the aforementioned online giants are immediately concerned with. In 2009, analog TV stations will be required by the government to go digital and give the 60 MHz spectrum back to the government. But the 700 MHz is best suited for broadband Internet.
The coalition will not be bidding on the spectrum, according to reports, but are leery of these access points being controlled by companies like AT&T or Verizon. This is largely a protective measure, it would seem, amid antitrust concerns.
Om Malik quotes Matt Coppet, a strategist for UBS Global Media:
‘Network-less’ content aggregators (Yahoo, Google) and online transaction companies (EBay) have been concerned about potential last mile toll for the customer to access their services, for the coalition providers, the only way to protect their unencumbered access to the consumer could be to build a third data [sic] own network.
One outcome they appear to be seeking is not just an evaluation of auction conduct, but an outright exclusion of incumbent providers. And based on current industry conditions, Multichannel says exclusion is a real possibility:
…the Federal Communications Commission, which will supervise the auction of broadcast spectrum, might decide to bar cable and phone companies from acquiring licenses inside their local service territories.
The exclusion of incumbents is not unheard of. In 1997, the FCC banned cable and phone companies from holding in-region Local Multipoint Distribution Service (LMDS) licenses for three years in order to promote competition in video and data markets.
