Google Makes a Bid for the Wireless Market Google has offered $4.6 billion for the new wireless broadband spectrum that the government is auctioning off. Chris Sacca, head of Special Initiatives at Google, says his company wants to offer consumers new options for wireless service.
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Google Makes a Bid for the Wireless Market

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Google Makes a Bid for the Wireless Market

Google Makes a Bid for the Wireless Market

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ROBERT SIEGEL, host:

Now, Google's ideas about cell phone service. In January, the Federal Communications Commission is expected to auction off spectrum for wireless use and the Internet search firm Google has said this year that it would bid at least $4.6 billion in that auction if the FCC adopts Google's ideas about open platforms.

Google says we've got to be able to buy a cell phone and download any software application we want, connect to any network that's technically accessible with any wireless network we sign up with, and also that resellers ought to be able to enter the wireless market. The FCC has not formally stated the conditions for the auction, but a majority of commissioners told Congress that they favor some open platform conditions but not so much as Google is asking for.

Well, joining us is Chris Sacca who's head of the Special Initiatives at Google. He joins us from Seattle. Welcome to the program.

Mr. CHRIS SACCA (Special Initiatives Head, Google): Thanks. A pleasure to be here.

SIEGEL: And first, can you briefly describe Google's idea of what we ought to be able to do with our wireless devices and telephones that we presently cannot do?

Mr. SACCA: Sure. For too long, we think American consumers just haven't had any choice in the wireless business. You're stuck with paying high rates. You're not sure which phone you can use with which network. You don't really have a lot of choice. And as we move into the future, the same spectrum that's being used to deliver mobile telephone service is going to be used to deliver the Internet, and so we think this is a great opportunity to go ahead and really stand up on behalf of American consumers.

SIEGEL: Well, the chair of the FCC, Kevin Martin, told a House committee that he favors making part of the spectrum open to any wireless device where you could download any software. If that were the rule for the January auction, would Google be in it or would it be on the sidelines?

Mr. SACCA: Well, I certainly respect the chairman's efforts to keep a few balls there and here and really pay homage to a lot of different players, and a lot of different constituencies. But at the end of the day, we think that his duty is to go ahead and put consumers first. And so we think that it's really vital to take all four of these openness conditions into account. And we've said to go ahead and guarantee revenues to the federal government, that we'd be willing to pay the $4.6 billion if he does. If he doesn't, we'll have to go ahead and take a fresh look and see if it still makes sense for us and our partners to enter into the auction.

SIEGEL: But if indeed openness were limited to only a small part of the spectrum that's being auctioned off, would that mean that Google would simply, in taking a fresh look, probably take a look at not being part of the option?

Mr. SACCA: I think that's too far of a conclusion to draw right now. I think what we've seen actually is that there has been a resounding support both in the American public, in the press and even on both sides of the aisle on Congress for openness principles. It's hard to find anyone in this country who's deeply satisfied with their wireless service today. And so, in that light, I think we're just starting to see the tip of the iceberg. I think you're going to see principles like this not only embodied in the 700 megahertz spectrum that we're talking about, but across all existing wireless services as well into their fixed line Internet access. So I think we're going to see a lot of choice coming down the pipe for American consumers.

SIEGEL: What do you say to the big operators, AT&T and Verizon Wireless, when they say we developed these networks, and the restrictions that guarantee us revenue from them are really a fair return for our investment?

Mr. SACCA: Well, I think there's a couple of things to consider here. First, most of the spectrum that they use to build these networks was given on free by the federal government. They never had to pay a dime for it. So I think they should continue to develop the spectrum with the public interest in mind. But the second thing is just to ask them which of these openness principles do you object to, which of these do you think is worth billions of dollars? Is it the right to prevent users from going to the Internet site they want to choose, the right to go ahead and choose a software they'd like to use, the right to choose the handset that's most innovative and they think would serve them best. One of those, if their argument holds, is worth billions of dollars to them and so it's hard for me to stomach the idea of restricting user choice being worth billion of dollars.

SIEGEL: Well, real life example here. As somebody who buys an iPhone from Apple cannot access Verizon navigator on that device, are you saying that if you're willing to buy a device, you should be able to access any program out there even if it's a proprietary Verizon program.

Mr. SACCA: If the software provider is going to provide it for you and make it available to you, sure. I mean, this is the way the Internet works today and it works really well. You sit down in a browser, you can direct your browser to any site on the Internet. And so far the fixed-line Internet service providers haven't prevented you from going many places on the Internet, but some of them have been threatening to, and certainly the wireless providers have been preventing that traffic from going where users chooses to go. At the end of the day, if users have choice of where they want to go, often, they choose Google. And so, there's some self-interest in it too. But we think putting American consumers first and giving them that choice is very important right now.

SIEGEL: Is there $4.6 billion worth of interest there for Google?

Mr. SACCA: Sure. I think -

SIEGEL: Where was it going to come from? Where does it pay off to put that much money down for spectrum?

Mr. SACCA: Anytime that Americans have the choice to go where they want on the Internet, they've shown that, more times than not, they choose to go to Google. And so as they use the search engine, as they see advertisings, as they have access to more of these services, it gives us the opportunity to go ahead and innovate and make those programs available to people.

I think our fear, and the fear of companies like Skype, eBay and Yahoo who've joined us in making this openness arguments is that we are going to ask our engineers to develop really innovative software and platforms that may not actually be available to end users if the wireless companies decide to not make it available. And that would be - that would really frustrate innovation in this country and I think would leave us further behind Europe and Asia.

SIEGEL: Well, Chris Sacca of Google, thank you very much for talking with us today.

Mr. SACCA: Thank you for having me.

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