Having carved out a leading position in the software that runs
cellphones, Google Inc. is now angling for a role in the networks
that connect them. It is lobbying U.S. regulators to free up vast amounts of
low-cost, mostly vacant spectrum that could serve as an alternative to the big
carriers’ services.
The plan that Google and others are backing would open up as
much as 150 megahertz of spectrum around the 3.5 gigahertz band, pushing to
make it usable by all comers without a license while still leaving some of it
available for companies to use exclusively.
The 3.5 gigahertz airwaves aren’t much use to wireless
carriers, because they aren’t good at carrying signals for long distances. But
they are useful for delivering heavy loads of data in cities, which could make
them viable for a lot of typical wireless needs—the way Wi-Fi is now, but
potentially broader and more available.
The spectrum would enable startups funded by venture
capitalists, for instance, to build speedy wireless networks in parks,
buildings or public areas relatively inexpensively, thus making it cheaper for
consumers to access the Internet—and ultimately use more of Google’s services
like search, Gmail and YouTube.
Hurdles include developing devices that work on the spectrum
and managing the open-access use. Wireless carriers give the idea lukewarm
support. While the national carriers say they are in favor of a sharing model,
they have also pushed for a transition period that would delay its
implementation. Moving any faster, AT&T said in an August FCC filing, would
“plunge the 3.5 GHz band into a quagmire of uncertainty.” If carriers don’t
widely use the spectrum in their networks, it could discourage phone makers
from making sure new devices can use it.
Since early 2013, more than any other company, Google has
lobbied the Federal Communications Commission on the idea during at least 10
meetings and in more than 100 pages of highly technical filings. The FCC could
finalize rules for using the spectrum this year.
The Internet company sees the move as a first step toward
draining some of the cost out of the wireless industry, people familiar with
its thinking said. Google makes money when people use the Internet more often,
but the high cost of wireless-data service leads many subscribers to think twice
before queuing up another YouTube video or downloading another song.
There is an ideological element, too. Google and its allies
believe current spectrum policy promotes scarcity by letting a handful of
companies lock it up. Bids in the current ongoing auction, for example, are
nearing $45 billion, a price that is out of reach for most would-be rivals.
Instead, they’re pushing to make more spectrum usable by all comers without a
license.
Already, most wireless data is consumed when people are
stationary, via Wi-Fi, which carried 93% of all mobile data traffic in the U.S.
in 2013, according to Cisco Systems Inc. Paying for the rights to use airwaves,
or spectrum, is one of the wireless industry’s most expensive inputs.
The book value of Verizon’s airwaves alone is more than $75
billion, according to its securities filings, and carriers need more of it to
satisfy growing demand for accessing the Internet via smartphones. Expensive
networks lead to higher cellphone bills, and subscribers typically pay more as
their wireless Internet use goes up. The reason the idea leads to cheaper
airwaves is because more of it would be shared. The 3.5 megahertz channel is
mostly untapped, aside from some military use and a handful of rural wireless
Internet providers.
The military use had been a major hurdle, because the Navy
operates radar systems in the band and the government has argued that hundreds
of miles along U.S. coastlines—where about 60% of the U.S. population
resides—would need to be excluded from use. But Google has led experiments that
it says show the problem can be managed.
The plan Google supports would create three tiers of access.
Government users would have first-tier access. Companies could apply for
exclusive access to small geographic swaths in the second tier. The third tier
would be open for anyone to share, similar to the spectrum used for things like
Wi-Fi, Bluetooth and garage-door openers.
A key feature of the idea is that at least one company would
serve as a traffic cop to direct devices to available lanes in the airwaves to
prevent interference. While Google hasn’t formally volunteered to operate the
system, it has built a prototype and has a similar system in place for the slivers
of spectrum situated between TV channels.
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