Google has proposed to the FCC that instead of getting into long-term contracts for allocating spectrum, companies buying spectrum should be free to resell the spectrum in real-time auctions. This would probably not involve human beings in protracted auction negotiations but rather negotiations between devices in real-time. Since FCC’s auction is done at the wholesale level it would probably involve companies reselling spectrum that they won to consumers on real-time basis.
NYT: “The driving reason we’re doing this is that there are not enough broadband options for consumers,” said Adam Kovacevich, a spokesman for Google’s policy office in Washington. “In general, it’s the belief of a lot of people in the company that spectrum is allocated in an inefficient manner.”
“In their proposal, Google executives argue that by permitting companies to resell the airwaves in a real-time auction would make it possible to greatly improve spectrum use and simultaneously create a robust market for innovative digital services. For instance, a company could resell its spectrum on an as-needed basis to other providers, the executives said in their formal proposal to the federal agency.”
Reed Hunt, the former FCC chief, is now heading a consortium that will bid for new spectrum that the FCC will put up for auction in 2009. He endorses Google’s proposal:
“We propose that one quarter of the capacity of the network that uses this spectrum must be sold not in a long-term service contract but instead in ongoing open auctions to any and all comers.”
The proposal is for the wholesale auction of spectrum. However, in the future such a system might require that advanced computing technology be built into wireless handsets and computers to automate the auction bidding process and permit it to take place without users noticing. The Google proposal states that such a system would reduce retail prices for wireless spectrum and extend Internet access into rural areas not now served by existing providers.
The full article is available in the New York Times.