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Google: We're Putting "Our Money Where Our Principles Are"

This morning Google issued a formal statement about its intention to bid on the wireless spectrum licenses. Here it is:

MOUNTAIN VIEW, Calif. (November 30, 2007) -- Google (NASDAQ: GOOG) announced today that it will apply to participate in the Federal Communications Commission's upcoming auction of wireless spectrum in the 700 megahertz (MHz) band.

As part of the nationally mandated transition to digital television, the 700 MHz spectrum auction -- which begins January 24, 2008 -- will free up spectrum airwaves for more efficient wireless Internet service for consumers. Advocacy by public interest groups and Google earlier this year helped ensure that regardless of which bidders win a key portion of the spectrum up for auction (the so-called "C Block"), they will be required to allow their users to download any software application they want on their mobile device, and to use any mobile devices they would like on that wireless network. The winner must ensure these rights for consumers if the reserve price of $4.6 billion for the C Block is met at auction.

"We believe it's important to put our money where our principles are," said Eric Schmidt, Chairman and CEO, Google. "Consumers deserve more competition and innovation than they have in today's wireless world. No matter which bidder ultimately prevails, the real winners of this auction are American consumers who likely will see more choices than ever before in how they access the Internet."

Schmidt also praised the leadership of FCC Chairman Kevin Martin and his fellow commissioners for adopting the new rights for consumers earlier this year.

Google's formal application to participate in the 700 MHz auction will be filed with the FCC on Monday, December 3, 2007 -- the required first step in the auction process. Google's application does not include any partners.

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Here's more from the Google blog post:

We already know that regardless of which bidders ultimately win the auction, consumers will be the real winners either way. This is because the eventual winner of a key portion of this spectrum will be required to give its customers the right to download any application they want on their mobile device, and the right to use any device they want on the network (assuming the C Block reserve price of $4.6 billion is met in the auction). That's meaningful progress in our ongoing efforts to help transform the relatively closed wireless world to be more like the open realm of the Internet.

Regardless of how the auction unfolds, we think it's important to put our money where our principles are. Consumers deserve more choices and more competition than they have in the wireless world today. And at a time when so many Americans don't have access to the Internet, this auction provides an unprecedented opportunity to bring the riches of the Net to more people.

Verizon Beefing Up 411

With help from CallGenie (see below), Verizon is introducing category search and concierge-like services to 411:

Callers who dial 411 typically want to get a phone number; however, for Pennsylvania callers, starting today there's more to this directory assistance service than phone listings.

Callers in Pennsylvania will now hear the following slightly expanded 411 greeting, which will allow them to ask for any one of several expanded services: "Verizon Nationwide 411. We provide listings, reverse number search and business categories. Say a city and state or say other 411 services."

This refers to the landline service, but it's also true of wireless.

Wireless 411 will need to evolve across the board along these lines in order to not be superseded by free 411 services. Preliminary survey results (now in the field) indicate that roughly 70% to 75% of users don't use free 411. This is basically about a lack of awareness of the free services. Hence Google's promotion of Goog411.

As users become aware of the free alternatives to traditional mobile 411 they invariably switch. But if traditional 411 can either introduce flat pricing (a la MetroPCS) and/or high-quality enhanced services they have a chance to hold on to many of their customers -- partly because of habit and inertia.

Update: Someone questioned whether there was any automation (via CallGenie) or whether it was all live ops. CallGenie had said to me that they were involved, but perhaps I wasn't clear about which program when I asked them.

Top U.S. Carriers by the Numbers

RCRWireless News (via ResourceShelf) has a nice chart showing top-level filings data for the top 10 U.S. wireless carriers:

• AT&T is the number one carrier with 65.7 million subs.
• Verizon, the number two carrier, has the lowest churn and the highest data plan ARPU at $10.59
• Sprint has the highest voice ARPU at $59

Will Apple Try to Become a Carrier?

Apple and Google have common leadership; Al Gore is on both boards and Google CEO Eric Schmidt is on Apple's board. But the two companies may face off in the upcoming 700MHz auction. I had forgotten that Apple had floated the idea of participating at one time and was reminded of that.

The possibility of Apple's participation, though unlikely, is in a way as provocative as Google's. If Apple were to participate or become an MVNO on Google's network, if the latter won the spectrum, would give consumers in the US open access to the iPhone. And apparently the AT&T-Apple five-year agreement doesn't preclude the possibility of Apple running its own network.

We'll know on Monday, the application deadline, whether Apple plans to bid.

Reflecting on This Year -- Briefly

This has been an amazing year for mobile if you think about it.

First there was iPhone in June, which represented a kind of "shot across the bow" for the industry. Then there was all the wrangling about the 700 mhz auction (coming in January), followed by Android and the Open Handset Alliance, and now Verizon's Open Access initiative. While there's now some reason for skepticism about what the Verizon announcement actually means -- we'll have to see next year -- it's indicative of where the industry is headed: toward greater openness and interoperability.

In addition there have been important moves from Microsoft (Tellme, Live Call 411, Live Search with embedded voice) and Yahoo!, with its big operator push for Go. AOL has also created a very nice application in MyMobile and promises to be very competitive in the arena. AT&T introduced 800-YellowPages and bought Ingenio, more recently. Superpages bought InfoSpace's local assets including the FindIt mobile application.

There's also a ton of stuff going on on the advertiser side with the major players already serving plenty of ads in mobile. And Google in particular has pushed most of its advertisers into mobile search results. And just yesterday the company introduced GPS-alternative "My Location."

When you look back it's been a remarkable year for mobile and 2008 promises to further accelerate the market.

3G iPhone Coming Soon

AT&T Chief Executive Officer Randall Stephenson said that a faster iPhone is coming next year (timing uncertain). AT&T's slow Edge Network has prompted some of the biggest complaints against the phone. But now a 3G version will be introduced:

"You'll have it next year,'' Stephenson said in response to a question about when the 3G iPhone would debut. He said he didn't know how much more the new version will cost than the existing model, which sells for $399. Apple Chief Executive Officer Steve Jobs ``will dictate what the price of the phone is,'' he said.

That would address what is arguably the biggest complaint against the iPhone. A price increase for the phone, however, would be a mistake for Apple.

This development was of course inevitable but the timing of the seemingly casual announcement, just before the holidays, is somewhat curious. If it trickles down to consumers, it might prompt some to wait before buying at a time when Apple hopes to sell lots of iPhones: for the holidays.

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Here's a related piece from CNET on how the iPhone faces a tougher market in Europe and isn't likely to sell as fast or do as well as it has in the US -- at least until the 3G version comes out.

Mobile Offers 'Second Bite at the Apple' for Newspapers

No pun there.

It's safe to say that, despite some impressive growth figures over the past year, most newspapers are still struggling to be competitive online. This is due partly to waiting so long to really take the Internet seriously and not devoting sufficient resources or creative thinking to the challenges it presented early enough. That's not true in every single case but it's largely true of the industry as a whole.

Mobile now offers an opportunity for newspapers to get out in front of the market and establish the kinds of relationships with mobile consumers they probably wish they had done more proactively online.

These thoughts were prompted by a briefing earlier today with Verve Wireless, which is working with and helping to "mobilize" newspapers. The company also works with local TV affiliates and radio. Verve is basically a hosted solution and mobile platform, which also offers ad serving and a national sales channel. The model is a rev share and the company brings national advertisers and sponsors to these pages, while the newspapers also can bring their advertisers as well. In addition to its technology and platform Verve is building a mobile network across these sites that offers content and location targeting for advertisers.

Here's an example link to the WAP site for the Miami Herald, which is hosted by Verve. I was told by Verve that despite the fact that the mobile property has not been promoted by the Miami Herald, traffic was growing organically and fairly quickly. This has been true across McClatchy mobile sites, all hosted by Verve Wireless.

While the site isn't revolutionary in terms of user experience, it presents the trusted newspaper brands and content in a form tailored for mobile distribution. We also talked during the briefing about the potential goldmine of "database driven" content, reviews, events, listings that newspapers have that would be valuable to end-users in mobile.

The analogy between the state of mobile and "the early days of the Internet" is a strong one, although there are some key differences. But getting out in front of mobile now gives newspapers a chance to rectify mistakes of the past.

WSJ: Google Will Bid for 700MHZ Licenses

While Google had previously gone on record as saying it would "probably" bid for 700 mhz wireless licenses in the forthcoming January auction, the WSJ this evening says that the company will now definitely file with the FCC on Monday, December 3, for the right to bid:

Google Inc. plans to announce Friday that it will apply to bid for wireless spectrum in a January Federal Communications Commission auction, according to people familiar with the matter.

The Mountain View, Calif., Internet company had previously said it would probably bid for spectrum, a chunk of the airwaves that can be used to provide mobile phone and Internet services. But some analysts had questioned whether such statements were just a negotiating tactic in Google's discussions with wireless carriers. The FCC has a Dec. 3 deadline for any parties to declare their intent to bid. A Google spokesman declined to comment.

As the article points out, Google may compete against wireless carriers (e.g. Verizon) and it may bring in a partner to bid along with it. If it were to bring in a partner that partner might be Clearwire, which was recently divorced from Sprint after the latter abandoned its short term plan to build a WiMax network.

If Google succeeds it could become a carrier itself or offer the spectrum to others who would operate on terms that are consistent with Google's desire for open networks. Google's participation in the auction (and potential success) -- the company has said it may bid $4.6 billion or more -- raises intriguing possibilities for the gPhone and for wireless broadband for both the desktop and mobile devices.