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Wednesday, April 16, 2008 10:20 AM/EST

Politicos Feel Used by Google in Spectrum Auction

 

U.S. representatives feel that they let Google manipulate the 700MHz spectrum auction.

Electronista and other blogs are reporting that three U.S. representatives lamented the fact that Google bid for 700MHz spectrum to ensure the winner must open up access to all devices and applications.

Republicans Cliff Stearns and John Shimkus and Democrat Eliot Engel complained in a hearing on Capitol Hill that Google's $4.6 billion bid for spectrum deterred other bidders.

"I suspect that if Google had been interested in more than just maneuvering within the system it could have prevailed in the C block and become a new [wireless] entrant. I suppose we cannot blame them for trying to get free access to the spectrum; what is more concerning is that, even though we knew what they were doing, we let them maneuver this way anyway," said Stearns, R-Fla.

This is a strange complaint. Stearns feels the government was used by Google to loosen up the rules around spectrum access.

So what? What Google did, which it doesn't deny, was a good thing. If spectrum access was freed up in the first place, perhaps Google wouldn't have to effect change in the auction. Moreover, Google was prepared to purchase the spectrum, so it wasn't going to be a deadbeat.

Google told me this in response, and I agree: "Consumers were the big winner in the auction, not any company. This auction generated not only a record amount for the U.S. treasury, but also historic new rights for wireless consumers as a direct result of Google's bidding."

Don't enable free competition, which is a banner of capitalism, and then complain about the way in which it was provided. It's a petty argument reserved for traditionalists who grudgingly grant change only to act like a sore loser after the fact.

Don't make Google the bully when the FCC typically bullies every company that needs something from them. If there are any bullies here, they are Verizon or AT&T, which initially opposed Google bidding for spectrum to preserve their fragile markets.

Shame on you for tainting a democratic process. And if the majority of House reps really feel like they were slighted, they need to lobby for restrictions in the auction process.

 

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Comments (4)

Nick Woodson :

I agree that it's puzzling especially in view of the fact that most companies manipulate to gain a monopoly. I think that our politicains need to go back to school and learn what competition is. Last I checked, it isn't 'just give the big guys what they want and nobody gets hurt'.

anySmarterIdRunLinux :

Entrepreneurs acting more efficiently than government? Please. Never.

The gov't knew what Google was doing, and wasn't even efficient enough to put up a roadblock. Can't wait until they manage health care.

Lou :

I applaud Google. As ordinary citzens we are at the mercy of ever larger corporations that control many aspects of every day life. If congressman listened to those whom they represent and not the lobbyists this country would indeed be a far better place. We need open access and Bravo to Google for making it happen.

Barry Williams :

I agree with the commentary. I equate this to the interference of the DOJ in the proposed merger of XM and Sirius.

The idiotic idea was that competitiveness would be hampered and that a monopoly would ensue. In fact, without the merger, one of the companies was going to go bankrupt thus leaving only one company anyway!

Also, it's not like satellite radio is exactly a necessity. I could understand if it would have created a company that would control 90% of the market in a sector where the product is essential to the functioning of modern society: for example Microsoft or maybe an oil company.

I am sure the stockholders of XM and Sirius breathed a collective sigh of relief when the merger was finally allowed by the DOJ.

I will posit, however, that the combined company is likely to be weak because of the incredibly high prices the two companies have paid for various properties many of which have failed to boost revenue: particularly Howard Stern.

I think that the combined company WILL file for bankruptcy if it can't unload some of these onerous deals. I for one will only short sell the stock of the combined company.

Beyond this digression, I am glad that the management of Google is taking an activist posture. The simply VAPID complaint that Google manipulated the market indicates that those complaining just don't get it as is the case of most in government: example, ethanol.

One way or another, the spectrum would have sold for what it sold for. The idea that smaller players were locked out is really immature and silly. That thinking makes it apparent that many in government think that business, in general, is in business for the purpose of social engineering (a liberal view) and that every action should be guided by some higher moral purpose that insures the little guy gets a chance to be big or some other socially responsible purpose. Hogwash!

Business is conducted for the purpose of making money. Any other purpose won't lead to the prosperity of society at large. If you can't believe this, I urge you to research the Marx-Lenin model that has failed so miserably in Russia, China and most pointedly, North Korea. The former two have abandoned the model but they still struggle with autocratic governments.

Let's not forget that the French tried to nationalize most large industry and failed miserably. Eventually, the French government recognized the mistake and started to divest the government of its holdings. The French economy still suffers to this day.

Hugo Chavez is trying to do the same in Venezuela by nationalizing the oil industry. The result has been that there is no investment by foreign companies and the oil-producing infrastructure is starting to break down. He won't last much longer.

I observe that Google operated within the free-market framework to the benefit of everyone. Congress needs to butt out and pay closer attention to the real problems instead of wasting time and energy on ridiculous hearings on such things as steroid use by adults in major-league sports.

I feel that the government officials in congress fiddled while Rome (the mortgage lending industry) burned. They collectively have drunk the ethanol "kool-aid" and have continued to squander legislative energy with partisan infighting. But I digress . . . again.

I for one appreciate Google's actions. I wish more companies could find a way to be socially active and profitable at the same time. However, I abhor the idea if forcing companies to adopt behavior that would please the social activists and Luddites at the expense of business owners and stockholders.

If given a chance, the free market model will produce the best overall result.

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