I just re-read this recent post from the Google Public Policy Blog, and I still think it’s a lot of pie-in-the-sky nonsense. It really feels as though whoever wrote it either doesn’t know enough about the subject or has dumbed it down for readers to the extent that it makes no sense. Although the example cited is apparently real, the model described is far more complicated than it at first seems, and the chances of it being implemented on any large scale are virtually zero.

When I first saw the headline, “What if you could own your broadband connection?” I assumed that it was going to be about Google’s plans for wireless services - a little late perhaps given that they failed to secure any licences in the 700MHz auction, but it would have been interesting as an academic exercise. But no, it turns out they’re talking about fiber connections:

It may sound strange, and it’s certainly not what we’re used to. Today we have a “carrier-centered” model; phone and cable companies spend billions to build, operate, and own the “last-mile” connection — the copper, cable, or fiber wires that come into your house. Individual consumers then pay for particular services, like phone service or Internet access.

In turn, we tend to think about broadband deployment in carrier-centric ways. If we want to see super-fast fiber connections rolled out to consumers, the main question appears to be whether carriers have appropriate incentives to invest.

But there’s no law of nature that says this is the only possible model. Many businesses, governments, universities, and other entities already own their own fiber connections, rather than leasing access to lines. It may also be possible to find ways for consumers to purchase their own last-mile strands of fiber.

Here, as anywhere, there would be certain advantages that come with ownership over renting. No one necessarily needs to own skis or a car, but many of us do. If you owned your own fiber, you’d be able to connect it to a service provider of your own choosing. Over time, you might save money, and it could make your house more valuable to have a fiber “tail.”

I think the examples used are disingenuous - fiber cables owned by businesses or universities are often for private networks, whereas the whole point of a broadband connection is connecting to the public Internet. Even where Internet access is “owned” by someone other than the carrier, that makes no sense until you put equipment at both ends which allows the cable to be more than just a piece of hardware. And you need a carrier willing to both connect to the business end and to provide you with the appropriate equipment at your end to make that cable work. And of course, the cable itself just connects you to the carrier, which still connects you to the Internet, so they still own the vital connection even if you own the piece of string between your place and theirs. You therefore have no more real ownership over the key piece of the puzzle than you do today.

Then there are all the technical issues involved with maintaining and fixing such a cable. Even if you can get a service provider to hook you up to the Internet, you still own the last mile, and would be responsible for fixing it if something went wrong. Your service goes out - how do you figure out where it’s broken? If it’s someone digging up the road, how do they know who to notify before they do so? And how do you exercise any authority over them to get them to fix it quickly? What if something else goes wrong? Who’s going to fix it for you? Certainly not the local service provider you’ve deliberately bypassed…

I could go on and on - only three commenters have bothered so far on the post itself, so it seems most people haven’t taken it too seriously. But this feels like another one of those occasions on which someone has over-simplified a complex situation in a way that says, “now why in the world do we do this the way we do? Look how easy it would be to do it differently - and better! More freedom! More control for customers!” and so on. It’s also a favorite tool of politicians selling quick fixes to intractable problems usually caused by other politicians…

Ironically, I think there’s a lot more potential for the kind of model the Google blogger is talking about in the wireless sphere. There, no cables are necessary so ownership is a non-issue. It really is about simply having the right hardware at your end and a provider willing to hook you up at the other. With multiple wireless providers being able to serve the same area without digging up the streets there’s potential for real competition with none of the hassles associated with a wired local access network. You’re still going to need a service provider to hook you up unless you’re willing to become an Internet node in your own right. But there is at least the potential for greater competition and more choices for consumers.

Google, of course, merely participated in the 700MHz to try to force the existing carriers to create this kind of model, backing out of the bidding themselves when they thought they’d achieved their aims (possibly erroneously). Perhaps if they’d stayed in they’d have been able to make this kind of model a reality.

Interesting news today on Verizon’s approach to the open access requirements associated with the 700MHz spectrum it won in the recent auction:

On Friday, Google urged the FCC to block Verizon Wireless’ $4.7 bil. successful bid for the C Block band of spectrum in the recently completed 700 MHz auction unless Verizon is forced to agree that open access rules apply to handsets it provides its own customers. Specifically, Google claims that Verizon Wireless has no intention of abiding by the open access rules governing the C block spectrum for devices it gives to its own customers and that the FCC should condition Verizon’s grant upon a clear commitment that Verizon will not exclude these handsets from the requirement.

This echoes in reality what I had said might happen in a previous post a few weeks ago:

…isn’t Google mistaken here? Is it assuming that the FCC’s open access rules go further than what Verizon Wireless had already agreed to do? The FCC’s rules are unfortunately vague, and it may be counting on a more favorable interpretation of them than Verizon is.

Google and Verizon have had conflicting opinions on the meaning of the FCC’s open access requirements - each taking the position that most clearly reflected its own views - Google’s being the most expansive interpretation possible, and Verizon’s being the most minimalist. However, in my previous post, I pointed out that even though the rules are vague, they certainly strongly suggest that Verizon will have to go beyond its existing open access project. For example:

Wireless service providers subject to this requirement will not be allowed to disable features or functionality in handsets where such action is not related to reasonable network management and protection, or compliance with applicable regulatory requirements. For example, providers may not “lock” handsets to prevent their transfer from one system to another. We also prohibit standards that block Wi-Fi access, MP3 playback ringtone capability, or other services that compete with wireless service providers’ own offerings. [emphasis mine]

At any rate, looks like we’re in for more fun and games, and more uncertainty for Verizon and its customers. Not what anyone would have wanted, and it could all have been avoided if the FCC had just been clearer about these requirements up front. Verizon can now reasonably argue that it bid based on its understanding of these rules and it’s too late to change that understanding now.

Rick Whitt of Google has come clean about its strategy in the 700MHz auction and confirmed what many suspected - that Google deliberately bid up the price of the C Block, even upping its own bid in the absence of a higher competing bid several times, in order to trigger the open access provisions.

Given that it must have been fairly clear early on that Verizon Wireless was the other bidder, and it’s already initiated its open access program, what did Google really gain by doing this, other than using its own cash to force Verizon to part with more of its money? One of three scenarios must hold true:

1. Google wasn’t sure Verizon was the other bidder and wanted to make sure any other bidder (AT&T) would be subject to open access too
2. Google merely wanted to force Verizon to pay more for the spectrum because there weren’t any other serious bidders for it
3. Google believes that the open access provisions attached to the C Block will require more of Verizon than it has already announced it will provide.

The most likely scenario is 3. But isn’t Google mistaken here? Is it assuming that the FCC’s open access rules go further than what Verizon Wireless had already agreed to do? The FCC’s rules (see page 89) are unfortunately vague, and it may be counting on a more favorable interpretation of them than Verizon is. But there are one or two areas where Verizon has not yet agreed to go as far as it will now be required to:

Scope of the requirement for open platforms for devices and applications. Wireless service providers subject to this requirement will not be allowed to disable features or functionality in handsets where such action is not related to reasonable network management and protection, or compliance with applicable regulatory requirements. For example, providers may not “lock” handsets to prevent their transfer from one system to another. We also prohibit standards that block Wi-Fi access, MP3 playback ringtone capability, or other services that compete with wireless service providers’ own offerings. Standards for third-party applications or devices that are more stringent than those used by the provider itself would likewise be prohibited. In addition, C Block licensees cannot exclude applications or devices solely on the basis that such applications or devices would unreasonably increase bandwidth demands. We anticipate that demand can be adequately managed through feasible facility improvements or technology-neutral capacity pricing that does not discriminate against subscribers using third-party devices or applications. In that regard, we emphasize that C Block licensees may not impose any additional discriminatory charges (one-time or recurring) or conditions on customers who seek to use devices or applications outside of those provided by the licensee. Finally, C Block licensees may not deny access to a customer’s device solely because that device makes use of other wireless spectrum bands, such as cellular or PCS spectrum. However, we also note that, in accepting a multi-band device for use on its network, a C Block licensee is not required to extend the requirement for open platforms for devices and applications to other spectrum bands on which the provider operates.

However, the FCC goes on to limit the scope of these rules:

We emphasize that we are not requiring wireless service providers to allow the unrestricted use of any devices or applications on their networks. In particular, we are mindful of the risks network operators face in protecting against harmful devices and malicious software. Wireless service providers may continue to use their own certification standards and processes to approve use of devices and applications on their networks so long as those standards are confined to reasonable network management. For example, providers are free to choose their air interface technology, and to deny service to devices or applications that cannot operate on the same technology, since such a restriction permits significant network efficiencies without significantly reducing consumer access to services and features. We also recognize that wireless providers have legitimate technical reasons to restrict particular non-carrier devices and applications on their networks, specifically to ensure the safety and integrity of their networks. In particular, we believe that it is reasonable for wireless service providers to maintain network control features that permit dynamic management of network operations, including the management of devices operating on the network, and to restrict use of the network to devices compatible with these network control features. Standards to ensure that network performance will not be significantly degraded would also be appropriate.

If I were Verizon, I would be pretty annoyed with Google at this point, whatever its rationale. It artificially bid up the price of the spectrum, triggering both a higher price paid by Verizon and the open access requirements, even though it apparently never had any plans to own the spectrum. I’m not sure it would have any legal grounds for taking action on this, but it certainly appears that Google abused the system for its own advantage and to Verizon’s disadvantage.

At any rate, Verizon is pressing ahead with its plans to use the 700MHz spectrum for its LTE network, as is AT&T with its 700MHz spectrum, and so far it isn’t complaining too hard about those open access rules. Since it has done an about face on the question of “openness” perhaps it is willing to embrace these additional conditions too. But I would guess that it will fight for the loosest possible interpretation of the remaining conditions when the time comes, while Google will probably put some high-paid lawyers on the other side.