STL Partners

Telco 2.0 Growth & Innovation

Google anchors its carrier off the coast of Telcoland

So what's up with Google and the 700MHz spectrum? Well, Google has "pre-bid"-that is, declared its interest in bidding-for a large block of radio spectrum in the US's 700MHz ex-TV band. The big friendly search engine (or menacing, Orwellian data monster, depending on point of view) doesn't just want the spectrum for itself; it wants it to be sublicensed for public access.

Traditionally, the economic value of radio spectrum has been largely an economic rent, originating from the fact that licenses grant a monopoly of its use. No cash changes hands when the various unlicensed bands, such as the 2.4GHz swamp beloved of Wi-Fi users worldwide, are used; even though, of course, its use creates value for the user, this isn't accounted for.

So why would anyone want nonexclusive spectrum? Isn't it a contradiction in terms? And what does Google plan to do with it? Google, after all, is a model Telco 2.0 company, designed around the horizontalisation of the industry.

Members of our Executive Briefing Service and Dealing with Disruption stream can click here to read more.