Google to Bid on 700 MHz Spectrum

While it is not really a surprise at this point, Google will be bidding on the 700 MHz spectrum auction and if the company wins, it will likely change the business model of many other service providers. The reason is simple. At least one service provider has expressed interest in leveraging their connections as a competitive weapon/advantage and more specifically as a way to exact a toll from Google!
As you may remember I referred to this situation in an article titled SBC Goes Trick-or-Treating which took an excerpt from a BusinessWeek article referring to an interview with SBC CEO Ed Whitacre*:

The question posed was:
How concerned are you about Internet upstarts like Google, MSN, Vonage, and others?
And the answer was as follows:
How do you think they’re going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I isn’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes?
The Internet can’t be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!
Google will likely ensure their “pipes” are open and anyone will be able to use them without fear of being taxed, etc. But more importantly it seems Google will be the company ensuring that if other service providers close their pipes, someone with open pipes will be available to choose from.
*Ed Whitacre has retired after successfully acquiring AT&T and changing the name of the new company to AT&T.

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