In an open letter to the chairman of the USA Federal Communications Commission (FCC) Kevin J. Martin, Google pleas for openness in the recently ended (i..e, March 2008) auction for the 700 MHz;
1. Open Applications – users can gain access to and use any applications, services or content.
2. Open Devices – any device on any network.
3. Open Wholesale Services – Service Providers and Virtual Network Operators should get wholesale access to the 700 MHz based network(s) on reasonably non-discriminatory commercial terms.
4. Open Network Access – service provides and virtual network operators should be allowed to interconnect with the 700 MHz wireless network(s).
The two first points of Open Applications and Open Devices are in principle independent of the 700 Mhz auction, although they can of course be made mandatory in the particular auction requirements and ….. so they were.
The Open Wholesale Service point makes the mind bugle (well at least mine) while figuring out funny wholesale models that would be non-discriminatory to both the wireless operator (having invested in spectrum and network) and Googles-and-alike (GAAs … whomever other than Google that might be?). The biggest question for a network operator providing wholesale to GAAs is likely going to be how to get a piece of the Google advertisement revenue pie.
Within devices capabilities and network possibilities this does not sound like mission impossible. Obviously, if a wireless network is interconnected to the web (i.e., 4th requirement) services and application available in general to a device (pc, laptop, etc.) connected to the fixed internet would also be available to the mobile device.
However, there are particular services and applications that wireless operators might want to traffic control and manage. Particular in the case of having only an 11 MHz bandwidth available (i.e., USA nationwide C-band @ 700MHz) on the air-interface, heavy peer-2-peerk applications and streaming might result in severe congestion and loss of service quality. Thus, the ability to control and manage the Quality of Service per application / content category will be necessary in order to avoid that few heavy users jeopardize the service quality for the majority of average wireless users.
The wireless operator however should have no problems in complying with Google Point 1.
Open Devices – Open Networks
This requirement might appear harmless and not worth worrying about. In principle a user with a subscription and who pays the access price can have access to any network his device is capable of communicating with (not exactly true in most mobile standards, such as GSM and UMTS/HSPA, of today). Basically WiFi hotspot access comes closest to such a business principle and if the customer does not care about the mobile operator services and content this would suffice.
The mobile business model is (even technically) not build on principles of free access between wireless / mobile networks. A mobile subscription (post-paid or pre-paid) is associated with customer acquisition cost, often subsidising the user terminal. The subscription requires the customer to keep paying for a period of time to pay-back the upfront customer investment done by the mobile operator.
Allowing a business model were customers can freely roam/move across networks might require a different financing mechanism (or none) of the consumers device and access rights. As a service provider with whole-sale agreements with several wireless network operators could enable this for their customer base. For a traditional mobile operator such a model would not be very attractive unless national roaming is invoked due to lack of coverage in a given area.
The Google proposal is from a business model very interesting (altans likely disruptive) although would also require some rethinking of current mobile AAA (i.e., Authentication, Authorization, and Accounting) architecture.
Furthermore, one might fear that by moving to the proposed Google model, that few internet-based businesses would end-up “owning” the customer-data (g-search, gmail, g-chat, g-blog, g-msisdn, g-device, etc..), while the customer-data ownership is currently spread out across several mobile and fixed telecommunication business. The legacy mobile / wireless operator becomes a bit carrier paid by those few internet-based businesses.
Open Wholesale Services
For the Google business this is a really fun one to think about. How would that work for an entity as Google?, for which close to 100% of revenues comes from advertising (i.e., 2007-earnings shows that 98.91% of their $16.594 billion from advertising).
The value for Google going wireless is clearly from opening up a new channel for advertising. The growth potential entering the mobile channel is potential enormeous, with mobile penetration approaching 100% and even far beyond in many European markets (closer to 120%+).
Normal telecommunication wholesale models are based on volumetric usage (i.e., Minutes or Bytes). However Google would hardly trigger any direct volumetric usage with exception of the volume it takes to download google.com. Alas there might be a considerable traffic stream arising from YouTupe and some from gmail usage. Even following an advertising link will generate traffic although not necessarily generating much additional volumetric usage. Of course the question is how to distinguish between Google generated traffic and non-Google traffic?
Furthermore, the price per advertisement click that Google earns could be significantly different (i.e., higher) from the cost of the click according with a standard volumetric wholesale model. Furthermore, a different click might have different values but still generate the same volume and associated cost.
Maybe the wireless operator should not care too much how Google earns its money as long as the traffic generated by providing access to happy Googlers and GAAs are recovered by a healthy margin and does not jeopardize the quality of other customers.
Open Network Access
Yeah this sort of make sense …. without this the first three points become rather academic. There is no essential technical barriers for interconnect.