Hold The Phone!

Rodney explains why it doesn’t to us.

Everybody reading this should be familiar with the FCC's 2008 700MHz spectrum auction for Internet use. The spectrum is now available due to TVs recent move to HD.

The big bidders were AT&T, Verizon, Google, a Craig McCaw group and a regional bid by Cablevision for metro NYC.

Prior to the auction, Google won a government ruling that if a bid of at least $4B came in through the auction, it was in the best interest of all users of the spectrum (customers), to be able to change their web access provider at a moments notice. That means a tool on a consumer's web enabled device (smart phone or computer) could continuously search for the best access price and always connect customers at the lowest cost available, which might even be free. That ruling is currently being challenged by CTIA (The Wireless Association) for obvious reasons. 

The technology now exists and is waiting to be unleashed to provide omnipresent internet access at substantially higher speeds, 50-100x faster than current speeds. This will enable a lot of magical things to happen, particularly as it pertains to two-way, real time video communication.

Independent of the new spectrum yet to be unleashed, you have the rise of the smart phone, which is running on slow 3G speeds right now. But it's easy to imagine the capabilities at 100x faster speeds, that are everywhere and always on. 

Smart phones will be the number one way US consumers access the web by the end of 2010. The math is very easy. Cell phones outnumber computers 3 to 1. Smart phone penetration is already in the double digits and only needs to equal 34% of all wireless phones to surpass computers. Best Buy conducted a survey in 2009 that found 40% of all non-smart phone customers intend to purchase one within the next year. Combine that with the fact that wireless phones by their nature have a much greater incidence of use than a computer, as they're always on and always with consumers. 

Additionally, smart phones are WAP enabled. They don't have to use a cellular signal to operate. They can run off of the wireless internet. The only current limitation for a smart phone to circumvent the wireless phone spectrum via VOIP based calling is that wireless internet access isn't omnipresent with a single access connection.

What all this is leading to is a new playing field where Web enabled wireless tools will replace activities traditionally done by phones, computers, televisions, radios and more. 

Google excels in the Web. That's all they're thinking about. That's why they;
1) bid on the 700 MHz spectrum 
2) bought youtube 
3) are getting into the "phone" business.

When will the government choose to unleash the new spectrum? It could be awhile as there a economic ramifications to it's release. When it is released, Google is prepared to compete and win.

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