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Undermining the wireless walls - August 2, 2007

On second thought, maybe Google did get all it wanted out of the FCC auction rules.

It's off the hook for putting up the $4.6 billion it promised to bid if the FCC met all four of its conditions, and if it doesn't bid it's off the hook for the billions more it would have to spend to actually build a wireless network. Yet its widely publicized offer provided a significant jolt to the "open access" meme both in Washington, DC and the marketplace.

Both Congress and the FCC are now on record favoring at least some degree of openness in wireless networks.

Today's Wall Street Journal has a Page One story about Google's discussions with existing wireless carriers regarding a customized cell phone that would be tailored to support a variety of Google-supplied applications. After their experience with the auction rules, the carriers may decide they'd rather keep Google close, by doing a deal, than face it as a competitor.

The Journal also has a story today about the widening cracks in the wireless companies "walled gardens," as everyone from Microsoft, to Opera, to Yahoo! is looking to embed mobile-tailored applications in future wireless devices.

All of this, of course, comes in the wake of Apple's iPhone, which established the precedent for an entertainment service vendor to have an ongoing relationship with end users without going through a wireless gatekeeper.

The wireless carriers will, of course, fight this trend fiercely. But the ground is shifting under their feet.

Evolving consumer expectations--as well as changing regulatory attitudes--may eventually do Google's work for it. And at a far-lower cost.

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