Google earmarks $4.6 billion for wireless bid, backs Ubiquisys

Updated

Google, seeking to extend Internet access to more people, which helps it make more money from its own services, made two big wireless announcements today.

It said it will bid at least $4.6 billion in an upcoming up-coming auction to operate a part of the wireless spectrum.

It also said it is leading a $25 million investment into a U.K company, Ubiquisys, which is developing hardware that lets cell phones run on home WiFi networks. In other words, it helps carriers move some of their data traffic away from their own cellular network, onto a home’s local area network, or the so-called “edge.” More on that in a second.

In explaining Google’s commitment for the wireless auction, Chris Sacca, head of Google’s wireless initiatives, complained that wireless spectrum for mobile phones and data is “controlled by a small group of companies, leaving consumers with very few service providers from which to choose.” The $4.6 billion, while it sounds a lot, may actually be low when compared to bids by others, he noted.

Last week, as the debate heated up around the FCC’s proposals about how to open up the 700 Mhz band of wireless, Google lobbied for the following points, all of which it said are necessary to shake up the staid wireless industry, bring choice to consumers, including lower prices:

* Open applications: consumers should be able to download and utilize any software applications, content, or services they desire;
* Open devices: consumers should be able to utilize their handheld communications device with whatever wireless network they prefer;
* Open services: third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
* Open networks: third parties (like Internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee’s wireless network.

As we understand it, at least, the third and fourth points above have not been guaranteed in the earliest drafts of proposals by the FCC on how to handle the spectrum being auctioned (See former FCC Chairman Reed Hundt’s column for VentureBeat earlier this week on this).

According to Sacca:

Why $4.6 billion? While we think that a robust and competitive auction based on these four principles will likely produce much higher bids, and we are eager to see a diverse set of bidders competing, $4.6 billion is the reserve price that FCC has proposed for the auction. With any concerns about revenue to the U.S. Treasury being satisfied, we hope the FCC can return its attention to adopting openness principles for the benefit of consumers.

Google’s backing of Ubiquisys, meanwhile, continues its efforts to support the extension of residential wireless access. Ubiquisys, based in Swindon, UK, makes so called femtocell access points for the residential market. Femtocell is a technology that will improve transmission of IPTV and high-bandwidth services. Wireless services would operate on local home networks, and be hooked up with the home’s land-lines or through VoIP using a home’s existing broadband connections. Carriers would sell the technology to consumers, pitching it as a way they can lower mobile subscription costs. According to a report from Dow Jones, Graham O’Keefe, a partner with Atlas, said the device sell for about $100-$150, and be brought to market in 2008. That’s a lot of money to ask consumers to fork out, though; its too early to know whether this will be compelling.

The investment is part of Ubiquisys’ second round of funding, the first being led by Accel Partners, Atlas Venture and Advent Venture Partners. The investors joined Google in this latest round.

According to the statement:

The Ubiquisys ZoneGate femtocell offers mobile users high-quality mobile coverage in the home using their usual 3G cell phones. The device plugs into an existing home broadband gateway or is built into a gateway product that includes WiFi, DSL, Ethernet, phone ports and USB.

‘Our mission is to empower mobile carriers to bring compelling service packages into homes using our ZoneGate solution,’ said Chris Gilbert, CEO Ubiquisys…In June 2007 ABI Research rated Ubiquisys number one femtocell vendor in a survey of the top ten players in the sector, based on product innovation and implementation.

The three-year-old company has now raised a total of $37 million.