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Case Analysis 4

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1. Why did Google make this move? What do they hope to accomplish?
Congress had mandated the airwaves in the 700MHz band be vacated in February 2009, forcing analog TV broadcasters off those channels as part of a long-anticipated switch to all-digital television. The bid done four years ago offered free wireless broadband access using that spectrum with inherent physical properties, which allow signals to travel farther and more easily penetrate walls, and Comcast and Verizon claiming that it was “unfair competition” and that cities would be violating their commitments to offer local monopolies to these companies opposed it.
While Google's entrance was likely to turn the wireless world upside-down, market disruption is not its motivation. Google's priority as a public company is to make a profit; having a Google-branded wireless service would attract a good deal more eyeballs to its ad-based services. And mobile, in some ways, is particularly fruitful for advertising. Owning the spectrum would gave Google an advantage in local advertising, which is tailor-made for mobile use as people look for nearby restaurants, gas stations, or copy shops, and would also gave Google a boost in international markets.
Google has managed to turn Web search into a billionaire business on PCs by selling simple text ads that appear with search results. Imagine how lucrative that market will be when the ads, including local advertising, can get to the far reaches of the world where there aren't any PCs.
Google’s vision is to have mobile-phone service offered free of monthly charges to consumers willing to put up with advertising.
In essence, Google could control the direction of the next-generation wireless network controlling the Internet experience on the devices and how much people would pay, or not pay, for the services. "Imagine an iPhone where the whole thing is a screen and the bottom eighth is banner ads running across," said Iain Gillott, a wireless analyst at IGR. “Spectrum is king; you own everything.”
Particularly, I’m not enjoying the stranglehold companies such as AT&T, Sprint, Verizon, and T-Mobile have had on the market. The infrastructure already exists in the 700-MHz spectrum, and Google could set its own wireless network for that spectrum on its own, or partner with others to build and operate such a network.

2. How does Google's support for Open Access fit into Google's plans?
Google executives said their aim was to bring the PC-style of Internet openness to the mobile world so that users had more choice in mobile services and applications, as well as price. Google’s support to Open Access was what really made this a popular decision.
The access to world-class information is possible because of the openness of the Internet. Any entrepreneur with an idea has always been able to create a website and share their ideas globally, without paying extra tolls to have their content seen by other users.
Google was instrumental in getting the FCC to adopt so-called “open access rules” that would ensure consumers could use any mobile device they choose on a large chunk of the 700MHz spectrum (analog television band). Verizon is rolling out its 4G network under openness license conditions that Google helped persuade the FCC to adopt.
Google could get into the mobile market without having to actually build and operate a network. Broadcast companies would have much more flexibility in creating business models that use spectrum that used to belong to them in the first place.

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