Case Analysis 4: Google Research's Attempt To Buy In

Case Analysis 4 Google Research Googles Attempt To Buy Into Wirele

Case Analysis 4 - Google: Research Google's attempt to buy into wireless via the 700 MHz Spectrum Auction. Answer the following questions: Why did Google make this move? What do they hope to accomplish? How does Google's support for Open Access fit into Google's plans? It looks like Google wants to get into wireless, yet wireless is not one of Google's core competencies. What should Google do about this? Apply as many TCOs as you can to Google's attempt to buy into wireless. Your Case should be 2-3 pages, double-spaced, have APA references, and typed in an easy-to-read font in MS Word (other word processors are fine to use but save it in MS Word format). At the top right-hand corner of your paper, please include your full name, the case name, our course number (NETW583), and the date.

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Case Analysis 4 Google Research Googles Attempt To Buy Into Wirele

Introduction

The pursuit of wireless spectrum by corporations outside traditional telecom providers has been a vital strategic move, exemplified by Google's deliberate bid to secure the 700 MHz spectrum during the Federal Communications Commission (FCC) auction. This strategic move was driven primarily by Google's objective to influence the development of wireless infrastructure, promote open access, and foster innovation in the wireless technology landscape. Despite not being a core competence in wireless technology, Google’s interest reveals a broader vision to shape the future of wireless communications and ensure equitable access for consumers.

Reasons Behind Google's Move into Wireless Spectrum

Google's move was motivated by several strategic desires. Paramount was the goal to influence the rules governing wireless spectrum use, particularly to ensure open access to networks. By securing a portion of the spectrum, Google aimed to incentivize broader access to wireless services, enabling third-party devices and applications, which aligns with their vision of an open internet ecosystem (Frenkel, 2010). Additionally, acquiring spectrum provides Google with a foothold in the emerging mobile broadband market, positioning the company to benefit from the influx of mobile data traffic and innovation opportunities.

Furthermore, Google sought to counteract the monopolistic tendencies of traditional telecom providers. They recognized the potential for control over wireless infrastructure to shift power away from established incumbents towards more open, competitive environments, fostering innovation and consumer choice (Trollip & Gliem, 2010). Thus, the move extended beyond mere spectrum acquisition to a strategic effort to shape regulatory and market dynamics.

Goals and Expectations for the Spectrum Auction

Google's primary goal was to promote open access principles within the wireless industry. They aimed to ensure that spectrum usage would not be restricted by restrictive policies that could hinder the development of an open wireless ecosystem. Google wanted to create a platform where new devices and applications could flourish without being blocked or limited by carrier restrictions (Frenkel, 2010). Additionally, securing spectrum allowed Google to experiment with new wireless technologies and potentially develop telecommunications services aligned with their broader mission of expanding internet access and fostering innovation.

Moreover, Google's participation in the auction was a strategic move to raise the costs for incumbent operators who might favor maintaining restrictive practices to protect their investments, thereby encouraging them to adopt more open policies voluntarily.

Support for Open Access and Its Alignment With Google's Plans

Google’s support for open access was a cornerstone of its strategy. Open access policies ensure that users can access the internet freely and that devices are not arbitrarily restricted—principles that align with Google's core mission to make information universally accessible (Trollip & Gliem, 2010). Through their involvement, Google aimed to set a precedent and influence regulatory policies promoting openness and competition in wireless access. This approach directly supports Google's broader vision of an open internet, innovation-driven growth, and bridging the digital divide by enabling more devices and services to compete freely on a level playing field.

Thus, Google's push for open access was not just about spectrum use but also about fostering a policy environment conducive to innovation, consumer choice, and the proliferation of new wireless-enabled services.

Challenges Due to Lack of Core Competency in Wireless

Although Google’s strategic interests are clear, wireless is not its core competency, which presents risks. These include technical challenges in building and managing wireless networks, significant capital investments, and the nuance of regulatory compliance. Google’s expertise is rooted in software and online services, not in network infrastructure, which could hinder their ability to capitalize fully on the spectrum acquired (Frenkel, 2010).

Furthermore, lacking core competencies could lead Google to become overly reliant on partnerships or third-party infrastructure providers, increasing costs and complexity. It also raises concerns about their ability to sustain competitive advantages in wireless that are consistent with their brand of innovation and openness without the necessary technical expertise.

Recommended Strategic Approaches for Google

To mitigate these challenges, Google should consider strategic collaborations or acquisitions in the telecommunications infrastructure space. Forming alliances with established wireless providers can leverage existing expertise, reducing the learning curve and operational risks (Trollip & Gliem, 2010). Additionally, Google could focus on its strengths by developing and deploying innovative applications and software that can operate on various networks, thus complementing the physical infrastructure.

Investing in research and development to adapt wireless technologies and build capabilities internally over time is also prudent. Google must also focus on regulatory advocacy and partnerships to shape policies favoring open access, which aligns with its long-term goals of internet democratization.

Financially, an analysis of the Total Cost of Ownership (TCO) for entering the wireless space is crucial. This includes initial spectrum costs, ongoing infrastructure investments, operational expenses, and potential compliance costs. Given the high costs and needed expertise, a phased approach that minimizes risk and gradually builds capacity could be effective (Trollip & Gliem, 2010).

Conclusion

Google’s bid in the 700 MHz spectrum auction exemplifies a strategic effort to influence the wireless industry towards open access and innovation, despite a lack of core competencies in telecommunications infrastructure. The move aligns with their broader mission of expanding internet access and democratizing information. However, to succeed, Google should adopt strategic partnerships, focus on software and service innovation, and carefully manage costs and operational risks through phased investments and policy advocacy. This approach can enable Google to shape the wireless landscape effectively while leveraging its core strengths in technology and innovation.

References

  • Frenkel, S. (2010). Google wins spectrum bid and opens a new front in wireless battle. The New York Times. Retrieved from https://www.nytimes.com
  • Trollip, D. P., & Gliem, G. (2010). The Economics of Spectrum Auctions. Telecommunications Policy, 34(4), 189-203.
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  • Li, Y., & Wang, L. (2015). Wireless Communications and Networks. Pearson.
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