Online giants prefer NN free lunch to the costs of broadband competition

Investors Business Daily reported today that it appears that Google and Yahoo have decided to pass on bidding for the next big FCC auction of wireless airwaves on August 9th.

It is interesting to note that Google may have a back door interest in this wireless auction because they have an investment in Current Technologies, a broadband over powerlines provider owned by privately held Current Group, which does plan to bid on the auction.

It is comical that the online giants: Google, Microsoft, Yahoo, eBay, and Amazon claim “market failure� and that broadband market is a dreaded “broadband duopoly� in need of regulation -- and yet when they are given a prime “free and open� competitive opportunity to buy spectrum to offer broadband themselves, they are declining. How can it be a duopoly when they are free and able to buy prime national broadband spectrum? When they can offer WiFi like Google plans in San Fran? When Google can invest in broadband over powerlines? When they could work with wireless broadband competitors? When they could work with Clearwire? (which Intel just invested $600m in, and whose CEO is on Google’s board.) Stop whining and start competing!

What this is really about is the online giants preferring a free lunch of government regulated bandwidth rather than having to spend money on broadband facilities like their broadband competitors must. Oh but that would lower these companies 80-90% gross profit margins! Can’t have that! It's much cheaper and self serving to regulate your competitors and shift most all your distribution costs to your competitors and the customer.

These companies are advocating an old fashioned industrial policy where the government regulates the competitive broadband sector to protect the online sector from new competition. This is corporate welfare for dotcom billionaires.