Tim Wu had a great analysis in Slate.com recently about Google's new Open Handset Alliance and how they're locked in a potentially zero-sum tussle with the vestiges of Ma Bell in the form of AT&T and Verizon. But before reading the excerpt below, have a look at the video explaining what Android is all about.

Here's the excerpt:

In Google's words, its recently unveiled "Android" is the "first truly open and comprehensive platform for mobile devices." But it is a signal of much more. Google is as much an ideology as a firm and can resemble a nation-state in its pursuit of power rather than a mere corporation chasing quarterly numbers. Google and its allies are now trying to make the principles of openness—the commanding ideology of the Internet—the conquering principle of the wireless world, and the Android announcement is just the first step.

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Last week Google's CEO Eric Schmidt wrote to the Kevin Martin, Chairman of the FCC saying that they would bid a minimum of $4.6 billion if certain open platform conditions were included in the auction award.

But there are a couple of billion other reasons why Google prefers the 700 MHz spectrum.

The 700 MHz mobile network would be inexpensive to build compared to any other alternatives - GigaOM says:

"...The spectrum, currently owned by broadcasters, has been used for analog television. But it is set to be turned over to the government in 2009. Due to its broadcast-attractive physics (like its ability to penetrate walls), this spectrum is desirable for both broadband communications in general and public-safety uses in particular.

Also, a 700 MHz mobile network would be relatively inexpensive to build compared to the alternatives:

"...According to some estimates, the cost of building a nationwide wireless network over the 700 MHz spectrum is around $2 billion versus a nationwide 1900MHz PCS that costs approximately $4 Billion. The costs are lower in rural areas, due to less interference issues and wide-open spaces. That's because each tower broadcasting at 700MHz covers twice as many square miles. Some estimates say that a single 700 MHz tower can cover 20-miles. (#)(read more)

The fundamental weaknesses of an integrated value chain like the one that exists between iTunes and Apple's iPod products and, now, the iPhone, is that even the most fawning of customers inherently rebel - some in the form of hacking the system - against such a compulsion against consumer choice. Today, in the face of growing hegemonic power in realms expanding from media to telecommunications with last Friday's iPhone launch, those same hackers are trying to disintegrate that value chain for themselves, attempting to rid the revolutionary new device from the grip of AT&T's last generation data network.

What defines value for Apple's customers? Well, in addition to the innovation in user experience and design packed into every one of its products, Apple's brand itself is as much the performance defining characteristic that draws legions of loyal buyers to iconic products like the iPhone.

But even as the company protects its inherent advantage by erecting barriers to competition in its value chain, that same source of strength can become the company's greatest weakness. Just as Apple's hegemony in the digital music distribution business has been based on the inseparable linkage between iTunes and the company's iPod media players, the integration between the new iPhone and the AT&T network as the sole wireless carrier presents a target for disintegration that hackers have found hard to resist. What's at stake is nothing less than Apple's compelling value proposition itself - its formidable proprietary product linkages.(read more)

The question has been answered at last, Which of these Companies will be Among Those Awarded Part or All of the GSA Networx Enterprise Contract? The answer is, all of them. On Thursday, May 31st GSA awarded AT&T, Level 3, Qwest, Sprint Nextel, and Verizon availability to bid for domestic contracts worth up to $20 billion over the next 10 years.

Congratulations by the way go to Ulrich Tibaut Houzanme for being the "most correct" in his predictions with a total upside gain of $328.56 in the market we set up at Inkling - you're the proud new owner of the new Apple Video iPod we said we'd give away as the bounty for participating. For those of you who didn't get in on the action this time around, we'll be doing this again, so watch the newsletter for more details about future markets we're running. But first, a bit of analysis...(read more)

Following last week's outage of RIM's BlackBerry service, many in business and government alike (that's Karl Rove and Company at right) are starting to wonder if their dependency on the device with such a soft underbelly (according to competitors) is such a good idea.

"The NOC-centric nature of RIM's solution has always been a target of its competitors in the past, but usually the competitive message has been FUD [fear, uncertainty, and doubt] around security ('Do you REALLY want your data flowing through someone else's system?')," explained Avi Greengart, principal analyst for mobile devices at Current Analysis. "NOC service outages are a huge gift to competitors' marketing departments, because service outages are real -- end users feel those."

Russell Shaw on the BlackBerry Beat gave a failing grade to carriers as well:

There were some bright points, but all in all I was not pleased with the information flow and presentation.

First, let us discuss how each major U.S.-based BlackBerry carrier conveyed this data when I called them.

T-Mobile and SprintNextel did best. As soon as I called the T-Mobile trouble line, I was greeted with a newly updated recording. Same when I called "611" from my Nextel BlackBerry.(read more)

The stock chart above compares an even more interesting set of potential futures for our four intrepid competitors (plus one) - for the five competitors now positioning for the next round of contract awards, supposedly coming in May - the GSA Networx Enterprise contract, which also includes a team led by Level 3 Communications in addition to the four bidders for the Universal contract.

So seeing the news this morning, I thought it'd be fun to run a Prediction Market on which of the five companies above would be the biggest winner in the GSA Networx Enterprise contract, which is supposed to be awarded in May. I set it up at Inkling and the feed from their site should be depicted above so please setup a username on InklingMarkets.com and then give us your opinion on whom you think will come out the winner in May.(read more)

 

News came in this morning that the world's largest telephone bill (the one for the U.S. Government) will be split between three companies - AT&T, Verizon and Qwest - but the most conspicuous snub came for Sprint, which GovExec details well in the excerpt below:

"Award of the Networx Universal contracts is a historic moment at GSA, and reflects our goal of providing transformational products and services to our federal customers at the best prices available in the marketplace," said GSA Administrator Lurita Doan. "I look forward to working with our new industry partners to provide the best possible service and value to our customer agencies and the American taxpayer."

Networx Universal will provide voice, IP, wireless, satellite and IP-centric services to 135 federal agencies at locations spanning 191 countries, and is expected to transform the current federal telecommunications system.

Sprint, which currently supplies about 30 percent of all government telecommunications services, was shut out of the new contract. The company's federal branch serves the Defense, Homeland Security, Transportation, Veterans Affairs and Interior departments, and the Federal Reserve and the Federal Deposit Insurance Corp. (read more)