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11/30/2007
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Google Commits To Wireless Spectrum Bid

The winner of the auction will have to pay at least $4.6 billion for the so-called "C Block" portion of the spectrum.

Overcoming months of coyness about its interest in a slice of the wireless spectrum, Google on Friday committed itself to compete in the upcoming FCC spectrum auction.

Google said it would file a formal application to participate in the January 24, 2008 700MHz spectrum auction on Monday, December 3. The company said it would do so without any partners.

The winner of the auction will have to pay at least $4.6 billion for the so-called "C Block" portion of the spectrum. That's the reserve price. A winner may not be decided until March, 2008.

As to what Google will do with its new spectrum rights if it wins, a company spokesperson said via e-mail, "It's too early to say, since we don't know how the auction will turn out. We could enter into partnerships with other companies; lease the spectrum or wholesale it to other companies; or operate a wireless network, among other options."

Presumably, Google or its possible partner(s) will offer wireless Internet and voice services at a discounted rate or for free by subsidizing costs through online ads.

"We believe it's important to put our money where our principles are," said Eric Schmidt, Chairman and CEO of Google, in a statement. "Consumers deserve more competition and innovation than they have in today's wireless world. No matter which bidder ultimately prevails, the real winners of this auction are American consumers who likely will see more choices than ever before in how they access the Internet."

What this means for consumers is more options in terms of the mobile handsets they can use on mobile operator's networks, fewer contractual and technical restrictions, and more varied software for those devices.

To some extent, Google has won before it has even bid. Google's interest in wireless spectrum and the introduction of its Android mobile phone platform, along with Apple's iPhone, are widely seen to have forced wireless carriers to be more open to third-party devices and developers.

Verizon, for example, which sued the FCC in September to contest the open-access rules imposed on the new spectrum, dropped its suit in October and said earlier this week that it would open its network, to a greater degree at least.

Just how open Verizon intends to be remains to be seen. In an open environment, Google's powerful brand and wide array of popular, mostly free services aren't easy to compete with. But hiding behind the walled garden business model risks irrelevance.

In a post on the Official Google Blog, Chris Sacca, head of special initiatives at Google, echoed Eric Schmidt's comments. "Consumers deserve more choices and more competition than they have in the wireless world today," he said. "And at a time when so many Americans don't have access to the Internet, this auction provides an unprecedented opportunity to bring the riches of the Net to more people."

Whatever company ends up paying at least $4.6 billion for spectrum rights next year probably expects some of the riches of the Net for itself as well.

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