Google Wireless?

by Cassimir Medford on 31 January 2008, 17:31

Categories: Media - Communications - Finance
Topics: google , auction , Verizon Wireless , Cassimir Medford. , Tim Farrar , c block

 
A $4.7 billion bid for a valuable swath of the public airwaves being auctioned by the U.S. Federal Communications Commission could substantially change the mobile communications business for decades to come.

The bid, most likely made by auction newcomer Google, triggered a requirement that the license holder of the spectrum, the so-called C Block, build an "open" network and act as a wholesaler of spectrum rather than a retailer.

The wholesaling of nationwide spectrum targeted at consumer services has never been tried commercially in the United States, and there are fundamental questions about the design and cost of such a network.

But an open network makes it easier for smaller mobile application developers and device makers to sell their wares directly to consumers without the time-consuming step of seeking the blessing of a single carrier.

Google, a major advocate of open mobile networks, was instrumental in getting the FCC to write the open network rules into the auction.

"Now Google could be the one holding the license," said Tim Farrar, president of Telecom Media and Finance Associates. "It looks to me like Verizon stopped bidding on the C Block and switched to other bands."

The bidders are not identified in the auction, but analysts believe that all of the C Block bidding was being done by Google and Verizon Wireless.

But that ended abruptly after the $4.7 billion bid was made early on Thursday.

And since the company that made the $4.7 bid was unlikely to over bid itself, the indication was that one of the two companies, most likely Verizon, stopped bidding

In the meantime the bidding activity on some of the other properties went up significantly, indicating to Mr. Farrar that Verizon shifted its attention away from the open C Block.

It is unclear whether Google was truly interested in owning the spectrum or if it was in the auction simply to usher the bids past the open trigger point. But if the bidding stops at this point Google will become the newest U.S. carrier.