- Will Bid Alone
Google this week confirmed that it will indeed bid on wireless spectrum in the US on January 28, starting at $4.6 billion. The spectrum could be used to build an open access wireless network that would compete with the more closed cellular networks that the likes of AT&T, Verizon Wireless, Sprint and T-Mobile operate. The bidding could continue into March before one or more winners are determined.
Google’s announcement this week is that it will try to assemble a national block of wireless spectrum.
Estimates are that actually building a wireless network could cost another $17 billion to $20 billion. Google has not said, if it wins of course, whether it will build the network or turn it over to a more experienced network operator.
Google, as we have said often, wants to make sure the ads it carries on its global advertising network can be seen on any device that has Internet access. To that end, it has launched a Linux-based operating system for mobile devices, not just handsets, which mobile device makers can use for free.
The FCC will auction the spectrum in six regional chunks of the continental US. Another six regions cover Alaska, Hawaii, offshore areas and territories. Different bidders could win different regions.
Local TV stations currently use the spectrum for over-the-air analog broadcasts. The government has mandated that the TV stations switch 100% to digital broadcasts, which use less spectrum than analog broadcasts, by February 2009. That’s when the winning bidder can start using the spectrum.
“We could enter into partnerships with other companies, we could lease the spectrum and become a wholesaler or we could operate our own wireless network,” said Google spokesman Adam Kovacevich. Google said it will bid alone, with no bidding partners.
Google chairman Eric Schmidt promised in a written statement that, if it wins, the company will use the spectrum to increase Americans’ wireless choices.
“We believe it’s important to put our money where our principles are,” Schmidt said. “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.”
The FCC has mandated that some of the spectrum that’s going up for bid be kept open to any devices or software compatible with the network technology the auction winner chooses. Google was the biggest supporter of the open access provision.
Google hasn’t said which wireless network technology it would use. WiMAX technology, which is almost completely developed, would seem to be a possible choice. However, Sprint and Clearwire have committed to building WiMAX networks. Verizon Wireless said last week that it will use LTE (Long Term Evolution) technology for its high-speed wireless network.
“We haven’t said anything about what network technology Google will use,” Kovacevich said. “We would consider that question premature because we don’t know how the auction is going to unfold.”
Cox, AT&T and Frontline Wireless have indicated they will also bid on the 700 Mhz. Verizon Wireless is believed to have bidding intentions as well. Sprint, Time Warner Cable, Sprint and Comcast have said they will not bid. The deadline for submitting bid applications has passed so no one else is allowed to say whether or not they intend to bid until after the FCC announces who the bidders will be.