Google officially cleared for spectrum auction

January 15, 2008, 1:12 PM UTC

By Michal Lev-Ram

Surprise, surprise: Google (GOOG) is now a qualified bidder in the upcoming Federal Communications Commission spectrum auction, joining the likes of Verizon Wireless (VZ), AT&T (T) and satellite television provider EchoStar (DISH). In total, 214 bidders have made it to the final round, the FCC announced late Monday. So who’s out of the running? Over 50 companies and individuals, including early entrants like Faithfone Wireless, the Navajo Department of Information Technology and some guy named Mitchell Hoffman.

Until now, much of the focus in the auction for the coveted 700MHz wireless spectrum — whose airwaves are considered particularly suited for broadband because they can travel long distances and penetrate walls — has been on the large number of nontraditional bidders like chipmaker Qualcomm (QCOM), various cable operators and even Microsoft (MSFT) co-founder Paul Allen. Then, of course, there’s Google. As early as last summer, the search giant said it would meet the minimum requirement for bidding (a cool $4.6 billion) if the FCC allowed all four of the company’s license conditions, including stipulations that the new airwaves be kept open to all downloadable applications and devices. In the end, the FCC met just one of Google’s “open” requirements, stating that one of the blocks of the upcoming spectrum be kept accessible to all mobile devices.

Google stayed in the game anyway, though many in the industry have questioned whether the company is bidding to win or just to give the appearance that it’s putting its money where its mouth is. After all, it makes more sense for Google to lobby for openness in order to speed up the spread of its wireless applications than it does for the Mountain View, Calif.-based company to turn itself into a wireless provider. Plus, Google knows it’s up against spectrum-hungry mobile operators like Verizon and AT&T, which will likely bid aggressively.

There is a small chance Google’s “open access” plan will not come to fruition: If the FCC doesn’t meet its reserve price for the spectrum it is auctioning off, there will be a rebidding process with loosened restrictions. In that case, Google’s “open to all devices” requirement could be the first rule out the door.

In the short term, there will be a “mock auction” (the FCC’s version of a dress rehearsal) on Jan. 22 to get participants familiarized with the online bidding system, but the official auction starts Jan. 24. Unlike most spectrum auctions, this one will be “blind,” meaning that the identity of the bidders behind each bid won’t be released until the auction has ended and the winners are determined.

According to Christina Burrow, an expert on telecommunications regulation with Washington, D.C.-based law firm Dow Lohnes, only certain details like the amount of the highest bids will be made available to the public.

“But what we’re not going to see are any of the identities of the bidders behind the bids,” Burrow said during a Bear Stearns conference call about the auction earlier this week. “If blind bidding works and we don’t have leaks then it should be radio silence from now on.”

Either way, Burrow says the auction must be over (and the winning bids paid up) by June 30 of this year. The spectrum — currently used for analog television — won’t be available until early 2009.