By Michal Lev-Ram
Now that the Federal Communication Commission’s spectrum auction has been officially over for more than ten days, participating companies are finally opening up about the bidding process and their perspective mobile strategies for the new airwaves they won (or, in Google’s case, didn’t win). During the auction — in which carriers, chip makers and Internet players battled it out for 700MHz spectrum licenses over the course of eight weeks — participating bidders weren’t allowed to tk due to
Google may be walking away from the government’s recently-closed spectrum auction empty-handed, but that doesn’t mean the Mountain View, Calif.-based search giant hasn’t won anything.
Sure, Verizon Wireless (VZ) snagged the most licenses in the 700MHz auction, which ended last week. But, while the mobile operator will have to shell out over $9 billion for its new airwaves, Google (GOOG) got what it wanted without paying a cent.
How so? By lobbying the Federal Communications Commission to make the soon-to-be-available airwaves open to all devices and applications, and bidding just enough to make sure the reserve price — and the new conditions — were met.
“Google just went in to get the networks opened up,” ABI Research analyst Nadine Manjaro said in a report. “They did achieve their goal of requiring that the networks be open to whatever devices they intend to bring to market, without incurring major costs. The rules of the C block [one of five portions of spectrum that were up for auction] requires the spectrum to be open to any device and any application.”
Last year Google led a handful of companies in lobbying the FCC to “open up” the upcoming airwaves, meaning that at least a portion of the soon-to-be available spectrum allow equal access to all cell phones and mobile applications, regardless of who wins the auction. Google even went as far as pledging their intent to put up the $4.6 billion minimum bid price if the FCC agrees to adopt its rules.
But analysts say it’s likely Google never wanted to own wireless airwaves in the first place, it just wanted to make sure its conditions would be met. And that’s exactly what it got.
Google’s mobile strategy is contingent on getting its mobile applications (such as e-mail, maps and search) into as many users’ hands as possible. But with carriers’ current tight grip on the type of phones and applications that can run on their networks, that hasn’t always been an easy goal to achieve. That’s why the new conditions Google lobbied for – and Verizon must now adhere to – will likely make it easier for the company to spread its mobile services far and wide. It could also make it easier for Google to get future Android phones, which are upcoming devices that run on the company’s mobile operating system, to work on the new network.
Google declined to comment, citing FCC “anti-collusion” rules barring all bidders from disclosing details until 10 days after the auction’s close. But the company praised the results of the auction as a “major victory for American consumers” in a blog post published late Thursday.
“We congratulate the winners and look forward to a more open wireless world,” the company said on its public policy blog. “As a result of the auction, consumers whose devices use the C-block of spectrum soon will be able to use any wireless device they wish, and download to their devices any applications and content they wish.”
Of course, just because consumers will someday soon be able to have more say in the type of applications or phones they wish to use doesn’t mean they will opt for the ones made by Google. When it comes to the still-nascent world of mobile offerings, the company is facing plenty of competition from other players, among them Yahoo (YHOO), Microsoft (MSFT) and plenty of startups.