Will Google Bid in 700 MHz Auction After All, and How Much?

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Reuters broke the news this morning that, at a leadership conference in Aspen, Colorado, Google CEO Eric Schmidt responded to a question from a representative of T-Mobile USA by saying his company may be inclined to participate in the Federal Communications Commission’s auction of UHF television frequencies, now set for January 16, 2008.

While all versions of Reuters’ stories in the US, Canada, and the UK had been yanked from online access for unexplained reasons at the time of this writing, GigaOM’s Paul Kapustka apparently reporting from the conference itself gave an account that validated the spirit of the Reuters report, citing Schmidt as saying his company would “probably” place a bid. Reuters had quoted Schmidt as responding to T-Mobile’s question about whether Google would bid by saying that placing a bid “probably would be the way to answer that.” T-Mobile is itself a likely bidder in this auction.

Last month, Google petitioned the FCC to set rules for the spectrum auction, including to add provisions that would compel the winning bidder to open up portions of its purchased spectrum to wholesale access by third parties, and to enable customers to bring their own devices to any service that uses that spectrum. The company said it would be willing to bid up to $4.6 billion if the FCC could meet those terms. While FCC commissioners were amenable to the latter set of provisions, they did not pass the former set, even though three of the five commissioners expressed regret for not having done so.

A revision to the spectrum allocation map the FCC originally drew up, which was also approved last month, seemed to work against Google’s original intentions, as the big block of space it originally had its heart set on is no longer being sold off in one big chunk.

But since Commissioner Robert McDowell’s startling admission last month that no potential bidders had expressed interest in bidding under the rules the FCC did adopt, Google may have warmed up to the idea of placing a bid anyway. In which case, the company may not have to put up the full $4.6 billion – it’s under no obligations at present to bid that high.

According to GigaOM’s Kapustka, the provision the FCC did adopt – which was dubbed the “Cart-a-Phone” provision by FCC chief Kevin Martin, who also took credit for conceiving it – ended up being “a pretty good outcome. But it’s important that the choice be possible.”

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