CEO Schmidt confirms Google will bid in FCC 700 MHz auction

A rapid change in climate precipitated perhaps by Verizon Wireless' unprecedented move on Monday, brings the perennial fence-sitter back in the ballgame for wireless spectrum.

"We believe it's important to put our money where our principles are," stated Google CEO Eric Schmidt this morning, confirming reports that the company is prepared to not only meet the $4.6 billion minimum bid price it helped set for the so-called "C-block" -- the jewel in the US Federal Communications Commission's 700 MHz auction next January -- but will apparently make this bid from its own pockets alone.

"Consumers deserve more competition and innovation than they have in today's wireless world," Schmidt continued. "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 willingness to bid means Google is ready to become a full-service wireless communications company, although that willingness has been doubtful since last July, when it first made its intentions known.

Not all of Google's requests for openness were agreed to by the FCC; for instance, it will not be incumbent upon the winning bidder, whoever that may be, to resell portions of the C-block to wholesale spectrum suppliers. That doesn't mean Google couldn't do that if it's the winner.

The FCC did agree to another rule which makes it incumbent upon the winner to open up services on its spectrum to devices of the customer's choice -- what Chairman Kevin Martin dubbed the "cart-a-phone" rule, after a similar regulation on telephone service in the 1980s.

On Monday, Verizon Wireless made it crystal clear that it intends to open up all its existing CDMA spectrum to the consumer's choice of devices, so long as they meet a basic set of technical interface specifications. VZW's willingness to become the first official "cart-a-phone" carrier may have sent Google a signal that the game, as it were, is afoot.

On Google's corporate blog this morning, head of special initiatives Chris Sacca curiously invoked many of the same sentences and phrases as in Schmidt's statement (perhaps they're testing out a new service on a telepathic wavelength).

Besides repeating his boss (or vice versa), Sacca also wrote, "The eventual winner of a key portion of this spectrum will be required to give its customers the right to download any application they want on their mobile device, and the right to use any device they want on the network (assuming the C Block reserve price of $4.6 billion is met in the auction). That's meaningful progress in our ongoing efforts to help transform the relatively closed wireless world to be more like the open realm of the Internet."

And that's also progress for its Android mobile platform, conceivably even if Google loses the C-block. Last Monday, VZW officials stated they are completely unopposed to the idea of manufacturers other than those with whom it partners, bringing qualifying Android-based devices to its CDMA network.

But there's a possible counter-argument to the theory of VZW's interest in the C-block, and it runs like this: With that company already creating conceivably the nation's first cart-a-phone service tier with a trifle investment in its existing infrastructure and basically a flip of the switch, VZW might not need or want the C-block; it may already have what it needs to compete with whoever the winner might be.

If that's the case, then Google's prediction today that the FCC proceedings, which begin on January 24, could last well through March, may not come to fruition. Google might be out a huge chunk of change pretty early in the game, with its key competitor not a counter-bidder but instead a pre-established market leader. This is one very high-stakes poker game indeed.

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