Google claims credit for FCC wireless auction results

Two Google counsel said in a blog post this morning that Google didn't really want wireless bandwidth, even though it did place a bid during the FCC's recent 700 MHz spectrum auction.

Verizon Wireless spent $9.6 billion to win a majority of licenses for spectrum in the coveted C block. But Google is claiming at least partial credit for the auction's results, with the search engine leader saying today its intent was to drive up the asking price "in order to reach "the $4.6 billion reserve price that will trigger the important 'open access' and 'open applications' license conditions."

"Partly as a result of our bidding, consumers should have new freedom to get the most out of their mobile phones and other devices," wrote Richard Whitt and Joseph Faber in their company's public policy blog.

Companies that did pick up spectrum in the various spectrum Blocks included Vulcan Spectrum, led by Microsoft co-founder Paul Allen, in the A Block; AT&T in the B Block; Verizon Wireless, in the C Block; and EchoStar, the owner of Dish Network, in the E Block.

Google was "prepared to gain the nationwide C Block licenses at a price somewhat higher than the reserve price; in fact, for many days during the early course of the auction, we were the high bidder. But it was clear, then and now, that Verizon Wireless ultimately was motivated to bid higher (and had far more financial incentive to gain the licenses)," according to the attorneys.

"You may remember that as the FCC was setting rules for the auction last summer, we urged the Commission to adopt four openness conditions. Further, we vowed to bid at least $4.6 billion in the auction if the Commission adopted all four rules. Even though the FCC ultimately agreed to only two of the conditions, which nullified our original pledge, we still believed it was important to demonstrate through action our commitment to a more open wireless world," wrote Whitt and Faber.

"We're glad that we did. Based on the way that the bidding played out, our participation in the auction helped ensure that the C Block met the reserve price."

In a conference call with analysts and journalists last week, AT&T also corroborated the hunches of some observers that it didn't really want to win any spectrum in the C Block, anyway.

Beyond the spectrum gained in the B Block auction, AT&T spent $2.5 billion prior to the C Block auction in acquiring Aloha Partners LP, a license holder that owned C Block spectrum, but without the Google-driven "open access" requirements FCC Chairman Kevin Martin is imposing on Verizon Wireless as the big winner in the C Block.

"Open access" and "open applications" are important to Google because both could give independent players room to build a cooperative wireless platform. That platform would be based around Android, a Google-led project to build a Linux 2.6-based software stack envisioned as running open source applications running on multi-vendor mobile devices.

Also backing Android is the Open Handset Alliance (OHA), a Google-spearheaded industry association consisting of about 35 mobile operators, handset manufacturers, chip makers, and "commercialization companies."

Ironically, though, the OHA's membership roster includes only two mobile operators with a presence in the US: Sprint Nextel -- a carrier that still envisions building its 4G Xohm network in the 2.5 GHz spectrum -- and T-Mobile. Verizon Wireless in not on the OHA list, and neither is AT&T.

Android is "already off to a successful start, and we are likely to see handsets later this year based on the Android platform," according to Google's counsel, who also indicated that the company will continue to try to make its influence felt during the re-auction of D Block spectrum that didn't meet the FCC's minimum price.

"We will weigh in at the FCC as it sets implementation rules for the C Block, and determines how to move forward with a D Block re-auction," the attorneys vowed.