Google Can Win By Losing Spectrum Auction

Google doesn't want their own playground; just permission to play in the sandbox

With the FCC auction on the 700MHz band drawing to a close, and the bidding on the "50-states, eight-license" package going stagnant, analysts are speculating that Google has already withdrawn from the race, leaving the lead to Verizon Wireless.

With the $4.64 billion reserve price met on January 31st, the "open access" rules pushed for by Google have become part and parcel to the spectrum. The buyer of the spectrum will be "required to provide a platform that is 'more open to devices and applications' ... allowing consumers their choice in applications and devices to connect with." Regardless of who wins, Google stands to benefit from the "open access" rules to promote their mobile phone OS, Android.

However, industry experts haven't all agreed that Google has thrown in the towel. "If Google wanted to get into the nationwide wireless business, this was their only chance," said Rebecca Arbogast, a telecommunications analyst from Washington, DC.

While the Internet juggernaut has more than $6.5 billion in cash and assets targeted for investment, the cost of the hardware and supporting infrastructure to build a nationwide network -- in addition to the $4.84 billion demanded by the FCC for the license -- would eclipse this by a significant amount.

The auction is projected to close within the month, and the official winners will be announced at that time.