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Nov. 30, 2007 at 8:27am Eastern by Greg Sterling
WSJ: Google Will Bid For 700MHZ Wireless Spectrum
Google finally makes it official. After saying it would "probably" bid on the 700 megahertz wireless spectrum, then pulling back on that statement, it is diving in after all into the auction.
The Wall Street Journal published an article that confirmed, according to its sources, that Google will indeed bid for the available spectrum that is being auctioned next month by the US FCC.
The article says that Google will formally file on Monday for the right to bid. Google said previously that it would potentially bid $4.6 billion on the airwaves. But to win, it might cost more. There are a variety of financing mechanisms Google could use so it doesn't heavily dent its roughly $13 billion in cash-on-hand. It could also enlist a partner, which some think might be wireless broadband provider Clearwire. (But see postscript below.) Clearwire had been involved as a partner in Sprint's plan to build a national WiMax network until shareholders forced Sprint to rethink its ambition to do so. The two companies parted ways accordingly.
Regardless, Google will likely be bidding against one or more existing US wireless operators (i.e., AT&T or Verizon). But if the company were to win the licenses it could effectively become a carrier itself -- or simply allow others to use the airwaves under the open network provisions that Google has been advocating.
If Google succeeds it will be fascinating to see how it proceeds, and whether it makes a GPhone for its own network and so on. Beyond mobile, Google has a broad interest in having its own onramp to the Internet given the saber rattling and gatekeeping actions of the likes of AT&T and Comcast over "net neutrality" issues.
Postscript: Here's the formal statement Google just issued:
MOUNTAIN VIEW, Calif. (November 30, 2007) – Google (NASDAQ: GOOG) announced today that it will apply to participate in the Federal Communications Commission's upcoming auction of wireless spectrum in the 700 megahertz (MHz) band.
As part of the nationally mandated transition to digital television, the 700 MHz spectrum auction -- which begins January 24, 2008 -- will free up spectrum airwaves for more efficient wireless Internet service for consumers. Advocacy by public interest groups and Google earlier this year helped ensure that regardless of which bidders win a key portion of the spectrum up for auction (the so-called "C Block"), they will be required to allow their users to download any software application they want on their mobile device, and to use any mobile devices they would like on that wireless network. The winner must ensure these rights for consumers if the reserve price of $4.6 billion for the C Block is met at auction.
"We believe it's important to put our money where our principles are," said Eric Schmidt, Chairman and CEO, Google. "Consumers deserve more competition and innovation than they have in today's wireless world. 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."
Schmidt also praised the leadership of FCC Chairman Kevin Martin and his fellow commissioners for adopting the new rights for consumers earlier this year.
Google's formal application to participate in the 700 MHz auction will be filed with the FCC on Monday, December 3, 2007 -- the required first step in the auction process. Google's application does not include any partners.
And here's more on the rationale and the procedure to come in the auction from the Google Public Policy Blog.
From Gary Price, here's the SEC filing that Google just made related to the application to bid.
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By Greg Sterling
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