On Thursday, the Federal Communications Commission will auction off what industry observers call the “sweet spot” of the wireless spectrum — the 700-MHz block formerly occupied by television broadcasters. Among the bidders are some 214 companies, including Verizon, AT&T and, most famously, Google.
Since Google announced last year that it intended to participate in the auction — which the FCC estimates will rake in about $10 billion — technology watchers have speculated about what Google would do with the choice spectrum. Would it really compete directly with the cell-phone carriers? Partner with a carrier? Or use it to blanket the nation with wireless Internet?
The latest speculation comes from Jeff Lindsay, an analyst with Sanford Bernstein, who wrote in a research note over the weekend that Google may be “bidding to lose” the auction. He noted that with estimates of $10 billion for the auction and $5 billion a year to build a network, plus the fact that running a wireless network would be a radically different business, it may be too much for Google. Thus, he said, Google may be participating mostly to push the issue of openness.
Other observers disagree. “They’re as serious as anybody,” said Mark Gibson, senior director of operations at spectrum consultancy Comsearch, in a telephone interview. “Most of us don’t believe they’ll build the network themselves; they’ll partner with a provider who’s not participating, such as T-Mobile.”
In any case, the auction price may be overstated, Gibson said. With the collapse of Frontline Wireless and its plan for a universal public-safety network, some observers think the FCC won’t get $10 billion.
Google’s participation in the auction is intriguing because of the company’s commitment to open networks. Google pushed the FCC to adopt open-access rules that were weaker than Google proposed, but strong enough to generate opposition…