“Companies are finally permitted by auction rules to speak about the recently accorded 700 MHz spectrum, with Google now confirms what everyone doubted: its bidding in the 700 MHz auctions was primarily about triggering the open access rules.”
San Francisco — Google Inc. declared Thursday its intention in the latest government spectrum auction was to wring out higher competing bids out of Verizon Wireless and open up a large chunk of the airwaves to outside Internet devices.
Sure enough, Google did ante up the $4.6 billion it promised it would bid –- if the FCC accepted Google’s conditions –- but it has with a great deal admitted it only really cared about the approval of greater openness and options for wireless customers.
A post on the Google blog, two of its attorneys describes its bid strategy, points out that the company was geared up to acquire spectrum at a price above the reserve:
Attorney Richard Whitt wrote that, “for a long time during the early days of the auction, we were the high bidder” for the so-called “C block” of spectrum.
That auction block had regulations attached to it that would open it up to a more liberal array of devices and applications than those provided directly by the spectrum’s owner, but only if bidding reached $4.6 billion.
“Nevertheless it was clear, then and now, that Verizon Wireless eventually was motivated to bid higher,” Whitt wrote. “As a consequence of our bidding, consumers soon should have new freedom to get the most out of their mobile phones and other wireless devices,” he wrote. Verizon at last won the C block spectrum, whereas Google did not come off with any licenses.
Joseph Faber, corporate advisor for Google, wrote in a posting on the Google Public Policy blog and stated quite blatantly, “Google’s top priority heading into the auction was to make sure that bidding on the so-called ‘C Block’ reached the $4.6 billion reserve price that would trigger the important ‘open applications’ and ‘open handsets’ license conditions.”
In the meantime, the successful bidders, having just pledged large chunks of cash, which in turn, helped increase the revenues raised for the U.S. Treasury, while making sure that the openness conditions would be applied to the ultimate licensee.
Verizon Wireless bought the largest block, paying $9.6 billion, while other winners of the valuable, low frequency spectrum that was put up for bid earlier this year include AT&T Inc. that bid for a total of $6.6 billion. EchoStar Corp.’s Frontier Wireless LLC made a $712 million bid, FCC’s report unveiled. At the same time, Qualcomm was the third big name on the list, which according to The Federal Communications Commission, totaled $558 million.
The auction of the 700 MHz spectrum will guarantee wireless services to rural and urban areas across the United States. Around 75 names won licenses in 305 rural areas of the country, out of a total of 428 Rural Service Area licenses.
The FCC regulations on the C block published last year prohibits Verizon to stop the progress of or hold back the traffic from competing carriers that use the network. The rules also prevent the carrier from discriminating against devices trying to connect to the network.
“The last part of the auction undoubtedly does not mark the end of our attempts toward greater wireless choice and innovation. 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. Android is already off to a successful start, and we are likely to see handsets later this year based on the Android platform,” Google said.
The FCC regarded the overall auction a great accomplishment, bringing in nearly $20 billion in bids despite the difficult current economic climate.
“In addition, FCC Chairman Kevin Martin has mentioned the setting off open access rules for the C block as a success.”