How Green is your money Google?

An update on the Google bid for the prime 700 MHz auction is that they intend to go it alone. With cash and short term investment of over $13 billion, there's no reason to upset their partner circle by choosing one over another. They can buy the spectrum and spend the additional $3 billion to build the network, of course they would need to find someone who knows how to do it. Google has been operating a network using a test license from the FCC and is currently running Android devices over it. It is thought that they are experimenting with pricing models that include a one-time licensing fee with no monthly access charges. The handsets would be subsidized by advertising. A single 700 MHz tower can cover 20 miles so expect to see an explosion in rural mobile Internet no matter who wins. Google has indicated they are using game theorist to help with their auction strategy. There is some good information on Google's public policy website.

If you read and study the way the auction works, Google has to bid but they don't have to win to give consumers a 2/3 chance to win. By not bidding however, they cannot get the auction to include open devices & applications, which is what they've been pushing for. If they back out, the FCC would put up a new auction at the $4.6 billion reserve with no open requirements. The FCC could also raise the reserve to $4.7 billion and see how green Google's money is. If they squawk and pull out, then a 3^rd auction can be made with no restrictions at the $4.6B reserve. This is why they need game theory specialists. My prediction is they will bid but will not be extorted to overpay. If the requirement gets in, they can still influence the wireless business and continue to cause disruption, that's a good thing. I've speculated on other activities of Google possibly working with Apple. They could also wait for additional shakeout in the space and make a run for Sprint. The big telcos, AT&T and Verizon, want that spectrum for mobile TV. The traditional carriers know how to play this game, Google is the newbie. A Google spokesperson said "Our goal is to make sure that American consumers have more choices in an open and competitive wireless world." Next thing we'll see is Eric Schmidt kissing a few babies. They are only doing all this for us.