Google Likely Out, And Happy

GOOGLE LIKELY OUT, AND HAPPY
[SOURCE: Forbes.com, AUTHOR: Elizabeth Woyke]
Nine days into the closely watched Federal Communications Commission auction, it appears that enough competitors are keen on the spectrum that Google won't be stuck shelling out billions of dollars for the right to own and operate a new wireless network. Instead, analysts believe that Verizon thought to be the only bidder besides Google that is both rich and motivated enough--is poised to win the coveted C block of spectrum that Google was eyeing. "Verizon wants more spectrum to close the gap between it and AT&T," said Stifel Nicolaus analyst Rebecca Arbogast. Verizon owns 49 megahertz of spectrum compared to AT&T's 75 megahertz. But Verizon likely didn't bid for the C block directly, analysts said. Instead, it likely bid on a host of less expensive regional slices of spectrum and made sure that the total amount was more than what was bid for the C block. It's a savvy strategy, because under FCC rules, if the regional bids top the bids for the C block, that block must be split up and apportioned to the highest bidder or bidders. By the end of Tuesday, the regional bids added up to $4.74 billion, about $30 million more than the current total for the C block. Analysts speculated that Google likely bid $4.7 billion for the C block last week. Under FCC rules, a bid of at least $4.6 billion would ensure the creation of a broadband network "open" to any devices or application. Industry watchers speculated that Google, which lobbied the FCC to adopt open access rules for the auction, was participating in the auction out of a sense of duty rather than a desire to win. Ceding the C block to Verizon would allow Google to exit the auction gracefully and direct its billions elsewhere.
http://www.forbes.com/2008/02/06/auction-wireless-spectrum-tech-wire-cx_...