Google to bid in wireless auction

By Yi-Wyn Yen

Google has confirmed speculation that it will apply to participate in an upcoming  multibillion-dollar auction of wireless spectrum.

“We believe it’s important to put our money where our principles are,” Google CEO Eric Schmidt said in a statement Friday morning. “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.”

Google (GOOG) is ultimately a winner too. In July, it convinced the FCC to make the successful bidder for the valuable 700 MHz C-block spectrum open its network to allow customers to download any applications they want on any mobile phone. Google has also made open standards the centerpiece of its Android platform initiative. “That’s meaningful progress in our ongoing efforts to help transform the relatively closed wireless world to be more like the open realm of the Internet,” wrote Chris Sacca, who leads Google’s special initiatives, in a blog post.

• Why Google isn’t bidding to win the auction

Google has been the most vocal about its intentions to enter the highly-anticipated 700 MHz band auction. The Mountain View-based company, which is required to set aside $4.6 billion to meet the auction reserve, will likely go up against AT&T (T) and Verizon Wireless (VZ),  which are seeking more spectrum to run broadband wireless services. The top two carriers have not publicly stated if they plan on participating in the auction.

To make the auction more fair and competitive, the FCC has  shrouded it in secrecy. Bidders have until Monday to submit an application but once they do they’re not allowed to publicly state if they have applied. The FCC will release a list of the bidders in mid-December once applicants have been approved. When the auction begins Jan. 24, participants will bid anonymously and the FCC will not reveal which company has made a bid.

“In previous auctions, you were allowed to know who was behind each bid. Now they’ll be flying blind,” says Jonathan Cohen, an attorney with Wilkinson Barker Knauer and a former FCC attorney who helped write the new spectrum rules. “Larger entities will have to do some educated guessworks as to what others are doing in this blind environment.”