Update: It looks like some of us jumped the gun on calling this, including the New York Times. It turns out that there are still enough bidding units left in the C-Block for one or two deep-pocketed companies to still make a bid. So it is not necessarily over yet. Because of the secrecy surrounding the auctions—companies are not allowed to talk about it until it is over—we can only guess what is happening. The post below is entirely speculative.
The most closely-watched part of the wireless auction for the 700 MHz spectrum that started earlier this week appears to be over. The auction for the coveted C-block of spectrum, which is a nationwide license and is subject to special open-device/application rules, might have been won by a $4.7 billion bid—just a smidgen above the $4.6 billion minimum required by the FCC. Until the entire auction is over for the other blocks of spectrum, the FCC won’t disclose who the winner is. But the consensus is that the winner is either Google or Verizon. Update: We’ll see in the following days whether any other bids emerge. This could just be a pause in the bidding.
Bits blogger Saul Hansell at the NYT has been watching the spectrum auction like a hawk. His theory, after looking at the pattern of bidding for the C-block, is that either there were two bidders playing a drawn-out game of chicken or only one bidder slowly raising its price, almost reluctantly. That one bidder could have been Google, which showed its hand earlier by publicly stating it would bid the $4.6 billion minimum to support its suggested open access rules (and stuck by that pledge even though only two of its four suggested rules were adopted ).
Verizon could have sat the auction out, deciding not to bid and instead watch Google squirm as it realized it was the only one in the game. There is a lot of skepticism about how serious Google really is in its desire to actually win the auctions as opposed to influence their outcome and the rules of the game. When it became apparent that there was only one other bidder in the early rounds of the auction, Verizon could have calculated that Google would bid just shy of the $4.6 billion if it realized it was on its own. If that had happened, the FCC would have almost certainly re-auctioned the C-block at a later date without any of those pesky open-device and open-application rules that Verizon really doesn’t like.
But somebody did make the minimum bid, and those rules will be in effect. If Google indeed was the lone bider, it might have just swallowed hard and decided to go ahead and buy the spectrum. Maybe it was worth more to Verizon to see Google pay a $4.7 billion penalty for stepping on its turf than to have the spectrum for itself. Or maybe it wanted the spectrum all along, and it waited until the last minute to put in the minimum bid, betting that Google wouldn’t respond. Either way, Verizon might feel like it snookered Google on this one.
But we’ll all be better off for it because whoever builds the next wireless network on this spectrum won’t be able to discriminate between devices or applications. And if it turns out that Google did in fact win, there would be nothing stopping it from pursuing its two other goals of opening the network up to other service providers through wholesale leasing and other networks (both wireless and wireline) as well. That would help make the wireless world less a collection of silos and more Internet-like.
So who snookered who?
(Photo by Steve Jurvetson)
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Verizon sucks. It’s expensive…. They charge too many strange taxes. I won’t mind having Google to conquear evil empire.
Shouldn’t that be who snookered whom? heh
I’ll be interested in who actually won the “C block”….sounds something from a prison show.
If Google have monthly phone bill that cost $12.95 a month & plus high speed access. I would totally switch to Google and drop Verizon. I would spread email to all my friends.
$12.95 month phone cost is biggest hype. Indeed, Verizon will get extremely nervous. Let’s hope Google launch new phone brand.
Yeah, it would be awesome if Google opens things up a bit & lowers prices. I’m just waiting for the day when I have skype on my phone, and a built-in webcam, and I can use it anywhere a cell phone can be used. That would be the ultimate Jetsons gadget, IMHO…
Google is the real winner in any case. I just wrote about it here:
http://websideventures.com/200.....m-efforts/
Spectrum is the last true gold rush of the post industrial era. If Google is the owner of the bid, and the spectrum, then it will be a relatively small matter to find partners to build / lease the national infrastructure.
This is especially true when you consider the ever higher speed wireless data options are becoming available, and the differential costs to build out terrestrial broadband.
Smooth move, Goog.
This is mostly wishful thinking–we all wish Google won. Mark my words: Verizon won. Google bid exactly enough to make sure the open access rules were followed. Then Verizon bid a little more to start the real battle for the spectrum, but knowing the provisions were in place, which was their only end-game, Google didn’t battle back, so Verizon won the specturm. Google’s pre-announcement of their intention was brilliant–it made sure Verizon had enough cash ready to over-bid them so they don’t get stuck with the purchase and simultaneously forced Verizon not to sit out. The tactic was sheer evil genius.
Eric
My prediction is that Verizon won the bid, but ends up losing when Google buys Verizon and gets the spectrum anyway.
pwned!
so it’s all good, right? Just gooder if Google won.
C’mon Google noodles. Do you really think Google would open this up on the cheap, after spending $4.7 B I L L I O N ? It will cost several billion to build out the network. This isn’t adsense bozos. If they want to run with the big dogs, they gotta get off the porch and if they play, they pay…..no wait…..users PAY.
The shit ain’t checkers…Its CHESS!
…very nice Alonzo (Zach). lol….one of my favorite quotes. Anyway, Google IS the evil empire. How has no one figured this out yet? Evidently all one has to do is give away free services to achieve world domination.
Regardless of the outcome, the rules of the game have changed. That’s a step forward. Now, if Google won, that’s 5 steps forward, as we will certainly see the birth of several new carriers.
Would be nice if Google wins. Agree with Peter that either way its a step forward.
I also agree 100%.. All in time we shall see.
Google should be open to helping others by opening up web search now. An open index would be a non-evil thing to do.