Google prepares for wireless D-day; First milestone Dec. 3

Google prepares for wireless D-day; First milestone Dec. 3

Summary: Google has until Dec. 3 to reveal some of its wireless cards.


Google has until Dec. 3 to reveal some of its wireless cards. That's the day bidders in the Federal Communications Commission will have to declare whether they will join the 700 MHz wireless auction.

According to the Wall Street Journal, Google is leaning toward being a bidder. In a way, it has little choice. If you're going to engage in an open conversation with the FCC about wireless auction rules it makes sense to bid to keep your goodwill in Washington D.C.

But there are unresolved questions: Will Google bid alone? Will it round up partners? What's the financing look like?


That last question is a joke. Google has cash and if it floated bonds they would be as in demand as its stock. Bond investors rarely get to buy issues from high-tech bellwethers. If bonds from Oracle and Cisco are any indicator Google could raise as much debt as it wanted. Typically, tech titans are debt free so the bond market salivates when these bellwethers raise cash.

The Journal story does a nice job of raising the key issues. Some observations:

  • Can Google run its own wireless network? Sure, why not? Yes, wireless networks are complicated but Google would have a key advantage--it wouldn't have legacy applications and equipment to worry about. If you're AT&T and Verizon Wireless you can't just rip out old stuff and replace it with a new network. That's why wireless networks in emerging markets are advanced--they have a greenfield.
  • Who is Google going to annoy? The partnership thing shouldn't be overlooked. Google would get flexibility by bidding by itself, but the wireless world is an ecosystem. Partnering with another bidder may make sense even if it's a token gesture. Clearwire was mentioned as a partner, which would make some sense since its Sprint deal is in limbo.
  • The spectrum purchase would make sense. Just because Google bids--and possibly wins spectrum--it doesn't necessarily have to use it. A slice of 700 MHz spectrum would be a valuable asset. It could divide the spectrum and lease it, use it as leverage in negotiations with AT&T and Verizon Wireless or create some grand plan for its Android software. The grand plan would probably add up to the long-rumored G-phone.

Topics: Wi-Fi, Banking, Google, Networking

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  • Don't know if this will be anything like the 3G auctions in the UK

    But I suspect companies will just pay stupid amounts of money for something that will bring very little return.

    Small mobile wireless devices have to real uses for the airwaves telephones and email.

    There just isn't a market for watching TV on a 2 inch screen which the main mobile players have discovered to their cost in the UK
  • Look for Google to bid whatever it takes to get a slice of the spectrum for

    a nationwide network. Then look for them to lease or sell it to partners, with open access stipulations and internet based, so you can roam from anywhere, use any device, etc. Of course anybody will be strictly prohibited from blocking ANY service.

    Google can make Billions for an open nationwide network. They can bid billions more than anybody else. These auctions WILL raise an eye popping amount of money.
    • Though Microsoft

      has more cash and could easily outbid google and lease out the spectrum just to disrupt their plan, don't you think? And they can easily get as many, if not more partners to help with the bid if they wanted to.

      Just a thought.
      • I have not heard that MS is even thingking about it, but, unlike Google,

        they don't have a good way to make money on it, and to disrupt Google, they would have to keep in closed and expensive. But, it would be interesting for them to try. Not sure they can keep the mobile airwaves closed and expensive forever.
        • Why would they?

          [i]Not sure they can keep the mobile airwaves closed and expensive forever[/i].

          That is more the Google thought process then anyone else.
          • No, Google profits when there are more people with cheap and easy access

            to the Internet. But, in any regard, Google being the number one search provider, and advertiser, they gain more than anybody else.
    • I found this interesting

      [i]But it could also prove painful for Google. He estimated it would cost an $8 billion to $10 billion more to build another nationwide wireless network, not to mention heavy capital spending to keep up with constant evolutions in the market.

      Hodulik said such cost considerations could hugely depress Google's highly valued stock, which trades about 33 times what analysts, on average, expect it to earn next year[/i]

      Not so cut and dry as you would assume.
      • Google does not have to go it alone. They can work with regional partners,

        or lease the bandwidth back with the restriction that it be open access and have hooks for location information. But, Google has the money to and it would be good to see their stock price fall back to earth where it belongs. The high stock price is a distraction.

        Though it would be very unlikely that Google would run the networks themselves, they would only finance it. At the very least, they would spin off a subsidiary to run the networks.
  • What will "to google" in 10 years mean?

    See my small cartoon: