Google’s Auction Plans: Probably Wants Leverage In The US, But In The UK?

Everyone is pretty excited about Google’s (NSDQ: GOOG) participation in the upcoming US spectrum auction, but analysts and wireless industry experts warn not to expect results any time soon. Building a network takes years and Google doesn’t have the expertise to build and operate one — although it could certainly get the expertise in the next few years. The question is why it would do so rather than to “invest money in upgrading their search engine and in selling ads” in the words of Mark Winther, the group VP and GM of Worldwide Telecommunications at IDC in PC World.

That could be a mistake though, in that it assumes the “results” need to be a national wireless network — it could be argued that Google’s bidding is already achieving positive results with Verizon’s announcement of plans for a more open network. That’s the view of Harold Feld, the senior VP of the nonprofit public interest telecom law firm Media Access Project, who argued that Google is more likely to use the spectrum as a bargaining chip in dealing with carriers: “Google is not looking at becoming a direct competitor with the major telcos…Rather, I think they want to use the spectrum to entice people who are network operators to build out the kind of open-access network that Google wants. If Verizon (NYSE: VZ) or AT&T (NYSE: T) buys that spectrum, then Google will have to live with whatever kind of open-access network that the carriers want to build.”

Meanwhile, there’s speculation that Google will bid in the UK’s spectrum auction run by Ofcom. The basis of this is simply that Google isn’t barred from bidding in the auction and there’s enough spectrum to build out a network in the UK. To be fair the Guardian article does indicate that it would be extremely unlikely for Google to bid in the UK auction, and even less likely it would want to become a mobile operator in the UK… but “it is not outside the realms of possibility” which is likely to be enough to keep tongues wagging for a while. Google’s not saying anything, telling PaidContent.co.uk that the FCC rules disallowing talk about the US auction prevents it saying anything about the UK auction, which could suggest that any plans Google may have for the UK are linked to its plans for America.

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