Friday, November 30, 2007

Google announces participation in 700 MHz Auction

Google has ended all doubts (there were indeed some who doubted) and announced that it will indeed participate in the 700 MHz auction.

Here's the Official Google Blog making this announcement: Who's going to win the spectrum auction? Consumers.

And the press release: Google Will Apply to Participate in FCC Spectrum Auction.

The blog post is more detailed than the press release, giving a basic primer on the auction process for the next few months. After this announcement, Google can talk no more about the auction until the auction ends. This is explained in the blog post as well:
Monday, December 3, is the deadline for prospective bidders to apply with the FCC to participate in the auction. Though the auction itself won't start until January 24, 2008, Monday also marks the starting point for the FCC's anti-collusion rules, which prevent participants in the auction from discussing their bidding strategy with each other.

These rules are designed to keep the auction process fair, by keeping bidders from cooperating in anticompetitive ways so as to drive the auction prices in artificial directions. While these rules primarily affect private communications among prospective bidders, the FCC historically has included all forms of public communications in its interpretation of these rules.

All of this means that, as much as we would like to offer a step-by-step account of what's happening in the auction, the FCC's rules prevent us from doing so until the auction ends early next year.

Another interesting point about the auction process: the auction will be completely anonymous - nobody will know what anybody else is bidding and who has won each block of the spectrum until the auction ends probably in March 2008.

Now that the question of whether or not Google will participate in the auction is settled, there are still some people who are speculating that Google will not bid to win. They claim that Google will only participate as a formality, since it has made so much noise about this auction already. There are few others who say that Google will bid upto the reserve price of $4.6 billion for the C Block spectrum, in order to ensure that the pre-conditions of allowing any application and any device to use the network will remain safely in place. The FCC has mentioned that if there are no bids which at least match the reserve price, these pre-conditions will be taken off and fresh bids welcomed.

That last point makes a little more sense, but I don't believe that Google will not bid to win. Google knows the worth of this prime spectrum. Billions of dollars is not small money. But compared to the value of what can be done on this spectrum, it is fair money... may be even a low price! So, I believe that Google will bid to win... unless something totally unexpected or outrageous happens. I cannot even speculate on what that could be.

[via The Official Google Blog and Google Press Center]

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