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Apple ponders $9bn bid for wall-busting wireless iNetwork

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Google isn't the only tech giant mulling over a big-money bid for a prized portion of the US wireless spectrum. Apple's thinking much the same thing.

With the Federal Communications Commission (FCC) set to auction off the so-called 700-MHz band this coming January, two unnamed sources told BusinessWeek that Jobs and company have "studied the implications" of a bid. That's right, Apple might build its own wireless network for the iPhone, cutting AT&T out of the picture.

Or not. One BusinessWeek source said the company is currently "leaning against participating in the auction" - and that seems about right. The idea of Apple running its own broadband network certainly captures the imagination, but The Reg can't see it happening.

As BusinessWeek points out, Apple has more than enough cash for a bid, but maintaining a nationwide wireless network doesn't exactly play to its strengths - hardware and software innovation - and this sort of a low-margin, hassle-heavy operation could put a strain on the rest of the company.

Plus, under the FCC's new rules for the 700-MHz band, Apple would have to open up the spectrum to competing applications and devices - something that flies in the face of the company's overarching philosophy. Apple likes to keep things closed.

The FCC calls the 700-MHz band "beachfront property." As TV stations vacate this wireless real estate, making the move to digital transmission, it could potentially house a nationwide wireless network that's faster than WiFi and more adept at passing through walls.

Google sees it as a vehicle for internet broadband that's outside the control of big telcos like AT&T and Verizon. The Mountain View-based outfit spent the summer urging the FCC to require "open access" to the spectrum, which would give consumers the freedom to attach any device and any application. You know, the same freedom we have on the anything-goes wired internet.

The FCC eventually agreed to open access for a 22MHz portion of the band, and you'd have to think this is a deal breaker for Apple. We just can't see the company running a network for devices and applications outside its control. Besides, that BusinessWeek source says Apple doesn't want a nationwide wireless network cutting into margins and slowing innovation across the company.

Come January, even Google may fail to pull the trigger. The FCC may have opted for open access, but it denied Google's request for a "wholesale condition," which would force the winning bidder to slice up the band up and sell it off to various ISPs. Without a wholesale condition, Google may face stiffer competition from the big telcos at auction and may be less likely to bid. The latest from Google chief Eric Schmidt is that the company will "probably" bid for the band.

FCC has slapped a $4.6bn reserve price on the 700-MHz spectrum, and both Google and Apple seem to have more than enough cash to meet that price. Before the FCC decided against a wholesale condition, Google publicly announced it was prepared to to pony up the commission's minimum price. And according to BusinessWeek, Apple could bid as much as $9bn.

But that doesn't mean it will. We asked Apple for confirmation on the BusinessWeek story, but the company did not respond. ®

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