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Google cops to puppeting Great American Wireless Auction

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Google has admitted it toyed with Verizon during The Great American Wireless Auction.

Today, the US Federal Communications Commission lifted the gag order it placed on companies that vied for the coveted 700-MHz band, a prime portion of the US airwaves, and the world's largest search engine couldn't help but tell the world what an important role it played in the auction's outcome, ensuring that at least part of the band will provide open access to any device and any application.

"As you probably know by now, Google didn't pick up any spectrum licenses in the auction," two Google lawyers wrote on The Official Google Rhetoric Blog. "Nonetheless, partly as a result of our bidding, consumers soon should have new freedom to get the most out of their mobile phones and other wireless devices."

Back in August, the FCC said it would attach an open access requirement to the 700-MHz "C Block" - but only if bidding exceeded a $4.6bn reserve price. In the end, it was Google that placed the magic bid, and the Mountain View outfit admits that delivering open access was its "top priority."

"Based on the way that the bidding played out, our participation in the auction helped ensure that the C Block met the reserve price. In fact, in ten of the bidding rounds we actually raised our own bid - even though no one was bidding against us - to ensure aggressive bidding on the C Block. In turn, that helped increase the revenues raised for the U.S. Treasury, while making sure that the openness conditions would be applied to the ultimate licensee."

Yes, Google was prepared to actually win the C Block. But it never expected this would happen. "We were also prepared to gain the nationwide C Block licenses at a price somewhat higher than the reserve price; in fact, for many days during the early course of the auction, we were the high bidder. But it was clear, then and now, that Verizon Wireless ultimately was motivated to bid higher (and had far more financial incentive to gain the licenses)."

In other words, Google's main objective was to stick Verizon with an open access requirement. And that's exactly what happened. After Google took bidding over the reserve price, Verizon placed the bids that won the C Block.

In the fall, Verizon brought legal action against the FCC, hoping to destroy the commission's open access requirement. But this didn't work out. And now, the mega-telco has no choice but to open the C Block to any application and any device - at least in theory.

Verizon has announced that its entire network will be open by the end of the year. But at this week's CTIA wireless trade show in Las Vegas, Verizon CEO Lowell McAdam badmouthed government regulation of the wireless industry - just before FCC chair Kevin Martin announced he would not enforce open-access beyond the 700-MHz C Block.

The other big 700-MHz winner was the other big American telco: AT&T. Today, both AT&T and Verizon announced they would use their newly-won spectrum to roll out 4G networks based on the fledgling LTE (Long Term Evolution) standard.

According to Adrian Scrase of 3GPP, the organization that oversees LTE, the standard will be ratified by the end of this year. "We want to complete LTE by December 2008, and then go to market with a mature product," he told us. And Verizon is saying that its LTE network will launch as early as 2010.

“The spectrum we purchased in this auction, combined with our existing portfolio, provides new flexibility as we execute our high-growth business model,” read a canned statement from McAdam.

“We also believe that the combination of the national, contiguous, same-frequency C-block footprint and our transition to LTE will make Verizon the preferred partner for developers of a new wave of consumer electronics and applications using this next generation technology."

Meanwhile, AT&T says that its LTE network may not be ready until 2012. ®

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