Is Google ready to go wireless?

Several companies are
interested in something called the C Block.

THE RECORD (HACKENSACK N.J.)

HACKENSACK, N.J. — Can you imagine Google running a cell phone company?

You may love Google, ignore Google or fear Google. But one thing is certain — it innovates. And it’s not far-fetched to believe it would do the same in the cell phone business.

The wireless industry is atwitter these days with the possibility that Google may actually get a chance to turn the cellular industry on its head.

That’s because the 700-megahertz range of the electromagnetic spectrum (aka the nation’s airwaves) is up for sale in an auction being conducted by the Federal Communications Commission. Technically speaking, the FCC doesn’t sell the airwaves, but rather sells licenses to companies in exchange for the right to operate within a particular radio frequency.

And the licenses that have attracted the most buzz are in the 700 Mhz slice, referred to by auction-watchers as the C Block.

It’s the portion being vacated by analog television signals when TV makes its big switch to digital next year. Part of the rationale for switching TV to digital signals was that it would free up valuable airwave real estate which would, in turn, lead to creation of new wireless services and a big payday for the federal government. The anonymous bidding on the 1,099 total licenses available in this auction topped $19 billion this week after more than 30 rounds of bidding.

The so-called C Block is attractive to companies for several reasons.

First, the FCC is auctioning a nationwide license (as well as some regional ones) in the C Block. A company that places the winning bid can then build a nationwide wireless network, as opposed to building a network that only operates in parts of the country.

Secondly, electrical engineering gurus say the 700 Mhz slice lets signals easily penetrate walls and go farther than other portions of the electromagnetic spectrum. That gives the winner’s phones and gadgets some distinct advantages over competitors’ phones and gadgets.

There’s one more aspect to this auction that’s making history.

Google went to the FCC last year before the auction began and successfully pushed for “open access” rules that would force the winning bidder of the C Block to run an entirely different kind of cellular company.

Instead of limiting the type of phones and gadgets and software programs that can be used on its network (which is more or less what cell phone companies do nowadays), the winning company must, as Google has said, allow users to download any software program they want on their mobile device, and use any mobile devices they want on that wireless network.

The FCC decided that a bid of $4.6 billion would trigger the open access rules. On Jan. 31, an anonymous bidder (there are 214 companies in all bidding on various licenses) submitted a C Block bid of $4.71 billion. Consumer groups and analysts hailed this news, calling it a welcome development since it’s likely to force the industry into changing the way it does business.

“Wireless carriers watch each other and are afraid to innovate,” said Nadine Manjaro, a senior wireless analyst with ABI Research. “Google would definitely bring something new to the marketplace.”

Some analysts believe Google has no desire to actually run a cell phone company, it just wants to compel whoever wins to allow Google’s money-making search software onto more consumer wireless devices.

Some experts say the “open access” rules have some loopholes and the winning company will still limit use of its network. We won’t really know how all this will play out for some time.

One thing is certain, Google’s push for open access has already had some impact, motivating the traditional wireless carriers to make efforts to open their networks to other gadgets and applications.

So, what are Google’s chances to win control over the coveted C Block?

The clues as to which company (all the major wireless carriers are in the game) might be winning the bidding process are being dissected almost daily by industry watchers.

For a time, the smart money was on Google as top bidder. There’s been considerable speculation that Verizon Wireless is reaching deep into its pockets to take control of the C Block.