Bidding In The Name Of...

One of the most important 'events' worldwide in mobile communications is the currently open FCC auction for the 700Mhz band or Auction 73 in short. It started in January 24th and among things that make it interesting, is the diversity in the participants' list. While participants and bidders will not be known until the auction finishes, some of them have already expressed publicly their interest in the auction, the most interesting being Google Inc.

The band auctioned off covers the spectrum from 700MHz to 800MHz and is one of the last bands that are of interest to wireless communication carriers due to its physical properties (ability to penetrate walls, buildings etc) The spectrum in auction is divided into 5 zones, names as A,B,C,D and E blocks legally divided into 1000+ licenses. The Holy Grail seems to be the C block, since it is the largest 'strip' (of total 22Mhz, almost double than any other block in auction), it is the least segmented (total of 12 regional licenses among 1099 licenses) and also the best suitable for building wireless networks.

Google has decided to enter the mobile market. This has been obvious for a long time now, since basically it is easy to notice how carefully the company launches the mobile version of its services (search and mail were always available for mobile phones)The company also has much interest in collaborating with different vendors and platforms. For example, the iPhone was the first to host the mobile Ajax version of Google mobile services: Search, News, Blog, GMail and others.

However, above all comes the Google mobile platform currently under development: Android. The platform basically tries to bring the Open Source culture on mobiles. First, it is a Linux based platform (or according to Symbian's CEO Yet Another Linux Platform!) Second, it is free to vendors that choose Android to build their phones on. On the road its adoption from the industry, Android will have to face multiple challenges: a segmented market with many big players (Symbian, Micosoft, Sun,Apple) but also a different world where mobile wireless carriers are the dominant players.

It isn't clear however, if Google wants to own the band, to use it for building wireless networks to host the Android and gPhones or just to assure open access to these networks. The latter was very clear from the beginning and it is speculated that Google was the 4.7 billion $ bidder that guarantees that whoever wins the C block will provide with an open-access network.

If Google wants to take it further it will have to play against big names, the most motivated being Verizon Wireless. But this is not all. There is a hundred other participants in auction 73, among them, AT&T, CableVision and EchoStar (to provide with wireless services) and even Chevron corporation, maybe interested in creating a network among different company departments.

Recently the auction for the C block took a wild turn. In February 5th it was the first time when nationwide bidding was under the aggregate of the 12 regional biddings. As a result, the block might be segmented into different winners, leading possibly to a Babel of incompatibilities that will make it useless. As an antidote bidders should win every region or agree later on an open and free network. It is a commonly expressed opinion that if Google wins the auction, we will witness big changes in the way which the mobile industry works. Taking into consideration the open nature of Google's Android platform this is not science fiction, however reality is much harder for Google. With its recent moves the company has caused a lot of frustration, even to traditional allies like Sun or Apple, for different reasons to each. Android is also problematic (see here for example) and has not yet convinced mobile developers that it is the revolution it preaches to be.

No industry analyst makes better predictions than time, so we will have to wait for a clear view. Until the auction finishes anything else (including this post) is speculation..!