Amidst frenzied media coverage and hopes for changes to the nation’s wireless infrastructure, the 700MHz auction came to a close this week after raising $19.59 billion. Much like a political election, the incumbents won, and talk of change will likely remain just that — talk. Verizon Wireless, a joint venture between Verizon Communications and Vodafone, won the majority of the C block with a bid of $4.74 billion and AT&T picked up 227 licenses in the B block of regional licenses, the FCC said this afternoon.

Farhad Manjoo, Salon:

Google wins by losing wireless auction to Verizon
The Federal Communications Commission announced yesterday that Verizon and AT&T won the largest slices of wireless spectrum put up for sale in a government auction. The spectrum is radio-frequency space that TV broadcasters will no longer be using; wireless companies hope to offer improved phone and mobile Internet services on that space.

There's no real surprise here: Everyone expected that entrenched telecom giants would get that space, and they did. But their path to domination was not an easy one, and it wasn't achieved without major concessions. In particular, Verizon will be forced to open the network to devices and programs of its customers' choosing. You can thank Google for that outcome.

Last summer, the search company lobbied the FCC to mandate that a large part of the spectrum -- referred to as the C-block -- be sold with "open access" provisions attached. Google argued that the winner of the spectrum should follow a few basic network rules -- among others, Google wanted customers who use the lines to be free to use any devices and run any software on those devices. (Currently, wireless companies block certain devices and applications arbitrarily.)

Verizon and other phone companies countered that if the spectrum was sold with access rules, telecom firms would pay less for it, and thus the feds would make less on the auction.

Google answered that challenge artfully: If the government adopted openness rules, the company promised to bid at least $4.6 billion for the radio space, thereby increasing the auction's take.

Last summer, the FCC mandated some of Google's proposed rules. When the auction began a few weeks ago, Google, as promised, put down its $4.6 billion. But Verizon, despite its protestations that open access rules would limit the spectrum's attractiveness, bid beyond Google. Apparently the company was OK with customer-friendly spectrum.

Notice here how Google's lobbying paid off for everyone: Verizon gets the airwaves it wanted. Google gets access to Verizon's customers, who will now be allowed to run the search company's apps on their phones. And we? Right, we get the freedom to do what we want on the wireless Internet. Thanks, Google.

Don't know how this is going to work out, but I gotta give props to Google. I would rather that they had stepped up to the plate, bought the spectrum, and then set up an independent telecom company. But it's their billions, not mine.

The numbers are stunning when you break them down. It would take 20,000 people with a million to spare just to acquire the spectrum. A high tech startup, the business world I know, can do a lot with one person who has a million to spare, and might need to roll up 10-20 million to build up to a going business. It's hard for me to visual a thousand times that much cash.

- mark 3-22-2008 11:43 pm