Google is among more than 260 companies vying for wireless licenses to be auctioned in January, which could allow the search giant to extend its reach to the mobile Internet. Google has an advantage over many of its rival bidders, as it has amassed a war chest of several billion dollars to bid for the cherished telecom licenses.
The Federal Communications Commission said Tuesday it had received 266 bid applications for the licenses ahead of the January 24 auction. The licenses have become freed up for auction as analogue television broadcasters have to switch to a digital format by a 2009 deadline.
The licenses would enable mobile phone users to access the Internet more readily and enable companies like Google to market more online services to consumers. "Google cannot grow fast enough relying solely on the PC-driven Internet, according to research firm eMarketer. "It must extend search marketing to new interactive platforms, new markets and new advertisers who aren't currently online."
Google is developing new software, called Android, which could be used to power a new generation of mobile telephones, but its success depends heavily on securing a wireless license.
The FCC decided the future networks would be open to any mobile device, contrary to existing networks where operators can choose the brands and services. A crowded field of bidders is jostling to participate in the auction. A total of 96 companies has been cleared to participate in the bidding so far, while another 170 firms are seeking FCC approval to join the auction.
Google announced in July that it was gearing up for the auction and had set aside a hefty 4.6 billion dollars to enter the contest. The FCC said a minimum bid for a "C Block" spectrum will be around 4.6 billion dollars, the block would enable Google to gain a national footprint.
But other bidders are also preparing their offers, suggesting competition will be fierce for the licenses. Telephone giants ATamp;T and Verizon, regional telecom firms Alltel and Leap Wireless, telecom equipment group Qualcomm and even an oil firm, Chevron, are all vying to snap up licenses.
Smaller companies, such as Vulcan which is backed by a co-founder of Microsoft, Paul Allen, and wireless Internet group Towerstream, are also hoping to win licenses.
Despite heated speculation, technology trend-setter Apple has not joined the ranks of companies vying for one of the mobile telephone licenses. The FCC is planning to auction off four "blocks" of 700 MHz spectrum including three broadband spectrums and one block which would give an owner national coverage, the C Block.
The smaller firms are bidding for local licenses that analysts say could probably be bought for under one million dollars. "From a very high-level public policy perspective, Congress and the FCC want to see a couple of new players make it," said Scott Ellison, vice president of mobile and wireless communications at the IDC market research firm.
Analysts believe many of the bidders are speculators who would likely resell the licenses in a number of years in the hope of making a fat profit. The auction could shake up the wireless landscape radically and enable new entrants, particularly Google if it is successful, to challenge other companies operating in the field. Apple has teamed up with ATamp;T to support the marketing of its iPhone, a cell phone with Internet capability, which it launched earlier this year.
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