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Google Loses Spectrum Auction to Verizon but Somehow Wins

Yet another touch of genius

By Vlad Constandes, SEO News Editor

21st of March 2008, 15:09 GMT

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For a couple of days, rumors that the Spectrum Auction has been closed at $19.6 billion have been floating around and even Google confirmed it. The Mountain View-based company did not, however, say who the winner was, as this announcement was to be made by the

FCC alone. The big day came yesterday, when Verizon was dubbed the big winner, with six large regional licenses for the C-Block of spectrum and another 77 smaller licenses in the B-Block. Google won none, but it was the most important player at the table, as many say. AT&T won 227 small licenses that will allow it to fill the gaps in areas of coverage where it is not that strong.

Google is not upset over not winning, because apparently it never intended to in the first place. Its only role in the process was to put the minimum $4.6 billion on the table at the start and by that trigger open device and open application rules that it wanted and lobbied for. As a matter of fact, for the Mountain View-based company, this was a win-win situation. Should their bid have turned out to be the highest, they would have found a way to capitalize on it, even though building and operating a wireless network is far less profitable than the advertising scheme it is running right now. The way things turned out is the other 'win situation' I mentioned, because by placing the bid it was able to dictate the rules, and now Verizon, despite having won the auction, is stuck with them, as Erick Schonfeld of Tech Crunch highlighted.

The bid was not all successful, despite having a clear winner. The D-Block will be re-auctioned after not managing to attract the minimum bid. And it probably won't, for it is reserved for emergency services, not such a profitable horse to bet on.

TAGS:

google news | google | verizon | wireless | spectrum

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