Perhaps Google Can't Lose in 700 MHz Auction

If Google succeeds in getting a mandatory wholesale access requirement for the C block of spectrum, it wins. Whether Google itself wins the spectrum (probably not) or not, somebody will, so Google and Google can lease spectrum directly, or work with somebody else who will lease spectrum on its behalf.

Even if it entirely fails to win a mandatory wholesale clause, Google is no worse off than it used to be, because existing provisions for the 700-MHz equivalent of "Carterfone" will still make it easier for Google and its ecosystem to create features, devices and applications optimized for mobility.

One fact seems certain: as hard as it is to build a "wholesale-only" national infrastructure play, if mandatory access conditions are attached to the C block of frequencies, the business case will be harder for owners of retail spectrum in the other two blocks. The pricing umbrella of course will be set by the C block providers.

Clearwire and Sprint will face some issues because the radio propagation characteristics of the 700 MHz spectrum are much better than those for the 2.5 GHz blocks Clearwire and Sprint will be using to build their national 4G network. Like the old UHF broadcast stations who used the 700 MHz frequencies, signals got through walls pretty easily, even to "rabbit ears" antennae. Digital propagation should be better, since today's signal processing chips can reconstruct a signal from weaker or more refracted signal sources.

In fact, he 700 MHz signals should provide the "best" "through the walls" performance of any wireless networks, period. The higher frequencies conceivably will offer higher raw bandwidth potential (for reasons related to the more rapid oscillations of the radio signals at higher frequencies).

And there remains the possibility that the auction rules might emerge in final form someplace between formal wholesale access for the C block and hard-to-enforce "Carterfone" principles. In any event, Google's odds of winning are higher than its odds of simply being no worse off than it currently is.