Google’s Tense Bid for C Block

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auction3.jpgADOTAS – Google came close to winning the federal auction for wireless licenses … maybe too close.

The spectrum would have cost Google a whopping $4.71 billion – a huge investment (it would have been the company’s biggest in history) no matter what, but considering the fact that they recently shelled more than $3 billion for DoubleClick and their plummeting shares, the sense of relief is understandable.

Google and others started publicly discussing the behind-the-scenes auction drama after anti-collusion rules were lifted yesterday.

In July of 2007, Google pledged to bid the reserve price ($4.6 billion) for a set of frequencies known as the C block as long as the Federal Communications Commission imposed “openness” conditions on it, The New York Times reports.

The F.C.C, imposed two conditions – requiring the future owner of the C block to open its network to devices and services from third parties.

Google’s didn’t care if it won the actual bid; it just wanted to make sure that the openness condition would be in effect – so that its range of services would be available on phones operating on the C block.

“Google’s top priority heading into the auction was to make sure that bidding on the so-called ‘C Block’ reached the $4.6 billion reserve price that would trigger the important ‘open applications’ and ‘open handsets’ license conditions,” Richard Whitt, Washington Telecom and Media Counsel, and Joseph Faber, Corporate Counsel for Google, wrote on Google’s official blog. “We were also prepared to gain the nationwide C Block licenses at a price somewhat higher than the reserve price; in fact, for many days during the early course of the auction, we were the high bidder. But it was clear, then and now, that Verizon Wireless ultimately was motivated to bid higher.”

Company insiders told the Times that Google was relieved it didn’t win the bid.

“There were definitely some people at the company that had cold feet,” said Larry Alder, a product manager in Google’s auction team.

Google placed its final $4.71 bid on Thursday, January 24.

“We kept hitting the ‘refresh’ button on the browser” to see if others would bid higher, Minnie Ingersoll, a product manager on Google’s auction team, told the Times.

Some of the refreshers may have developed carpal tunnel syndrome: no one bid higher for days. Then on Tuesday, Verizon finally bid $4.74 billion.

Google declined to top it.

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