Why Google Bid on Airwaves

AP reported yesterday that Verizon and AT&T had won the bids on the “C-block” (not a prison thing, suprisingly) airwaves up for sale by the FCC. Google, who was also in on the bidding, lost out- or so it seems.

Most have argued that it was a good thing Google’s bid lost, pointing out uneasy stock prices, and the fact that most of the company’s employee’s own stock, meaning spending huge amounts of capital to move into a very competitive market is likely to hurt employee moral. As if the people behind Google hadn’t considered this.

Here’s the real reason Google bid:

By bidding, Google ensured that bids climbed to $4.6 billion, and reaching that price requires a special provision from the wireless provider. That provision requires the new wireless network to accommodate any and all mobile devices, including those using Android.

Android is a software stack for mobile devices that includes an operating system, middleware and key applications, which relies on Linux version 2.6 for core system services such as security, memory management, process management, network stack, and driver model.

Oh, by the way, Android is also known as Google’s Android Platform, and will likely allow easy integration of Google Ads, etc. in smart phones.Long story short, it’s an open source development (Apache v2 license) by the Open Handset Alliance. Carriers currently in the alliance include China Mobile, KDDI, NTT DoCoMo, Sprint Nextel, Telecom Italia, Telefonica, and T-Mobile. T-Mobile and Sprint Nextel are the two national US carriers that are signed up; AT&T and Verizon are not.

So, Google has effectively ensured that the new “C-block” has to support a platform that will be very profitable for them!