By Molly Peterson
Jan. 31 (Bloomberg) -- Google Inc. succeeded in its push to force the winner of airwaves being sold by the U.S. government to open its network to any mobile device.
One bidder offered $4.71 billion for the biggest set of airwaves being auctioned, surpassing a $4.6 billion threshold that triggered so-called open-access rules, the Federal Communications Commission said today on its Web site. The agency didn't reveal which company made the bid.
The rules aim to boost consumer choice by requiring the winner of the so-called C-block airwaves to let any legal wireless handset or program use the network. Google, owner of the most popular Internet search engine, may now exit the auction after winning the conditions, said Jeff Lindsay, an analyst at Sanford C. Bernstein & Co. in New York.
``What people don't know now is if Google will drop out of the bidding and allow someone else to win,'' Lindsay said today in an interview. ``It's a totally different scenario if Google goes all the way.''
The total value of all bids climbed 4.3 percent to $15.6 billion in the latest round, exceeding government projections and making the airwaves sale the largest ever in the U.S.
Google, AT&T Inc. and Verizon Wireless are among 214 companies participating in the auction, which includes 1,099 slices of spectrum. The C-block comprises about a third of the airwaves, which will become available when television broadcasters switch to digital signals in 2009.
Likely Bidders
Opening the network to more devices would help Mountain View, California-based Google sell more advertising on phones by expanding consumers' access to mobile Web content. Google and Verizon Wireless are likely bidders for the C-block, Stifel Nicolaus & Co. analyst Blair Levin said today in a note.
``We know that the C-block will have a winner, and that the open-access conditions will be triggered, but we cannot know now who that winner is,'' Levin said.
Google rose $16.03 to $564.30 at 4 p.m. in Nasdaq Stock Market trading. AT&T gained $1.14 to $38.49 in New York Stock Exchange composite trading. Verizon Communications Inc., which owns Verizon Wireless with Vodafone Group Plc, advanced 53 cents to $38.77.
Google spokesman Adam Kovacevich and Verizon Wireless spokesman Jeffrey Nelson declined to comment, citing FCC rules that bar participants from discussing the auction.
`Important Transformation'
FCC Chairman Kevin Martin said the open-access rules will spur an ``important transformation'' in the wireless industry.
``The openness requirement is important both in terms of the innovation it will lead to on the edges of the network and the ability of consumers to take advantage of that innovation,'' Martin said today during a briefing with reporters.
The airwaves are ideal for mobile Web access because they can travel long distances and easily pass through walls. Wireless carriers plan to use the spectrum to offer more high- speed data services, such as video and music downloads.
Martin said he's optimistic that someone will buy a stretch of public-safety airwaves known as the D-block, even though it has fallen $858 million short of its minimum price. No one has topped a $472 million offer made on Jan. 24.
Auction rules require the winner of the D-block to build a nationwide network that emergency responders will share with commercial carriers. If bids don't reach at least $1.33 billion, the FCC may modify the rules before putting the D-block up for sale in a new auction.
``I'm not ready to give up yet on the D-block,'' Martin said. ``We still have many, many more rounds to go.''
The FCC will hold five more bidding rounds tomorrow, giving participants a chance to top earlier offers. The auction will continue with several rounds per day until there are no more bids on any of the 1,099 licenses. The highest offers are announced after each round, though not the names of bidders. The final winning bids will be revealed after the auction ends.
To contact the reporter on this story: Molly Peterson in Washington at mpeterson9@bloomberg.net
Last Updated: January 31, 2008 18:44 EST
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