Even When Google Loses, It Wins

One of the privileges of being a tech darling with a more than $140 billion market capitalization is that you get to throw that weight around and influence the direction of entire industries. Search king Google (Nasdaq: GOOG  ) has been putting its girth to work lately, and even applied to bid on electromagnetic spectrum in order to wrestle away some control that major carriers have on offering wireless devices and applications.

But now that the Federal Communications Commission (FCC) has ended the latest U.S. wireless spectrum auction, it's come to light that Google didn't end up winning any bids for spectrum. Once again, Verizon (NYSE: VZ  ) and AT&T (NYSE: T  ) have walked away with the lion's share of the airwaves, bidding about $16 billion combined out of the nearly $20 billion that the U.S. government raked in. But Google still claimed the results as a victory, even though the epitome of "status quo" telecom walked away with the goods.

So is Google really a winner here? Well, it did avoid paying more than $4.6 billion for a block of spectrum that is designated for "open access" -- where users can theoretically activate any device and any software application. At the same time, it succeeded in pushing the FCC and Verizon to adopt open-access policies and commit to supporting third-party devices and applications for its customers.

But while Verizon's vision of open access is still in the formative stages, any voluntary policies will no doubt be set up to favor Verizon -- not outside solutions from providers like Google. And while the top wireless providers service hundreds of millions of U.S. customers, it's likely only a very small percentage will venture into applications that don't have the backing and support of their carrier.

More certain winners from the auction are the government, which is nearly $20 billion richer. Qualcomm (Nasdaq: QCOM  ) and Dish Network (Nasdaq: DISH  ) also walked away with a significant swath of licenses to further their ambitions. And device and infrastructure manufacturers such as Nokia (NYSE: NOK  ) , Alcatel Lucent (NYSE: ALU  ) , and Samsung will also see more sales from expanded networks.

But it'll take more time to tell whether Google won anything other than a pyrrhic victory. Verizon and AT&T will be paying billions to offer lucrative future services, but Google certainly won't get any share of that lunch for free.

For more Foolishness:


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 605199, ~/Articles/ArticleHandler.aspx, 9/19/2014 3:53:58 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement