FCC’s 600 MHz Incentive Auction to Start End of March, but Surprisingly Google Won’t Bid

Internet giant and Android creator Google clearly stated that it will not bid for 600 MHz spectrum licenses in the FCC's upcoming incentive auction of TV broadcasters' spectrum. Google will join Charter communications, Sprint and others sitting out the event. 

"Like all those interested in improved connectivity and equitable access, we'll be following the upcoming spectrum auction closely. That said, we have not filed to participate," a Google representative said. 

Also, Google did not participate in the FCC's landmark AWS-3 auction that ended a year ago. However, Google was a part of the FCC's 700 MHz spectrum auction in 2008 - but Google did not purchase any spectrum.

Regardless of its plans to sit out the auction, Google continues to play a major role in the U.S. mobile industry. It is the company behind the Android operating system, the world's most widely deployed smartphone OS. Moreover, it launched an MVNO service called Project Fi last year that allows users to access public Wi-Fi networks alongside the cellular services of both T-Mobile US and Sprint.

Besides the nation’s two major wireless carriers, other companies that indicate participation in the auction include- T-Mobile, Dish Network, Comcast and more. 

Sprint, another big name striving to turn around its business and implement a small cell network deployment, has also confirmed last year that it will not bid in the auction. Earlier this month, Charter CEO Tom Rutledge said “the company's pending acquisition of Time Warner Cable and Bright House Networks, and uncertainty about the eventual outcome of the deal would likely preclude its involvement in the auction.”

According to J.P. Morgan- “The FCC's upcoming incentive auction of TV broadcasters' 600 MHz licenses is likely to fetch only $25 billion to $35 billion in total winning bids, or roughly $1 to $2 per MHz/POP.” This is far below the $2.68 MHz/POP generated by the landmark AWS-3 auction that ended a year ago with almost $45 billion in total bids. It's also less than half of some analysts' estimates for the upcoming 600 MHz auction.

AT&T, Verizon, Samsung, Apple in 2014: A Competition Review

It often seems obvious for executives from wireless carriers to comment at investor conferences on how they think the industry is fiercely competitive. Such a comment sounds even more obvious when it comes from executives at AT&T Mobility and Verizon Wireless. However, the year that went by has justified their statements thoroughly as every other cellphone network carrier felt the tremors of stiff competition in the marketplace.

In reality, the pricing competition started gaining momentum right from January of 2014 and only kept picking up pace during the rest of the year. In fact, it got a real boost when the merger dialogue between Sprint and T-Mobile US broke down. Although financial analysts have been chafing about the probable impact of the ongoing price competition on the long-term margins and investment of the network carriers, it is, somehow, a great development for customers.

In the smartphone arena too, the pricing competition is pacing up as Google, Microsoft, Mozilla and their device partners look out for fresh customers in the emerging markets. Parallel to this has been an unusual development that saw average selling prices going down with low-cost providers like Xiaomi coming up. Although Samsung Electronics and Apple are secure in their own niches as the No. 1 and No. 2 smartphone players, respectively, pressure has mounted as well and is greater than what they have been facing until now.

Further on, the overwhelming $44 billion auction for the AWS-3 spectrum has brought to the surface carriers’ desire for extra network capacity. The hefty amount being spent in the auction highlights even better the challenges that smaller carriers are facing. It is a bigger problem for those who have realized that they are falling short of the resources to continue and compete with the Tier 1 operators. As a result, such operators have entirely abandoned their wireless business.

Competition certainly heated up in 2014 on various accounts this year, and it only appears ready to heighten up ahead into 2015. The resulting disruption should then hopefully illicit greater innovation from carriers and device manufacturers.