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Is Google serious about wireless?

Google (GOOG) is considering making a bid for a swath of RF spectrum that TV broadcasters are vacating as TV moves toward digital high def. The FCC intends to award wireless licenses within this frequency spectrum as soon as rules governing the auction and use of the spectrum are finalized.

As announced in a letter to the FCC, Google has certain pre-conditions they wish to see met before they enter the bidding. The pre-conditions relate to "openness". According to the Wall Street Journal, Google is requesting that the FCC require that winners of licenses covering a large portion of the spectrum "let consumers use any compatible wireless devices and software and open the network to resellers and other service providers." Google is requesting that the draft rules, which do include similar language, be made more specific and enforceable.

The Journal further reports that "Google wants the spectrum owner to operate it at least partly on a wholesale basis, requiring the owner to offer access to its wireless networks to other companies who want sell wireless services."

Google has said it is prepared to spend $4.6B or more. Chris Sacca, their "head of special initiatives", indicates that if Google won a portion of the spectrum they might work with Nokia, who is trying to establish more of a presence in the US, or some of the regional wireless carriers like MetroPCS or Leap Wireless.

Google has attempted to dabble in this kind of thing before. At one point, they were bidding to provide free Wi-Fi to San Francisco. During the debate over this initiative, it was pointed out that Google Talk, their instant messaging program, includes voice-over-IP (VOIP) calling.

So it appears there may be a couple of strategies that Google could have in mind. They have said many times that focusing on mobile services is an area where they see growth potential. Search, maps, mail, news, YouTube and advertising could be primary applications and are all currently available via Google Mobile. But what about basic communication: voice, text messaging or instant messaging? Is that also part of the master plan?

A handset combining Internet access and cellular with Google Talk built in or available as a software add-on could be a real challenge to existing wireless telcos. Google Talk is based on a protocol called XMPP. Unlike most instant messaging protocols, XMPP is based on open standards. Like e-mail, it is an open system where anyone who has a domain name and a suitable Internet connection can run their own server and talk to users on other servers. The standard server implementations (Jabber, for example) and many clients are also free/open source software. Is Google looking to establish free or low-cost messaging and VOIP over cell phones?

No one expects Google to build their own wireless network but with their size, influence and deep pockets it is not unreasonable to imagine them partnering with a carrier willing to accede to Google's wishes regarding "openness" in order to jumpstart growth and increase market share. For the traditional carriers, VOIP would leave them and their per-minute billing model out in the cold.

Before you run out and sell your Verizon or AT&T stock, though, be aware that Google has an uphill battle in front of them. The established telcos will certainly fight the opening of wireless networks and, big as Google is, the major telcos are formidable adversaries. Indeed, the wireless carriers and their industry groups are already responding derisively. Furthermore, it must be said that Google's Chris Sacca is given to making the grand gesture without always being able to deliver the goods. Still it's always fun speculating on what Google's next move to take over the world might be.

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