Interestingly, the open access C block was the only one to march past its reserve price of $4.6 billion (courtesy of the Goog), with a winning bid of $4.744 billion, probably by Verizon. The winners can claim their prize in less than a year. Good times for all to ensue! [RCR News]

As Saul Hansell points out, if we see the bidding continue to escalate, it indicates that Google might actually be playing to win (though it's doubtful), as long what we're seeing isn't an influx of bidders locked out of the B block pool by rocketing prices—driven up, no doubt, by big telcos looking to patch up holes in their 700MHz network.

Like say, AT&T, whose purchase of $2.5 billion worth of 700MHz spectrum licenses back in October finally got the FCC rubber stamp earlier today. Regardless, the picture will start getting clearer a lot quicker as of tomorrow, when the auction moves into the higher stakes phase 2, where entrants are basically forced to bid hard and fast. [Bits, PC World]

WTF Is This 700MHz Deal?
We're not getting into the technical nitty-gritty of the electromagnetic spectrum. Just know that there's only a finite amount of it for broadcasting and telecommunications, so spectrum licenses—the right to use a particular chunk—are really valuable. Analog TV is currently broadcast over the 698-806 MHz range of the UHF band: the ballyhooed "700MHz spectrum." But the FCC will kill off analog TV on Feb. 19, 2009, and will auction off the right to use it for other purposes.

Why Would Someone Pay BILLIONS for It?
Every frequency band has slightly different physical attributes. The 700MHz band penetrates walls fairly easily and travels well, making it perfect for either cellular or long-range wireless broadband that could provide an invisible alternative to DSL and cable. It could simply augment a major telco's existing holdings with a powerful wireless network, but it could also mean a lucrative new ISP for Google or some other non-telecom behemoth.

Going Once...
So here's how the auction will work. There are five blocks A-E, divided up regionally. Everyone had to secretly declare their intent to bid to the FCC by Dec. 03, and can't talk about it at all now. Cue Google's not-so-secret entrance last week. The actual auction will take place on Jan. 24 with a minimum bid of $4.63 billion to get at the C block. Winners can pick up their prize in Feb. 2009.

The reason all the excitement's been over what goes down with the C block, is that Google convinced the FCC to load up with "open access" provisions: The winner has to make the network open so any "safe" device use it, plus they have to make their own networked devices open as well—the exact opposite of what Verizon's handsets are right now. Before Verizon's recent Mitt Romney-likerevelation that open networks are the One True Path, the veteran telecom fought the openness provisions with every trick in the book, from backdoor deals to lawsuits. Verizon actually sued the FCC over this exact provision—that the C block winner allow any device on the network—that it is celebrating with pig-in-shit PR glee right now. The rules (thankfully) stuck, and Verizon changed its tune.

The Players
Here's a list of the bidders:
• Google, obviously
• Verizon and AT&T, the other two heavies
• Cox Cable, probably looking to start a wireless internet service
• DISH Network
• Leap Wireless
• Frontline Wireless, a startup

Here's who is not in:
• Time Warner
• Comcast
• Sprint
• Clearwire

Big investments are too risky for all of the above, plus those last two already have their plates full trying to get their busted-ass WiMax deals off the ground.

How It Might Go Down
The educated guess is that Google is bidding to not look like a dick. It may not be playing to win, but after all of the previous big talk and the launch of the OHA business, it needs to show up. Evidence for our skepticism: Google is going it alone, and was already looking for ways to finance just the minimum $4.6 billion bid. Circumstantial evidence: Google's statements of late haven't been very enthusiastic about the prospect of winning; the ol' college reading between the lines says it's not planning to. But, it did get the open access provisions it pushed for, so there's really no need to finance the network on top of it.

AT&T just bought a massive chunk of 700MHz spectrum from Aloha Partners for $2.7 billion a couple months ago, so it's probably going to focus its bidding on the regional licenses to fill in the gaps.

Our feeling has been that Verizon's going to be the juggernaut, even before it gets all lovey-dovey with third-party devices. It's been rabble-rousing over the rules for months—trying to get FCC chairman Kevin Martin to shitcan the open access provisions—and spitting back and forth with the Google the entire time. Reading between the lines again, it's clear it's always intended to bid win.

In fact, Verizon's 700MHz dreams probably played a significant role in opening up the network, whatever other feel-good reasons their PR department might tell us. Why? For one, to placate Kevin Martin, who's pretty hot on openness and competition. He koshered the open-access rules in the first place. It'll be interesting to see if Verizon tries to go war post-auction to fight the provision requiring unlocked hardware on the C block, since its open-network announcement implied that Verizon's own gear would stay locked down like Guantanamo.

Our money is on Verizon for the total C block win.

The Afterglow
Verizon winning the C block pretty much kills previous utopian notions of a mythical third pipe, outside the grasp of the vested telcos, bringing glorious open internets to us all. However, coupled with Verizon's recent announcements it could spell progress. The FCC probably won't let it go back to its evil ways. And you can expect Google to be all up on that, pushing search, services, ads and eventually hardware. The little guy might just get his crack at putting his dream device on the network too. We're warming up the soldering iron!

Google's coming out statement—essentially "whoever wins, everybody does"— was noticeably limp. No fire in their words probably signals no fire in their bid, basically.

On the other hand, Verizon throwing open its network is a decidedly hard throwdown with regard to its auction intentions. The winner of the 700MHz's contentious C Block is required to have such an open network (though only on that chunk), meaning Verizon may be strongly signaling its intent to bid and win. Gird your loins for endless "It's the Network" catchphrases, just in case. [MocoNews, CNN]

back at its headquarters, Google is already operating an advanced high-speed wireless network under a test license from the FCC, according to people familiar with the matter. The company has erected transmission towers on its campus for the network. Prototype mobile handsets powered by the Android software are currently running on it.

More over, according to the usual "people familiar with the matter," they're grinding out a plan to toss in all $4.6 billion or more all on their own because going in with partners promises complications in bidding setup and outcomes, as well as pissing off company A by going in with company B.

Why even jump into the messy, messy world of network operation when they've already got a hand in the jar with Android? The feel-good reason is that Google wants networks to be more open and competitive to drive more innovation and better, unrestricted services without artificial carrier walls and lockdowns.

The selfish side is that open networks mean carriers can't make it hard to use Google's wares or make Google pay carriers to get at customers. There's also the potential revenue of subscriber fees—hey, open doesn't mean free—and ads across the network, according to at least one analyst group.

Whatever Google decides, we'll know by Dec. 3, the deadline for declaring an intent to bid. And should they win, don't cream your jeans about the wild, woolly West of an open wireless network just yet, since Google—and any other winners—won't get their hands on the network until 2009, when analog broadcasts go dark. [WSJ]

It supposedly has an "innovative receiver design" for improved noise shielding, which, to quote a friend, is necessary "so it won't interfere with everything else and give the FCC a bitchfit." Other features include: TCP/IP data rates over 50Mbps, scalable channel bandwidths of 5/10/20/40 Mhz, advanced QoS, 256-bit security, and full compatibility with available Linux drivers. No price or release date—but it probably won't actually matter for a couple of months anyway. [Ubiquiti via Daily Wireless]

The C block has a reserve price of at least $4.63 billion, which coincidentally matches what Google has pledged to spend on the auction. If it's not met, it goes up for auction again, sans open access provisions. Also, the value of entire spectrum up for grabs is now capped at $10 billion, with companies making less than $40 million picking up a discount on their bids. Finally, the auction's been pushed back by about a week to Jan. 24, probably to give companies more time to find their checkbook, since it looks to be a cash-flinging bloodbath. [Electronista]

The first rule says that auction winners "shall not deny, limit, or restrict the ability of their customers to use the devices and applications of their choice..." while the second states that "no licensee may disable features on handsets it provides to customers...." Verizon's apparent rationale is that as long as unlocked devices from mythical other parties can connect to the network, competition—the raison d'être of the rules—is preserved.

While Google's obviously got a stake in the outcome—they're debating on jumping into the auction, pending the actual final result of the rule dispute—overall, I agree with them. If the rule vote in July was intended to be final it should stay that way, and an open-access network with open devices and applications looks to be far more promising for consumers than what we're currently stuck with. I mean it's possible someone likes the way current US cell carriers and telecoms do their business, but I've yet to meet them. [Google, Image via Flickr]