Google is preparing to bid at least $4.6 billion for wireless spectrum to be bought at the Federal Communications Commission's January auction, the Wall Street Journal reported Friday. The company is planning to bid without partners. According to the Journal, Google will finance the bid with its own cash and possibly some borrowed funds. The company is beta-testing a wireless network in preparation for running a full-scale national mobile carrier in the event that it wins the spectrum. The Journal writes that Google's expansion into wireless "could potentially expand the availability and decrease the cost of high-speed mobile Internet access to consumers." "Our goal is to make sure that American consumers have more choices in an open and competitive wireless world," a Google spokesman said. The move is risky, however: it could draw resources away from Google's areas of "core expertise" and turn telecom carriers into hostile competitors, some of whom have prior relationships with the company. At the auction, Google could find itself head-to-head with AT&T and Verizon Wireless, both of which are in the market for more spectrum to expand their broadband Internet offerings and services. Some observers believe Google does not sufficiently appreciate "the challenges of operating a network, providing customer service and gaining traction as a new entrant in a crowded wireless market." Others are more sanguine: "[B]ecause it's Google, because of the power of their brand and because they understand networks really well, it might work," said Stifel Nicolaus & Co. analyst Blair Levin.
Commentary: Google Dangles $4.6 Billion Bid For FCC Wireless Platform • FCC Spectrum Rules Favor New Entrants Over Incumbents -- Source • Is Google Serious About Bidding For Wireless?
Stocks to watch: GOOG. Competitors: T, VZ. ETFs: PTE, WMH, HHH, FDN
Earnings call transcript: Google Q3 2007