Google Network Could Cost Almost $17 Billion to Build

The search giant remains uncommitted to go it alone in the spectrum auction.

WASHINGTON—It could cost as much as $12 billion and take as long as three years to build a national wireless network from scratch, Googles Washington telecom and media counsel said Sept. 25. That would be on top of a minimum of $4.6 billion to buy the spectrum.

Whether the Mountain View, Calif., search and advertising giant wants to spend that much to become a wireless broadband provider is still an open question, Rick Whitt told students at George Washington Universitys Institute for Politics and the Internet.

"It would cost more money than people think," Whitt said. "Do we really want to take that leap?"

Googles interest in obtaining spectrum to challenge traditional wireless providers such as AT&T and Verizon Wireless has sparked intense speculation since the Federal Communications Commission set the conditions for Januarys 700 MHz auction, largely following the suggestions of Google, other technology companies and public advocacy groups.

The FCC dedicated almost a third of the spectrum available – enough to build a national network – to open access, requiring the winning bidder to allow customers to use the phone or device and applications of their choice on the network.

The decision, which is already being challenged in court by Verizon, is expected to reduce or eliminate interest in the spectrum from traditional carriers who close their networks to selected devices and services. Like Google, AT&T, Verizon and other carriers have not formally announced their auction strategy.

"We may line up some other high-tech companies or smaller telecoms. Some of the second- and third-tier companies may be willing to work with us," Whitt said, adding that Google is willing to talk with "anybody who thinks it makes sense to join us on this."

Whitt also said it might make more sense for Google to make another play for a smaller slice of spectrum in the auction or to focus on emerging technologies such as the use of unlicensed spectrum in the interference buffer zones between broadcast channels or, possibly, mesh networks.

"Google has not made any commitment," Whitt said.

The spectrum up for auction will become available in February 2009 after broadcasters desert the analog airwaves as part of the digital television transition. The spectrum is ideal for broadband delivery as it penetrates mountains, walls and other objects.

Before the FCC conditioned the sale on open access principles, traditional wireless carriers coveted the spectrum as a way to build out and beef up their national footprints. In a Sept. 10 filing with the Court of Appeals for the District of Columbia, Verizon Wireless called the FCC rules "arbitrary, capricious and…contrary to law."

Verizon claims the law requires the spectrum to be sold unconditionally to the highest bidder and that open access rules would unfairly favor one business model over another. Whitt said Google believes multiple business models can be successful in the space.

"Look what happened in the early 1990s with AOLs walled-garden approach," he said. "They said it was the only way to make money."

As for the Verizon lawsuit, Whitt said, "Im a little unclear what theyre doing. Maybe they are trying to cast a little doubt on the [spectrum]."

Spectrum participants must file paperwork with the FCC by late November.


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