GOOGLE CONFIRMS BID FOR WIRELESS AIRWAVES

Google will bid on coveted airwaves to launch a US wireless network, pitting it against established telecommunications players AT&T and Verizon.

The internet leader said in a statement that it was ready to go it alone rather than rely on partners in bidding in the Federal Communications Commission-run auction of 700-megahertz wireless spectrum due to begin on January 24.

The Silicon Valley-based company said it would make its filing ahead of the FCC deadline on Monday (US time) for companies to declare their interest in joining the airwaves bidding.

"We believe it's important to put our money where our principles are," Chief Executive Eric Schmidt said. "Consumers deserve more competition and innovation than they have in today's wireless world."

Wall Street investors have reacted cautiously to Google's latest move to expand beyond its core web search and online advertising franchises, worried the potential upfront costs and eventual network build-out could exceed $10 billion.

But some analysts have speculated that Google was more interested in ensuring certain requirements for network openness and that it was bidding just to preserve those rules.

"The real question here is whether Google's intent is to bid up to the reserve price and assure that the openness condition stays in place," Stifel Nicolaus analyst Blair Levin wrote to investors. "Or is the real purpose to actually win?"

And despite the excitement surrounding a Google bid, Stifel Nicolaus said in a research note that it suspects Verizon will probably end up winning the auction for the C block spectrum.

Bidding separately instead of assembling a coalition does not rule out Google later signing up partners if it wins the bidding, said a source familiar with the company's strategy. But the FCC has "anti-collusion" rules that prevent deal-making between potential bidders during the auction period.

The source said Google was eyeing the biggest chunk of spectrum up for auction - the "C block" - but also was considering bidding on separate spectrum reserved for public safety agencies but which will allow some commercial uses.

A Google spokesman declined to comment on the company's bidding strategy.

Last chance for new player

The auction is expected to take several weeks, or even months, of daily, back-and-forth bidding, with the identities of the bidders kept secret. Big spectrum bidders typically draw up elaborate strategies, often with input from game-theory experts.

Expected bidders include AT&T Inc and Verizon Wireless, the No. 1 and No 2. US wireless network operators. Verizon Wireless is a joint venture of Verizon Communications and Vodafone Group Plc.