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Spectrum Auction: Google wins by losing

Verizon beats out Google in FCC's spectrum auction, but because Google gets access to a new fast, open network without having to pay to build it, the company still wins.

The FCC's 700MHz spectrum auction is over and Verizon won. But so did Google, which made a bid that wasn't chosen.

There's a good chance that Google didn't even want to win, as my colleague Maggie Reardon suspected last year. It didn't make any sense for Google to get into the telecom business.

Why would Google bid if it didn't intend to win? By bluffing its way through the bid, Google was able to drive the price high enough to get the FCC to adopt open-access rules it pushed for that require the network operator to allow any device or application to connect to it.

Now, Google gets a fast, open network for all of its apps and services (and Android-based devices) without having to spend money or resources building it. Meanwhile, carriers will be happier to partner with Google than compete against it.

Google's influence has already had a ripple effect as wireless carriers see the writing on the wall. In November, Verizon said it would open its existing mobile network to any cell phones and allow people to run third-party applications on the phones.

Did Google pull one over on the telco industry? We may never know. But it doesn't seem they're exactly moping in the halls at the Googleplex:

"We congratulate the winners and look forward to a more open wireless world," Google telecom and corporate lawyers wrote on the Google Public Policy Blog. "As a result of the auction, consumers whose devices use the C-block of spectrum soon will be able to use any wireless device they wish, and download to their devices any applications and content they wish. Consumers soon should begin enjoying new, Internet-like freedom to get the most out of their mobile phones and other wireless devices."

Asked to elaborate, a Google spokesman said the company would have more to say once the FCC anti-collusion rules lift completely.

In the meantime, congratulations are in order to Verizon and Google.