Google Out of Spectrum Auction, But Wins Right to "Open" Network

Stifel Nicolaus analyst Rebecca Arbogast believes that Verizon will win the C block spectrum auction, Forbes says, This means that Google won't have to shell out $4.6 billion on spectrum--and, importantly, that any network built with the spectrum will have to be open (thus benefiting Google)

This could explain why Google's stock reversed course yesterday in a horrific tape--charging higher as the market collapsed.  Investors have been concerned that Google will burn $5 billion of cash on spectrum and possibly another $5-$10 billion on infrastructure, completely changing the dynamics of its business model.

If Verizon wins the C block, our understanding is that Google will now get to have its cake and eat it, too. Because it was willing to spend $4.6 billion, the winner of the license (Verizon, according to Arbogast) will have to make the network open.

Bidders are bound to secrecy, and Arbogast's information still sounds speculative at this point:

"Verizon wants more spectrum to close the gap between it and AT&T," said Stifel Nicolaus analyst Rebecca Arbogast. Verizon owns 49 megahertz of spectrum compared to AT&T's 75 megahertz. "I'm reasonably confident that Google does not have the spectrum now," she added.

Follow-up: Spectrum Auction: Why 'Open' Access May Underwhelm