• Business Week, Thursday, February 14, 2008 10:45 AM

Google it seems has lost the battle for the coveted C block of wireless spectrum currently being auctioned out by the Federal Communications Commission. Either Verizon or AT&T will win the spectrum, but Google has already achieved its primary goal.

All the search giant really wanted was to open up competition in the wireless market, which thanks to the spectrum rules, would happen (to a certain extent) whether Google won the auction or not. Verizon or AT&T will be required to build a network that allows any kind of device or software to run on it.

In the end, Peter Cramton, an economics professor at the University of Maryland, an important figure in designing the spectrum auctions in the 1990s, believes the auction "will not transform the industry in a fundamental way." One or several auction winners will walk away with the C licenses spectrum, though it won't be Google. The coveted C block will go for less than what many anticipated, while many of the A and B licenses are now "grossly overpriced." The FCC's total gross for the auction is now approaching $20 billion.

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