"Google is willing to do anything necessary to introduce some competition into this space and to really drive the prices of service to where they are most affordable to the broadest number of people," Sacca said in a recent interview. "That entails everything from building and operating a network, if necessary, to partnering with the vast number of companies left out of this game--for whom US$5 billion is an insurmountable hurdle to participate meaningfully in an auction that could introduce true competition--to any of the existing carriers, if they want to put users first in their business models and prioritize those customer experiences."
The company is pushing the FCC to adopt rules in the upcoming 700MHz auction that would ensure winners of certain spectrum licenses would have to adhere to four openness principles. These include guaranteeing that consumers can use any device or software on the network, as well as forcing winning bidders to offer spectrum at reasonable wholesale prices to ensure that small companies can get access to wireless capacity to build competitive wireless services.
AT&T and Verizon Wireless, the two largest wireless operators in the United States, say they would accept an open-access rule for devices, but they are against any rules guaranteeing open access for companies seeking to buy wholesale capacity.
The FCC is expected to vote on these rules on Tuesday.
Greg Sterling, a principal of Sterling Market Intelligence, said he does not know what the wireless spectrum bid means for Google's products, but "the fact that they're doing all these simultaneous things reflects their perception that mobile is a strategic area that they have to aggressively pursue".
He said Google's executives have strongly implied to him that the company is not planning to become an Internet service provider or a mobile virtual network operator. "They want to talk to partners and potential partners," not compete with them.
The ultimate goal for Google, he said, seems to be in improving the user experience. He pointed to "Goog 411", a voice-activated search tool for mobile devices.
"They're trying to improve usability so they can drive adoption," he said.
Some bloggers have speculated that Google is so interested in improving the user experience that it might go ahead and develop its own handset. Google has not said whether it would get into the handset market, but Sacca made it clear in a recent interview that Google feels there is plenty of competition in the device market.
"I think there is a healthy environment of competition and innovation in the device market worldwide," he said. "It's just the channel that discourages that kind of innovation here in the United States. For example, you see the Nokia E61, which is a combined Wi-Fi and 3G device, that when it came to the United States suddenly became the E62, and the Wi-Fi was missing. We have seen examples where some devices have the ability to send photos back to a computer via Bluetooth, but carriers have restricted that transfer to make sure that the photo traffic has to go over their network."
Analysts say it's more likely that Google would continue to strike deals with phone makers. The company already has announced partnerships with Samsung, LG Electronics, Palm and Motorola. And some of its applications come embedded on some Blackberries and Windows Mobile devices.
Search Engine Land's Sullivan said he doesn't think the reports of Google building its own phone are realistic.
"Google has no experience with phone stuff," he said. "They've got partnerships with a lot of carriers, and if they roll out their own phone they threaten those partnerships. They could try to do their own wireless device down the line, but on a different frequency. So it would be not so much a phone as a mini-computer. Then you could use Google Talk to make calls."
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