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Google won't bid in FCC's 600 MHz incentive auction

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Internet giant and Android creator Google (NASDAQ: GOOG) said it will not bid for 600 MHz spectrum licenses in the FCC's upcoming incentive auction of TV broadcasters' spectrum. Google will join Sprint (NYSE: S), Charter Communications (NASDAQ: CHTR) and other tech heavyweights in sitting out the event.

"Like all those interested in improved connectivity and equitable access, we'll be following the upcoming spectrum auction closely. That said, we have not filed to participate," a Google representative told Reuters.

Google also did not participate in the FCC's landmark AWS-3 auction that ended a year ago with almost $45 billion in total winning bids. However, Google did participate in the FCC's 700 MHz spectrum auction in 2008 that raised a total of $18.9 billion in winning bids -- but Google did not end up purchasing any spectrum.

Despite its plans to sit out the auction, Google continues to play a major role in the U.S. mobile industry. It is the company behind the Android operating system -- the world's most widely deployed smartphone OS -- and last year it launched an MVNO service called Project Fi that allows users to access public Wi-Fi networks alongside the cellular services of both T-Mobile US (NYSE:TMUS) and Sprint.

Google is one of several wildcards that industry watchers speculated may participate in the FCC's 600 MHz auction. The auction, scheduled to start at the end of March, is unique in that it will involve a "reverse" portion where TV broadcasters will sell their unwanted licenses to the FCC, and then a traditional "forward" auction where companies like AT&T (NYSE: T) and Verizon (NYSE: VZ) will bid on spectrum licenses.

Besides the nation's two largest wireless carriers, other companies that have indicated they will participate in the auction include T-Mobile, Comcast (NASDAQ: CMCSA), Dish Network (NASDAQ: DISH), investment company Columbia Capital and Rama, a firm backed by investor Chamath Palihapitiya that said it may bid up to $10 billion in the 600 MHz auction.

Sprint, still struggling to turn around its business and implement a small cell network deployment, confirmed last year it will not bid in the auction. And earlier this month Charter CEO Tom Rutledge cited the company's pending acquisition of Time Warner Cable and Bright House Networks, saying uncertainty about the eventual outcome of the deal would likely preclude its involvement in the auction.

The FCC's upcoming incentive auction of TV broadcasters' 600 MHz licenses is likely to fetch only $25 billion to $35 billion in total winning bids, or roughly $1 to $2 per MHz/POP, according to J.P. Morgan. That's far below the $2.68 MHz/POP generated by the landmark AWS-3 auction that ended a year ago with almost $45 billion in total bids. It's also less than half of some analysts' estimates for the upcoming 600 MHz auction.

For more:
- see this Reuters article

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J.P. Morgan: FCC's 600 MHz incentive auction likely to fetch only $25B to $35B
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