What Would Google Do with the 700 Mhz Spectrum?

After months of speculation, Google announced in late November that it will participate in the auction of the 700 Mhz spectrum which will begin on January 24, 2008. With that question off the table, speculations continue over what Google would do with the spectrum if it won the auction. Given the fact that Google has put its resources behind Android, an open mobile handset operating system, I would not expect the company to enter as mobile service provider. Furthermore, given the high capital requirement and modest return from providing wholesale broadband access, it also appears unlikely that Google will become a vendor of wireless spectrum capacity. Rather, I believe that if Google wins, it will lease the entire capacity to a company that will build a network and provide Google priority access to it. Remember, Google is a big supporter of net neutrality for obvious reasons. Should net neutrality not become reality (let me mention that the economic support for net neutrality are rather weak), then Google still has priority access to a network and thus will not need net neutrality. Let’s call it an expensive backup plan.