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Google is lining up financing to bid on wireless spectrum in the Federal Communication Commission's upcoming 700MHz auction, and it's already built a small high-speed wireless network at its headquarters in Mountain View, Calif., to test out what it could do with the spectrum, the Wall Street Journal reported Friday.

The Journal cited sources saying the company is planning on bidding in the auction, set to take place early next year. Google has obtained a test license from the FCC that it's using to test technology on a small wireless network on its campus, the article said. And it's supposedly using prototypes of handsets that use the company's newly announced Android software.

The Journal's revelation that Google will bid on the spectrum shouldn't come as a huge shock. Google's CEO Eric Schmidt has said before the company would likely bid in the upcoming auction.

After all the fuss and hoopla surrounding Google and the auction, it would seem ridiculous if the company didn't bid. Google lobbied the FCC hard for rules to be passed as part of the auction that would require license winners to allow open devices on that part of their network.

So what happens if Google actually wins some of this spectrum? That's the big question everyone is asking. It could build its own wireless network to compete against other operators like AT&T and Verizon Communications.

But building and operating a network is hard work and very expensive. I've said from the very first time Google was mentioned as a possible bidder in this auction that I don't think it will acquire spectrum to offer consumer wireless service. It just doesn't fit into the company's business model.

Google develops and delivers applications. It makes money via advertising. And all of this can be done without taking on the expense of becoming a wireless operator.

That said, it makes a lot of sense for Google to lease spectrum to other service providers that can put up the cash to build and operate the wireless service. In this scenario, Google maintains control of the asset without having to deal with the maintenance, management and customer service issues of running the network.

If you think about it, this approach makes a lot of sense given how Google has already positioned itself in the wireless market. The Android software was not designed for any single phone developed by a particular handset maker. It also wasn't designed to operate exclusively on a single carrier's network. Instead it is an open software platform that the company hopes will be on hundreds of different cell phone models running on dozens of carrier networks.

So while I know it sounds a lot sexier to think of Google as an alternative to AT&T and Verizon Wireless, I think it's not very likely. Of course, I could be completely wrong. But I was right about the Gphone not really being a phone, and instead being a software platform.

Federal Communications Chairman Kevin Martin on Tuesday threw his support behind Google's Open Handset Alliance.

On Monday, Google officially unveiled Android, its new mobile phone software. It also announced the Open Handset Alliance. Thirty-four companies have said they will join the alliance, which will work on developing applications on the Android platform. Members of the alliance include mobile handset makers HTC and Motorola, mobile operators T-Mobile and Sprint-Nextel, and chipmaker Qualcomm.

It should come as little surprise that Martin would support the alliance. Earlier this year, he made open devices a requirement in the rules for the upcoming 700MHz spectrum auction, which are expected to get under way in January 2008. Essentially, the rules will require winners of the spectrum in certain slivers of the 700MHz to be required to allow any device to connect to the network.

"As I noted when we adopted open network rules for our upcoming spectrum auction, I continue to believe that more openness, at the network, device, or application level, helps foster innovation and enhances consumers' freedom and choice in purchasing wireless service," he said a statement.

Google, which lobbied for open access rules for the 700MHz rules, is planning on bidding on some of the spectrum licenses. Even if it doesn't win any of these licenses, the new Android software could put Google in a prime position to be one of the main suppliers of software to handset makers that could help them comply with the FCC requirement.

(Credit: Open Handset Alliance)

Like a number of my colleagues here at CNET, I had my ear pressed to the phone yesterday morning as the members of the Open Handset Alliance (OHA), including Google, Motorola, and HTC, revealed their plans for Android, a new open platform for mobile devices. I'm not here to recap all the details of the event here--CNET News.com has a comprehensive story on that--but rather just to jot down some of my thoughts.

Looking at the big picture, I welcome today's news. I think it's a really interesting move for all the parties involved, and I certainly feel that the Android project will lead to more innovative products--both handsets and applications. More importantly, it gives the consumer more power and choice when it comes to buying cell phones and smartphones. But it also raised a lot of questions. One of the first ones that popped into my head is how will Android affect the other mobile operating systems--Windows Mobile, Palm, Symbian, BlackBerry, and Apple. Will they suffer? Compete head-to-head? Or will they join the Open Handset Alliance?

During the press conference, one reporter asked how Android differs from all the other operating systems and I can't recall who responded but the answer was that Android is an open platform and open to third-party developers. Well, OK, but so does Symbian. Symbian really prides itself on this fact, but it hasn't enjoyed widespread adoption here in the United States. Part of the problem is that there are only a limited number of Symbian smartphones available on this side of the pond. Nokia and Sony Ericsson use Symbian, but for whatever reason, U.S. carriers have been reluctant to pick up any of these models. Sure, you can still get them but you often have to pay a steep $400 to $700 for an unlocked version. I don't know about you, but I don't have nor do I want to drop that much money for a cell phone. With this limited visibility and adoption rate in the States, I think Symbian will take the biggest hit. Sadly, I think the Google association alone gives Android more name recognition than Symbian.

And the others? Well, Palm just seems like a sinking ship, though I know it still enjoys a loyal following. Palm/Access needs to breathe some new life into the OS in order for it to keep afloat. I also noticed that the OHA kept focusing on the potential Web browsing capabilities of Android, which is great, but also leaves me to wonder how it will handle corporate e-mail, personal information management, and productivity apps--something Windows Mobile and BlackBerry devices do very well. And CNET News.com's Tom Krazit has an interesting take on how Android will (or won't) affect the Apple iPhone.

Without knowing what Android will entail, it's hard to tell how it will shake things up, but like I said before, I welcome it. I think it can only benefit the consumers. The next few months should be interesting, and I can't wait!

Will Google's Android and the Open Handset Alliance result in the perfect phone?

(Credit: Open Handset Alliance)

One of the promises made with Google's new Android platform and the Open Handset Alliance is that we as consumers will finally be free from the tyranny of cell phone carriers. Thanks to Sprint and T-Mobile's agreement with the OHA philosophy of open and free cell phone usage, maybe we can finally truly find the perfect phone that'll match all our needs and be affordable at the same time.

But what does a perfect phone mean for me? Of course, right off the bat, I'm hoping for a compact device with generous screen real estate, a functional keypad or QWERTY keyboard, plus a 3-megapixel camera, but an open platform would not necessarily dictate the design of the hardware. So I'll focus mostly on software and desired features.

1) First and foremost, I want an easy to use OS. Sorry, Symbian and Windows Mobile--though both these mobile OSes have plenty of power, they're not the easiest for the smartphone newbie to understand. Palm is a fine OS, but it's getting to be rather dated and sadly underpowered. Ideally, the Android platform will be as easy to use as OS X on the iPhone, but with a lot more flexibility.

2) Google has already come to my aid with the second feature I want--the ability to install and use a wide range of applications. I would be happy with the Google apps alone--I use GMail and Google Calendar religiously, and Google Docs would be great to have--but if Google truly believes in the open-source movement, they would open the doors for their competitors to enter the gate as well. This means I want to see apps from Yahoo and Microsoft on here along with all the other third-party ones.

3) Following up on number 2, these are the applications I want on the phone: A fast and well-built browser that supports Flash as well as Java, a multiple IM client, an e-mail client that supports POP and IMAP, compatibility with Microsoft's Exchange server for work e-mail, and perhaps this is a pipe dream, but I want a VoIP client. Ideally, I'd like a mobile Skype app, as well as compatibility with something like T-Mobile's HotSpot @ Home, where I get to make free calls via WiFi.

4) It needs to be fast. That means I want 3G, and I want Wi-Fi as well (OK, so this is encroaching on hardware territory a bit). Thankfully, Qualcomm has mentioned that 3G will be a big part of Android, so this isn't too far from reality. That said, 3G and Wi-Fi together in one package would be ideal.

5) Open up Bluetooth as much as possible. That means I want stereo Bluetooth as well as the ability to tether my PC to the phone via Bluetooth and use it as a modem. This combined with the phone's 3G abilities would obviate the need for a separate EV-DO or HSDPA PC card.

That's a pretty hefty wishlist for sure, and I haven't even gone into the details yet. Perhaps there's a phone like this already and I'm not aware of it, but it would be nice to have Google's Android as well as the OHA produce something like this. I can guarantee you that if a well-designed phone comes out with all the above features and more, I might be willing to fork over my hard-earned cash for one.

How about you, dear readers? What is your ideal phone? And do you think the Android platform plus the OHA will come up with it? Let us know your thoughts in the comments section below.

P.S. OK, also, it'd be sweet if I could access my home computer while I'm on the road. All right, I'm done now.

Traditionally, cell phone carriers in the United States have liked to control not only what goes into their phones but also how those phones are used. So when we learned today that T-Mobile and Sprint have signed onto the Open Handset Alliance (OHA), the group that will develop applications for Google's new Android mobile phone platform, immediately I was intrigued. Could a U.S. carrier really be joining a group that will encourage free and open use of a mobile phone? Yes Virgina, it is true. And Sprint can't wait to get started.

Though neither carrier would reveal specifics on when we'll see Android-powered phones, or even if they exist yet, Sprint spokesman Scott Sloat said that Sprint is committed to promoting the free and open environment that Android will bring. "We're in favor of customers dictating what they want [on their phone]," he said. "This will open up the platform to developers."

Pardon me, but I'm still a bit in shock that I'd heard those words from a carrier. To his credit, Sloat acknowledged that the broad support for the OHA from both carriers and manufacturers does mark a big shift in how the U.S. wireless industry has progressed up until now. But he said it's also a natural next step for a company such as Sprint to take. He expects Android to be a natural fit for the company's existing 3G network and its coming WiMax network. "We want to give customers a true Internet experience on their phones," he said. "The end game is all about increasing wireless-data usage."

So if a better mobile Internet (and more wireless data minutes) is the whole point, T-Mobile's participation is interesting. T-Mobile is the only major U.S. carrier to lack a 3G network and the carrier remains mum on when we'll see one. In a Google-sponsored conference call this morning, Qualcomm CEO Paul Jacobs emphasized that 3G applications will be huge part of Android. Google Chairman and CEO Eric Scmidt added that Android will run well on all existing cellular data networks, but it's not surprising that 3G will be the sweet spot.

So will we see T-Mobile formally roll out a 3G network before the middle of the next year, when the first Android devices are supposed to appear? Unfortunately, when I called a T-Mobile spokesman this morning, he still wouldn't say. Nor would he elaborate on how T-Mobile USA will use the Android platform. Apparently, that's being left up the German parent company for now.

I don't know why AT&T and Verizon Wireless haven't signed on to the OHA. I expect that AT&T has its hands full with the iPhone and that all that customer freedom may be a bit much Verizon, which has always been one of the most control freak carriers. But in any case, look for my News.com colleague Maggie Reardon to answer that question.

Of course the biggest question in all of this is whether T-Mobile and Sprint really will honor the open source spirit of the platform? Will they really let consumers use their cell phones as they please? As was said during this morning's conference call, carriers offering an Android-powered phone will be able to alter and restrict the phone as they wish. So, while Schmidt such a scenario is "highly unlikely," it would be possible for a carrier to offer a completely locked Android handset. But Sprint's Sloat doesn't think that will happen either. "It would go against the grain of [Android] to turn around and limit its use." Nicely put, Scott. Let's just hope it stays that way.

The Wall Street Journal reports that Google will make a big announcement on Monday that will detail the company's partnerships with various handset makers and carriers for its much-ballyhooed "open" mobile OS. Apparently U.S. carriers T-Mobile and Sprint are slated to be in on it, while Taiwan's HTC is a safe bet for a handset manufacturer.

Other manufacturers are also possible (Samsung, LG , and Sony Ericsson, to name a few), but we won't know until Monday. As we've previously theorized, these Google-powered phones could have a Linux-based OS, along with a few Google-branded software applications. News.com has attempted to confirm this report, and both Google and T-Mobile have replied "no comment" to the speculation.

Google is pitching its vaunted Gphone to Verizon Wireless, but the odds are still against the search giant striking a major deal with the second largest phone company in the U.S.

The Wall Street Journal and Reuters reported Tuesday evening that Google is in "serious discussions" with Verizon Wireless to put its mobile "GPhone" software on Verizon phones.

For months, people have been speculating about the rumored Google "GPhone." Most people believe that it's not a specific phone, but is more likely an operating system or software that integrates many of Google's mobile services, like Web search, Gmail, Youtube, and Google Maps, onto phones made by existing handset makers. But more than simply integrating Google services onto handsets, the new Google mobile OS is believed to be an open platform on which application developers would have free reign to develop a slew of new applications and services.

The WSJ said in an earlier article published Monday that Asian cell phone makers HTC and LG Electronics will be the first two handset makers to use the software.

But Google-powered phones will be useless unless the company can strike deals with mobile operators to allow them on their networks. T-Mobile USA is rumored to be the first U.S. operator that will sign on with Google. And now the WSJ has said that Verizon Wireless is also in "serious discussions" with Google over using phones that have its new software embedded.

Verizon Communications Chief Operating Officer Denny Strigl admitted on Monday during an investor call that the phone company has been in talks with a lot of companies, including Google. But he didn't elaborate. His comment was in response to a question about the upcoming 700Mhz auction.

Verizon and Google have been publicly squabbling for months over the "open" provisions the Federal Communications Commission adopted as part of the upcoming 700 MHz spectrum. The provisions require winners of the spectrum auction to allow any device to connect to networks using that spectrum. Verizon had filed a lawsuit against the FCC. But last week, it dropped its complaint and said it would no longer appeal the provision.

Despite this change of heart, Verizon Wireless' history indicates that it's still very unlikely the company would agree to offer phones with tons of Google-branded services on an open platform. The reason is very simple. Of all the mobile operators in the U.S., Verizon is the most aggressive in protecting its "walled garden." It has some of the most stringent testing of new phones, and it is very selective about the applications it allows onto its "deck."

What's more, Verizon is also very cautious about allowing other companies to brand services on its network. For example, Verizon Wireless uses a search application from a smaller company on its VCast mobile service, which it brands itself, instead of using a search tool from a bigger company such as Google or Yahoo. And instead of leveraging existing music libraries as its competitor AT&T has done, Verizon has built its own music and video library.

So what could Google and Verizon be talking about? The most likely scenario is that Google is offering Verizon the ability to use its operating system to integrate any applications it wants into its phones. Most of Verizon's phones today are built on either Qualcomm's BREW environment or on a Windows Mobile platform. Google may be offering Verizon a free or very cheap licensing deal to use its software on phones. Verizon could still lock-down the phones if it chooses. This means that the Google-powered phones on a Verizon network might not be "open" at all to consumers or developers.

The new Google software will also supposedly offer integration with advertising platforms. And this is something that Verizon or any mobile operator would likely find very interesting. Today, mobile advertising makes up a small fraction of revenue, but carriers expect to generate a significant amount of revenue from mobile advertising in the future.

At the end of the day, Google's biggest market for the supposed Gphone software may not be with any of the U.S. carriers. Instead, Google will likely find a great upside in aiming its open platform at the developing world where people are much more likely to access the Internet on a cell phone than they are on a PC.

"A Google-software enabled phone makes the most sense in emerging markets," said Charles Golvin, an analyst with Forrester Research. "The next 1 billion to 2 billion cell phone users are going to be people in these markets. And most of them will not own a PC. For Google to grow its Internet audience there, it makes much more sense for them to optimize the Web experience on a phone."

Over at Micropersuasion, Steve Rubel is making a bold prediction: The portals will be big winners in the social-networking wars.

"Social networking is certainly rising and there seems to be no end in sight to the phenomenon. However, what I do know is that people will jump around from one Myfaceborkutspace to another and not all of them will win," Rubel wrote.

He is referring to Long Tail author Chris Anderson, who points out that all good web sites should have elements of social networking and therefore suggests that social networking is a "feature, not a destination." Rubel believes that the portals' key advantage is that they "own the glue that keeps many of usconnected to our structured social networks (e.g. Myfaceborkutspace) and the looser ones--e.g. a personal network of contacts. And that glue is a trusted communication system that works with every person and social net."

That's true. You could also say that our buddy list is our social network, and we appreciate just plugging it into the most convenient and trusted network of our choice. Call it the "floating network." I therefore also agree with Rubel when he says, "No matter which social network(s) you participate in, even if you float, you're going to turn to your trusted communication system to manage it all. This will include any or all of the following: a) Web-based e-mail, b) instant messaging (which is nowadays integrated), c) RSS and d) telephony tools like Grand Central."

There are good reasons why there is a lot at stake for the traditional portals, and there are good reasons (Rubel names them) to predict they will not just sit back and watch the young social-networking sites own the game, especially now that business has begun facing up to social networks. And yet, I am hesitant to follow Rubel's prediction that the portals will have the upper hand in this conflict. In fact, I think he gets the conflict wrong.

I don't think this is as strict an antagonism as Rubel describes it, and I would even question the "war parties" as he identifies them: On the one side, the emerging social networks that are relentlessly trying to enhance the one main feature they're built upon ("making connections") into a platform. On the other side, the big portals, the AOLs, MSNs, Yahoos, that are seeking to operate more like social networks. This is an over-simplified showdown, for Rubel stages a competition where, in fact, we witness a co-evolution. The portals will adapt the best social-networking features, for example by activating the "dormant social networks" they own (see Yahoo Mash), and the social networks will adapt some of the portals' features; just yesterday AllFacebook and Paid Content speculated that Facebook is preparing to launch a music platform, either as a potential iTunes killer (according to AllFacebook) or a MySpace competitor (according to Paid Content).

However--and herein lies the major difference to Rubel's assumption--both social networks and portals are striving to eventually become something entirely different: the new operating system. Facebook is not shy about its intentions, and you could argue that it has already transformed the site into something much bigger than a social network.

It is a not a social-networking war; it is a race to become the de facto operating system for the social networker. And that is, of course, why Google, which is neither a social network nor a portal, is in the game too. The company is said to be feverishly working on "out-facebooking" Facebook by introducing a meta-platform that integrates not only a suite of Google services (like iGoogle, Gmail, Google Talk, Orkut, etc.) but is also 100 percent open to third-party developers--and other social networks. Google's recent acquisition of mobile social-network Zingku indicates that this uber-platform may have a strong mobile component and the long-rumored free, ad-based phone service. In other words, while social networks and portals are fighting the "social networking wars," Google may be winning the actual competition at hand: to become the dominant operating system for all of our communications. You can also call it the World Wide Web.

No way, Gphone

(Credit: Google)

There's nothing quite like rumors. Whether it's the pudgy Nano or the Google Phone, there is always something worth speculating about. But before we start telling the world about the rumored Google Phone (or Gphone as it has come to be known), it's time we consider the environmental factors that will cause this device to be a failure -- if it's real, that is.

If Google decides to break out of its shell and release a new cell phone that some are calling the "iPhone Killer," it will be a huge mistake.

As I've mentioned before, the only way for Google to make any headway in the cell phone business is through the help of the 700MHz spectrum. With this tactic in mind, Google could create its own phone that works like Skype on the spectrum and in the process, kill off the entire cell phone industry. But for Google to throw a device into the cell phone business on domestic and international carriers would not only be a mistake, it could be an indication that Google is getting in over its head.