Verizon reveals plans for airwaves

A day after rules prohibiting participants in the federal government's online auction from discussing their strategies lifted, Verizon Wireless said it would use the new capacity to roll out faster wireless Internet service by 2010.

Verizon outbid Google Inc., paying $4.74 billion for one of the auction's biggest prizes, a coveted nationwide block of airwaves.

For Google, a company that's obsessed with auctions, the spectrum sale turned into a high-stakes exercise in gamesmanship.

The Internet company failed to land any of the nearly 1,100 spectrum licenses auctioned off. Still, its bidding -- conducted from a small "war room" on its Mountain View, Calif., campus -- helped push the swath bought by Verizon above the $4.6-billion minimum price set by the Federal Communications Commission.

Surpassing that threshold triggered new rules that forced the winning company to allow consumers to use any device or application on those airwaves.

One big beneficiary of those provisions: Google. The company lobbied hard for them to ensure that people could access Google's maps and other advertising-supported applications in the growing mobile market.

Google kept bidding until it hit that minimum price and said it had been prepared to buy the airwaves. If it had won, Google probably would have joined with another company to build the transmission towers and run the network.

But it never expected to succeed against large wireless companies such as Verizon, said Larry Adler, a product manager who helped run Google's wireless auction team of about half a dozen people.

"Given their position in spectrum, the towers they have, the customers they have, they're going to put a premium on that spectrum," he said. "We knew in a head-on bidding war, it was going to be very difficult to outbid them."

The auction of airwaves being given up by TV broadcasters in February as they convert to digital signals raised a record $19.6 billion for federal coffers.

Although the 54-day auction was completed last month, FCC rules prohibited participants from talking about their bidding strategies or plans for the spectrum to prevent collusion.