U.S. gets Google, we get Ottawa

So the worst-kept secret in the mobile-phone industry is finally out: Google has confirmed that it plans to bid for new spectrum in the 700-Mhz auction that is to be held early next year. One of the requirements of the spectrum auction is that whoever wins must allow users to download whatever applications they want to their mobile devices, which would fit with Google’s Open Handset vision. Google CEO Eric Schmidt said:

“Consumers deserve more competition and innovation than they have in today’s wireless world. No matter which bidder ultimately prevails, the real winners of this auction are American consumers who likely will see more choices than ever before in how they access the Internet.”

Meanwhile, Canada is planning a spectrum auction of its own, and also hoping to increase the amount of competition in the mobile sector — which is currently held hostage by an oligopoly consisting of Bell, Telus and Rogers. Canada being what it is, of course, we don’t have a Google bidding for spectrum and promising competition, we have the government setting aside spectrum and blocking Bell, Telus and Rogers from bidding on it.

The hoped-for upshot of both moves is more competition, and as a result more features and lower prices (Om Malik doesn’t think Google is in it to win it). Will that be the actual outcome, or will it just mean higher handset prices and more attempts to lock customers into long-term contracts? Stay tuned.

Is Google’s spectrum play hubris?

There have been rumours about Google getting involved in the wireless wars in the U.S. for some time now, and the company itself has admitted many times that it is interested in expanding the number of people who use the mobile Web and in increasing the amount of competition there is in the mobile business. So it’s not hard to believe the report today in the Wall Street Journal that says the company is going to bid for wireless spectrum. But does it make any sense for Google to do that?

hubrisposter_web.jpgI’m not sure that it does — and not just because it will cost a boatload of cash to do so. Henry “I used to be a famous Wall Street analyst” Blodget does the math at Silicon Alley Insider and comes up with a figure of $8-billion or so. Of course, that’s only a couple of years worth of cash flow, right? Google should be able to make that up in a few months of selling click-to-call ads on your mobile phone, or whatever the heck it is planning to do. But still — why does Google have to do this at all? Is the U.S. mobile market so broken that only Google can fix it? I hate to make reference to myself (okay, who’s kidding who — I love it) but I wrote a post recently in which I wondered whether people weren’t putting too much faith in Google’s ability to fix just about any company or industry with its magic Google dust. In that case, it was talk about Google buying Sprint that started me thinking.

So here’s a thought: what if Google is starting to believe its own publicity? What if it thinks it can fix anything too? As they say out West, you shouldn’t drink your own bathwater. The mobile business has humbled many companies before Google. Maybe they didn’t have PhDs in applied math coming out the wazoo, but still. I’m not sure Google really needs to wade into this one, or that it will gain much from doing so. Fortune thinks the bid may be a bluff.