How Google yanked AT&T's chain

Negotiations to reform Clearwire, Craig McCaw's wireless-broadband startup, as a consortium backed by Google, Sprint, Comcast and others began as far back as January of this year. By mid-March the consortium had an outline of a deal that made Google the preferred software developer on the WiMax network. Today the consortium, operating under the Clearwire name, is expected to disclose that they are investing $3.2 billion in a nationwide WiMax network, which will eventually be able to deliver a 5-Mbps connection to cellphones and laptops. But what else was Google doing back in January?

Bidding up the cost that AT&T and Verizon eventually paid for their own wireless spectrum in the FCC's 700-Mhz auction. Far from simply trying to implement "open access" via their bid, it appears now that Google was trying to increase the cost of networks that might compete with Clearwire's WiMax one. Which would now explain why AT&T spent $200,000 to get three Congressmen to profess their hatred for Google.

There is precedent for yanking AT&T's chain in such a grand manner. When AT&T first bid on wireless spectrum back in the '90s, after its acquisition of McCaw Cellular Communications, it found that during the auction all their key markets had been bid up by a mysterious third party. Though they finally won the licenses they so coveted, they paid far more than anyone had expected. Who was the mysterious bidder that cost them so much money? The same person that is expected to be named chairman of the Clearwire consortium: Craig McCaw.

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(WagCurious, a Valleywag commenter, submitted this item.)

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