Google's (GOOG) Back Door Wireless Grab

Google (GOOG) has cut a deal with Sprint (S) to provide search and its GMail and calendar functions for handsets that will operate on Sprint’s new WiMax network. The deal could expand to include customers on Clearwire’s (CLWR) WiMax system as well.

As The Wall Street Journal points out: "Google’s collaboration with Sprint comes as Google is battling in Washington to impose new rules for a coming auction of valuable radio spectrum." The search company may not have its way in terms of opening up the spectrum to more competition. AT&T (T) and Verizon Wireless are doing what they can to block Google. They cannot afford to have an open systems where their handsets can be used on other networks and consumers can download wireless applications at will without paying their primary carrier a toll.

So, Google will go in the back way. If Sprint’s WiMax network is successful, it could create the single biggest threat to the 3G plans of its larger competitors. And Google can make certain that the Sprint product can be feature rich.

In addition to the Google software, Sprint will open its system to allow consumers to download any handset-ready software, including VoIP applications.

As the FT writes: “Google’s partnership with Sprint signifies one of the many avenues that the company is taking to enter the wireless space, with other paths bypassing mobile network operators entirely,” said Nick Holland, a senior analyst with Aite Group.

Google intends to win its fight for open wireless networks whether the FCC cooperates or not.

Douglas A. McIntyre