The conventional view is that Google’s (NSDQ: GOOG) participation in the upcoming 700 MHz auction isn’t actually about acquiring spectrum, but about advancing its vision of open wireless networks. With the FCC’s rules regarding this and Verizon’s (NYSE: VZ) adoption of the open access mantra, the company has already been given credit for having moved this far forward. So does this mean there’s no chance the company will actually play to win in the upcoming auction? Sanford Bernstein analyst Jeff Lindsay thinks it’s still a possibility and that it might even be justified:

-- Lindsay reckons that to win a slice of spectrum, Google will need to pony up about $10 billion and then commit $5 billion each year for the next five years to build out its network. These kind of capex numbers would almost certainly cause Google investors to reach for the Pepto-Bismol, and as he acknowledges, the stock would take a hit on this news. Furthermore, any direct voice/data business that the company got into would offer much lower profit margins than the company’s core business. But it could still be worth it, if the company can take business from the traditional wireless operators and even some share from broadband operators with a fixed wireless solution. Based on projections for the size of the wireless market and what Google could have of it, the analysis suggests that the wireless business could help Google double its 2014 revenue. Furthermore, owning spectrum outright would allow Google to really force the issue on open networks. The alternative, as Lindsay puts it: “We think the eventual winner of the upper C-block will not have a strong incentive to “play nice” and will likely implement the letter rather than the spirit of the open access requirements.” That sounds like a safe guess.

-- Ultimately, Lindsay’s view is that Google is still probably bidding to lose. The company obviously wouldn’t have such a robust role in the wireless market, but considering its other efforts to push the industry, it’s still going to be playing in some way. And this option is far less risky, both from a strategic and financial question.

-- And these risks are pretty significant. The market’s view of the company would probably change considerably if management had to start addressing the issues that wireless and cable operators have to deal with or if the company’s earnings weren’t discussed as cash earnings, but in terms of OCF or EBITDA. And although the report doesn’t really address this, such an initiative would require a lot of demands on management in an area that’s not their expertise, potentially distracting them from the core business. Even if you can do the math on a spreadsheet to justify an entry into wireless, actually buying and utilizing spectrum looks dicey.