It’s taken a little while, but Microsoft has finally thrown its oar in to the 700MHz spectrum auction furore, but for anybody expecting a sweeping “we could do that best” arrogance oft attributed to the Seattle software giant you may be surprised.  At CTIA this week, Steve Ballmer - who could never be accused of being less than enthusiastic about Microsoft’s capabilities - set the record straight about the company’s plans to sit back and observe the auction rather than wade in with an open wallet.

“No, we don’t have plans to participate in the spectrum auction.  We may be broader in what we do than any company, but we have a core competency. And we think the telecom industry has a core competency. It takes a real expertise to set up networks, to invest in capital expenditures, to provide customer service 24/7—that is a core competency. What would it buy us to own a piece of the spectrum? It would probably alienate us”Steve Ballmer, Microsoft CEO

Instead, all eyes are still on Google and the ongoing battle between, roughly, those in favour of network openness and those against.  Don Dodge, of Microsoft’s Emerging Business Team, believes the time is right for a wholehearted upheaval of the cellular industry, highlighting the effect that carrier stranglehold has had on holding back the US’ development in the global cellphone league.

“If you look at the rate of innovation on the Internet compared to the rate of innovation on the cell phone network you can see why this is important. US government regulation and monopoly ownership of the wireless spectrum is the single biggest reason why the US lags behind the rest of the world in cell phone technology and usage. Maybe the rules do need to change” Don Dodge

That Microsoft is holding back - and perhaps, from Ballmer’s comments, even casting a little skepticism on Google’s ability to manage the prized spectrum - may disappoint some who see the company as the better of two evils compared to industry stalwarts like AT&T and Verizon.  Say what you will about Microsoft, but their desire to get everybody holding a Windows Mobile OS-powered handset would see them quickly looking to leverage any new network capability.  And their focus as a software company might have, for once worked in the public’s favour; it’s not hard to imagine them being more open than the traditional carriers, bringing some of the PC industry’s flexibility to bear.

So, hopes rest again on Google’s shoulders, but Mountain View is remaining steadfastly tight-lipped on developments in their auction strategy.  For all the analysis and the commonality of Google as a brand, their plans are almost entirely unknown and any real “facts” often have their roots in sparse, extrapolated comments made in passing.  As the year progresses and the auction comes closer, expect a number of announcements as companies maneuver their pieces into play.