Google Inc. is leaning toward bidding in upcoming U.S. mobile phone airwave auctions, despite a partial setback last month from Washington regulators, Chief Executive Eric Schmidt said on Tuesday.

Schmidt told a conference of regulatory and industry leaders in Aspen that his company would probably move ahead with plans to bid for wireless spectrum freed up once broadcast television networks switch to digital from analog in 2009.

Asked by T-Mobile USA's government relations chief Thomas Sugrue whether Google planned to take part in the auctions for wireless broadband networks, Schmidt replied that bidding probably would be the way to answer that.

Earlier this year, Google surprised the telecoms industry by announcing it planned to take part in auctions for valuable wireless spectrum, bidding against established mobile phone players such as AT&T Inc, Verizon Communications and T-Mobile USA, a unit of Deutsche Telekom.

Google had vowed to spend at least $4.6 billion on wireless spectrum if the Federal Communications Commission (FCC) would agree to certain conditions.

But late last month, the FCC stopped short of setting ground rules sought by Google that would require winning bidders in auctions for 700 megahertz radio spectrum to resell access to rivals at wholesale rates.

The FCC gave Google part of what it and other Internet industry companies had been seeking by mandating that winning bidders allow any mobile device, software or Web service to run on the new networks, not just carrier-specified services.

Schmidt made his remark about participating in the mobile auctions following a keynote speech at a conference sponsored by the conservative Progress and Freedom Foundation think tank.

In his comments, he reiterated that the decade-old hands-off government policy toward the Internet -- such as no sales tax -- had allowed the Internet to grow exponentially.

This means no government scrutiny of what is said on the Web, universal broadband access to speed up the Internet and net neutrality, essentially an assurance that no government or single company will control what goes on the Internet.

If you have three or four choices, this is not going to be a problem, he said of the need to ensure multiple competitors are at play in communications markets.

(Additional reporting by Eric Auchard in Menlo Park, Calif.)

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