As Google and Verizon are locked in a tiff over the way 700 MHz radio spectrum is licensed by the Federal Communications Commission, it looks less and less likely that we're going to see the forthcoming Google Phone at wireless retail stores when it finally hits the market. Google contends that the licensee of the radio spectrum should be forced to sell "unlocked" devices, therefore permitting open applications on their network, a move which would certainly benefit Google and other powers whose bread and butter is mainly software.

Verizon, on the other hand, argues that they don't need to make unlocked phones available, since it's possible to get unlocked phones from other sources. Google's response? Big carrier retail sells 95% of the phones in North America, so arguably less than 5% of available phones are unlocked and open. Google, of course, isn't accustomed to having access to just 5% of the market these days. Nevertheless, the spectrum license reads as follows (quoted from Google's public policy blog):

"[Licensee] shall not deny, limit, or restrict the ability of their customers to use the devices and applications of their choice."

It's a clash of business models. Verizon makes money by selling applications they control. Google makes money by giving applications away and monetizing the mindshare they gain by doing so. Wireless is a wild frontier for somebody like Google, because the power brokers in the cellular industry don't want to compete with new players from other spaces, like a search engine company.

Bottom line, it doesn't look like the Google Phone is going to be on Verizon's store shelves, and something tells me Google isn't about to start a retail chain of its own.