Google, according to Friday’s Wall Street Journal, is getting its ducks in a row to bid on wireless licenses that the FCC will begin auctioning in January. If Google (GOOG) is successful in winning spectrum, it would catapult the search giant into the capital-intensive business of operating a phone network.

We’ve questioned the wisdom of this strategy before, but Google executives continue to intimate an interest in bidding on spectrum in the upcoming FCC bake off, in which a swath of 700 megahertz spectrum known as the C block, becomes available. In August Google CEO Eric Schmidt, told a group of regulators and analysts the company “probably” would bid on the C block. And, as the WSJ notes, Schmidt last month told reporters he was considering joining up with partners to bid on the spectrum.

Does Google really want to get into the distribution business? Blair Levin, who has lived through his fair share of auctions as chief of staff at the FCC under former chairman Reed Hundt, says he thinks Google will prepare the necessary paperwork to participate in the auction, and it will line up the financing. But Levin, who is now a telecom analyst at Stifel Nicolaus, thinks Google wins even if it doesn’t grab any licenses.

“Google wins if there are more and faster networks,” Levin says, noting that content companies in general like more distribution outlets and network operators are happiest if there’s lots of content to ride on their networks. Google may be perfectly happy to have someone else win that license, with the caveat that the spectrum winner operate that network in an open, “Internet-like” way – a requirement that Google helped institute.

So here’s one scenario: What if Google antes up (it has signaled it is willing to spend $4.6 billion on the licenses) but stops short of the winning bid, and allows Verizon, say, to win the spectrum for $4.61 billion.? If Verizon has to build and operate that licence to so-called open specifications, Google doesn’t have it so bad. It gets another, faster network for its applications.

Then it could take its $4.6 billion and do any number of things: Team up with Sprint or Clearwire to build out WiMax services – thus adding another fast network to its potential menu of distributors – or pour that money back into its core search business. Or, if the stock stays below $650 a share, perhaps it could institute a share buyback program.