Google et al. Want 700 MHz Auction Opened Up

The 700 MHz spectrum could give birth to the much-anticipated third pipe, but phone and cable lobbyists are currently pressuring the FCC to sell companies like AT&T and Verizon our airwaves — in a flawed auction process — so they can hoard this valuable spectrum and stifle competitive alternatives to their networks. Google and other would-be providers are not taking it lying down. They want the FCC to mandate that whoever wins the auction be required to sell access to those airwaves, at wholesale prices, to anyone wanting to provide broadband Internet service. They also want anonymous auctions to prevent the giant incumbents from manipulating the results against small players (as they have done in the past).

Comments

Re:Surely.....

[scooter.higher]

But they know that if they can get the "telephone and cable incumbents that dominate the wireline market" bumped out of, or at least have them given a reduced presence in, the auction they have a better chance of winning the auction with less up front out of pocket.

Does that mean free, high speed, wireless internet access paid for by Google Ads? Probably not. But it might. There were several companies doing the same with dial-up a few years back.

Generalized Economic Rent Tax

[Baldrson]

The way spectrum is currently utilized, it is like land. Although it doesn't have to be this way, reality dictates that until proper technologies for spectrum utilization are put into place, that spectrum be treated like land:

The users should rent it from the government that is enforcing their property rights over this natural resource.

This is a principle called "economic rent".

Milton Friedman has declared such taxation the "least distorting" kind of tax.

The way to set the rental agreement is to determine the liquidation value of the "land", and then charge a rent on it equal to the interest rate on short term US treasury instruments.

As with any rental agreement there would be other terms but the basic idea is that such resources enjoy liquidation value changes that are primarily a result of the economic environment -- meaning economic externalities drive the liquidation value -- and allocation of externalities is a social function.

Make the FCC try something new...

[Doppler00]

Why not just leave the spectrum completely open to the public like 900MHz and 2.4GHz? Although, require that the spectrum must use intelligent radio devices that comply to a single standard (through IEEE for example).

Re:Hmm...

[buswolley]

Karma, Randy, Karma.

Everyone could win.

[twitter]

No matter who wins this fight, we all lose.

No, it's possible to lower the cost of wireless by fixing the bidding process. If ATT and friends know there will be real competition, they will be less able to run the prices up. It won't be impossible but it will be harder.

A real sharing of spectrum is possible but politically unlikely. Really, we should claim the air for ourselves and no further regulation is required other than policing intentional disruption.

Save Our Spectrum (?)

[mgoren]

Is this related to the Save Our Spectrum coalition? I believe that group is asking for the following:

• establish a service rule for broadband services operating in the 700 MHz band that protects the consumer's right to use any equipment, content, application or service on a non-discriminatory basis without interference from the network provider.
  
• allow third-party access to spectrum owned by other companies. This "open access" plan to include wholesale access to networks would enable more competitors to offer services
  
• institute anonymous bidding in auctions to lessen the possibility of bid signalling and bid rigging that studies found to have taken place in prior auctions.
  

Also, what about open spectrum? Does it work well in practice? Would that be a better solution? (though I know it's a moot point for the upcoming auction.)

Re:Straight face.

[dwater]

Don't you guys have MANs? They're pretty popular here in Beijing, and provide pretty good performance too, certainly good value (99rmb/month). The ones I've used have been 10BaseT ethernet connections.

Politically unlikely being the critical point

[Travoltus]

It's politically unlikely because of all the corruption and bribery going on by big business.

Pity, that the truth is modded down as a troll, or flamebait, redundant, whatever. It's still the truth.

You can keep your money.

[twitter]

The FCC has intentionally let the market collapse to a false competition between a local cable company and a local phone company. Very few phone companies have come through with their promisses so Cable is really the only option most people may have. Cable everywhere has blocked ports and intentionally low upload speeds. The US 16th in the network world and falling fast.

Monopoly Rents.

[twitter]

The users should rent it from the government that is enforcing their property rights over this natural resource.

Others have argued there is no scarcity of the resource you are talking about, so no regulation is required. Taxing unlimited resources is socially harmful. In this case, the only purpose of the tax is to "protect" incumbents and their revenue stream. The cost to the rest of us for that revenue stream is the majority of your monthly telco bill, and a proportion of all the goods and services you purchase. The cost of that protection is monopolies which maximize your cost and minimize your service. This is why the US is falling behind the rest of the world in network service.

Re:Spectrum Anarchy - kill the FCC

[briancnorton]

a tragedy of the commons were everybody would pollute it so much that it would become unusable.
However in practice that has turned out to be a complete and absolute lie

Is it? I have no metrics to back up what I'm saying, I haven't done any research on the topic, but I live in a gadget soaked suburb, and anything in the 900mhz or 2.4 ghz band is completely unusable, and 5.8 used to be fine, but is worsening. I already had to wire my house to get around the massive interference from my neighbors and all their spurious emissions. My radio even picks up the digital clicks from their cell-phones. I don't know what the answer is, but a bunch of conflicting stuff is a bad answer.

Re:Surely.....

[mabhatter654]

sure, if they get invited to the first round.

Lately the FCC is pretty good (with the prez approval) about keeping big deals that benefit mega corps quite (posted in a lavatory in the basement of city hall for us plebs.. but the dept head goes out of his way to meet the big players for lunch about the deal) The FCC is VERY anti-little-guy right now, and even guys like Google are still "new money".. another term for little guys that can momentarily out spend you for a new toy. The effort is making sure the deals are even made in public up front in time for companies that want in to make a strategy.

I like the idea of several national channels as well... That would really help somebody like Google to roll out cool services.

Re:Spectrum Anarchy - kill the FCC

[CaptainDefragged]

The whole premise behind the FCC was that if spectrum was unregulated you would have a tragedy of the commons were everybody would pollute it so much that it would become unusable. However in practice that has turned out to be a complete and absolute lie.

I'm afraid that this statement is provably false. Here is but one example. Whilst I am not across how things are in the US, here in Australia, 27mHz CBRS (Citizens Band Radio Service) is unregulated, as is UHF CBRS. When it was regulated in the 80s, you could actually use CBRS to communicate. We even had inspectors that would "look after" people with linear amplifiers and other trouble makers. Since the regulation was abolished, CBRS is virtually unusable, with numerous antisocial persons blocking the channels with music, abuse and whatnot. It took a couple of years, but as people gave up on 27mHz and went to UHF, the deadheads followed. Now both segments of CBRS are useless. Quite a few of the people I used to know migrated to Amateur (HAM) radio and the others just gave it away altogether. HAM and 27mHz marine are still regulated and are more than usable.

Re:Straight face.

[xSauronx]

Im also in Kansas and have DSL, as my understanding was the cable in this town is lousy. The DSL, through SBC/AT&T has been reliable, though getting it in the first place was a serious hassle.

I have the option of wireless internet, as I work for a WISP who just put up an ap about 6 blocks from my place. They offered me service but....meh, that stuff has lousy bandwidth in the 900mhz range ;)