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FCC Goes Halfway On Opening 700 MHz Spectrum

The FCC has set rules for the upcoming auction of 700-MHz spectrum and they went halfway on the four open access principles that Google and others had called for. The agency said yes to "open devices" and "open applications," thus requiring the auction winner to permit consumers to use any device or application on the network. But the FCC turned down "open services" and "open networks," so the winners will not be obligated to let others buy access at wholesale prices in order to offer network services. This vote would seem to mean that Google won't bid in the spectrum auction. Ars has a more in-depth look at the outcome.

39 of 192 comments (clear)

  1. Wouldn't that be more reason to win? by Anonymous Coward · · Score: 5, Insightful

    Shouldn't google bid so that they can enforce the openness they want, rather than letting someone else win and keep it closed?

    1. Re:Wouldn't that be more reason to win? by jamieswith · · Score: 5, Insightful

      This has some merit, but I can think of one reason why the lack of these makes Google nervous of getting into a bidding war...

      Because not including these two levels of 'open-ness' means a higher potential value to whoever is the winner... because there's a greater degree of possible profit... you get to pick your competitors and set your prices

      It simply wouldnt be in the interests of the huge telecoms giants to bid too high if they then had to turn around and sell access for next to nothing to anyone (including google) who wanted to use it... but if they're getting total control over who provides service and at what cost... then its worth a lot more money.

      If they can charge what they want for access, suddenly you can justify bidding a lot higher

  2. Abolish the FCC! by Anonymous Coward · · Score: 2, Funny

    Put its power in the hands of the people! What could go wrong?

    1. Re:Abolish the FCC! by stinerman · · Score: 5, Insightful

      I wouldn't abolish the FCC, but I would considerably reduce their scope. The FCC is what keeps broadcasters on the proper frequency and the like. I'd let them regulate power, frequency, etc., but remove their ability to censor people. They'd also have no say in anything not owned by the public at large.

    2. Re:Abolish the FCC! by fyngyrz · · Score: 2, Interesting

      • Legislators are controlled by money; re-election and perks and post-service plums
      • The FCC is controlled by money; plums, primarily, and indirectly by legislators
      • The FCC sells the airwaves to the highest bidder, thus locking out the people
      • People cannot vote on the FCC's actions - it is a corporate service embedded in unelectable government
      • Therefore, you will not be abolishing the FCC
      • Therefore, your access to the airwaves will be via corporations
      • The only "free" services will be those with ads or propaganda
      • The only "free" devices will be extremely limited in power and/or application

      Democracy [US version, noun]: "Where each dollar gets an equal vote."

      --
      I've fallen off your lawn, and I can't get up.
    3. Re:Abolish the FCC! by fyngyrz · · Score: 2, Interesting
      The FCC is what keeps broadcasters on the proper frequency and the like.

      It's a circular definition. The FCC defines what is proper for a broadcaster; then requires that stations be proper. Technically speaking, what keeps a broadcast station on the proper frequency and at the proper fidelity is hardware, and fully functional hardware that can do this is extremely inexpensive these days.

      Without the FCC, broadcast stations still have motivation to stay in one place, primarily so that they are easily located, and easily retrieved from memory, both human and hardware. Without the FCC, stations still have motivation to maintain high quality signals, because listeners prefer such signals. Without the FCC, stations would no longer have a monopoly on listeners, and you and I could start our own stations. Without the FCC, putting up a very high quality local radio station capable of covering ten square miles or so would cost well under $100 and have a maintenance cost of a few cents a month. With the FCC, the same low power station costs hundreds of thousands of dollars, if you can get them to issue you a license, which you probably cannot. Without the FCC, all manner of clever services and hardware would be possible and most likely would appear. For instance, your radio could read out the weather forecast or stocks or whatever using sub 20-hz encoding. Without the FCC, you could actually broadcast your own opinions and those of your peers (and I strongly suspect this is one of the key reasons you'll never see low power stations easily licensed.)

      The FCC is absolutely and totally a tool of the corporations. Other than maintaining their monopoly, it has no reason to prevent the average citizen from having free access to a decent broadcast band, not to mention a great deal of the rest of the spectrum. But corporations are completely against this (and with good reason - I could put a far better "talk" station on the air than anything you've ever heard from a corporation in the last 25 years or so, at which point it would be easy to consume part of "their" demographic. So could a lot of other people.)

      I am perfectly willing to say that the FCC, or an agency like it, needs to regulate access to, and interference with, enough of the spectrum so that (a) emergency services are enabled and nor compromised, (b) people are not endangered by RF in the "can cook you" portions of the spectrum, (c) science, such as radio astronomy, is not compromised and (d) people's liberty and privacy are not compromised. None of this in any way provides for corporate dominance of the airwaves.

      --
      I've fallen off your lawn, and I can't get up.
    4. Re:Abolish the FCC! by Suzuran · · Score: 5, Insightful

      Without the FCC, I can also set up a large broadcasting station that transmits many signals throughout the FM broadcast band, strategically placed over the top of any existing stations, for the purpose of promoting Scientology. All it takes is one person with a few hundred dollars to talk over the top of any station they want for a few block radius. One guy with a few hundred dollars doing this trick in the HF spectrum can ruin use of a frequency for an entire continent. Don't like it if the guy down the street decides to put a hardcore gangsta rap station over the top of your low-power talk station? TOUGH.

    5. Re:Abolish the FCC! by fyngyrz · · Score: 2, Insightful
      What you've described sounds like the Amateur Radio Service, also called ham radio.

      No. Broadcasting is forbidden in the ham bands.

      If you study hard and upgrade your license to General or Amateur Extra class, you'll find you have access to valuable notches of spectrum all across the RF range. Basically every conceivable type of spectrum you might want to experiment with, you can find an amateur band to play with. For example, the 6 meter band (as in, wavelength of 6 meters -- 50 to 54 mhz) ends right where the current broadcast television channels 2, 3, and 4 begin.

      I hold an extra class ham license and have for many years. It is still illegal for me to broadcast. Or any other ham, for that matter. I am quite familiar with the rules and the technologies. In fact, some years you can find my name and call in the radio amateur handbook; I've done some innovating in ham radio, including some designs that were sold by AEA, way back when.

      So if you want to see why these bands are so valuable, get yourself a ham license and go roll your own radio! HAM equipment doesn't have to be type-certified by the FCC first.

      This is true, however, you are still forbidden to use it to broadcast. The reason the bands are valuable is because instead of making them available to the citizens, they are auctioned to those with the most money. What is your objection to a broadcast band, let's say 50 to 100 MHz in size, being made available without power, content or range restriction to the public with broadcasting being expressly allowed?

      ...you can discuss your personal views on the air with people. No profanity, no commercial speech, and no 'broadcasting' -- you must be talking to someone, not talking to everyone who can hear.

      Exactly - you are locked out of broadcasting. That's the problem, all right. If I want to share my views live with a random single local individual, this is a capability that is already available to me without the need of radio, though yes, I can also do it as a ham or as a citizen's band user. If I want to share my views live with thousands or tens of thousands of local people at once, RF broadcast is not an option. I think it should be. Other than greed, I see no reason why it should not be.

      --
      I've fallen off your lawn, and I can't get up.
    6. Re:Abolish the FCC! by Danse · · Score: 2, Interesting

      I have no problem with this at all. There are no broadcasts of any nature that are worth listening to at present; an entire dial full of stations that changed with location would at least have a chance of coming up with something. Your absolutely ridiculous Scientology example notwithstanding. I see nothing ridiculous about his example at all. I'm sure that such things would be quite routine if there was nobody to enforce rules against it. Perhaps not scientologists, but there are many fringe groups out there that would love to have a cheap way to broadcast their message at people, whether those people want to hear it or not. Just because you don't like what's on the air right now doesn't mean we should abandon the whole thing.
      --
      It's not enough to bash in heads, you've got to bash in minds. - Captain Hammer
    7. Re:Abolish the FCC! by fyngyrz · · Score: 2, Insightful
      just because YOU Live in a terrible radio market, it doesn't mean the whole country is screwed.

      No. You're entirely missing the point. The issue is that no citizen can set up a station to broadcast to their fellow citizens. The whole country is screwed. By law. More to the point, by the FCC. I don't care if you listen to RAP or country or bluegrass or Coast to Coast. These are corporations broadcasting to you, feeding you what they see fit to feed you. This is manifestly different from Joe down the street who has an idea about building a local park, or Jane, who writes children's stories, or Leroy, who thinks the local government's upcoming law on trapping stray cats is cruel, or the local libertarian, atheist, other person without much of a voice, who would like to have some open discussions without being the victim of a broadcaster who has already made up their mind and will edit them into oblivion. That is why the ability for citizens to broadcast matters. Not because you can get Sirius or XM or you live in a city, but because all of those things are moneyed interests speaking to the people, or sponsoring speaking to the people, or deciding what is entertainment and what is not. You have NO radio-based opportunity to listen to your neighbors, and they have NO radio-based opportunity to speak to you.

      Radio is unique in that it can, particularly in the guise of bands like the FM band, address the area around the station in a high fidelity, live and timely manner for citizens who are parked in their recliners, jogging, or just out walking their dog. There is no other communications medium that can do this, and you're not allowed to use it. If you'd think about this for a moment, really think about it, I'd hope it would piss you off at least a little bit.

      i'm not fan of the FCC's policies, but somebody has to keep stations from stepping on each others toes.

      No. There are numerous bands where toe-stepping would be a problem, and the FCC has neither the manpower nor the inclination to regulate those bands. The only place it is *really* a problem is where propagation allows signals from far away to regularly come in locally, I'm thinking of the citizen's band at 27 MHz in particular. Providing an unregulated band - in the sense that inside the band, one could broadcast to one's neighbors without breaking any rules - that is local by nature, say around 110 MHz for 20 MHz, is a perfectly reasonable proposal that poses danger only if citizens communicating with each other is dangerous. And if that's the case... we have other problems.

      --
      I've fallen off your lawn, and I can't get up.
  3. Google May Bid Yet by LionKimbro · · Score: 4, Informative
    This vote would seem to mean that Google won't bid in the spectrum auction.

    Only if you aren't paying attention--

    Read the top of this page in this interview:

    Google has recently said it would bid on the 700MHz spectrum only if the FCC guarantees certain open-access principles, including open access for companies wanting to buy wireless capacity wholesale. Does this mean that Google won't bid on spectrum if the rules aren't adopted?

    Sacca: To be clear, what we said was not exactly that. What we said was that there had been some concerns that somehow imposing these openness principles on the spectrum might diminish its value at auction. And we wanted to reassure the FCC that embracing a path of full openness in the interest of users and the interest of consumers would not reduce the total revenue of the auction. And we wanted to put our money where our mouth is, and we are putting our money where our principles are. So we committed to spending a minimum of $4.6 billion in the auction, if they adopted all four principles.

    So it's not out of the question that Google would participate in the auction, even if the FCC doesn't adopt all four principles?

    Sacca: We are deeply committed to changing this industry for the benefit of end users.

    1. Re:Google May Bid Yet by 140Mandak262Jamuna · · Score: 3, Insightful

      It would be a good PR for Google to bid 4.6B for it, knowing fully well it will be out bidded by AT&T and Verizon.

      --
      sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
    2. Re:Google May Bid Yet by realmolo · · Score: 4, Insightful

      The whole problem is, Google really has no chance of winning.

      They don't have the political connections or the ENORMOUS resources that AT&T/Cingular has. Never mind that AT&T/Cingular REALLY REALLY wants this spectrum. I mean, it's their wet dream to own that spectrum. It's the future of the company. They essentially will pay whatever they have to for it. But it would be amusing to see Google keep upping the bid on them.

    3. Re:Google May Bid Yet by shaitand · · Score: 2, Insightful

      'Google has recently said it would bid on the 700MHz spectrum only if the FCC guarantees certain open-access principles, including open access for companies wanting to buy wireless capacity wholesale. Does this mean that Google won't bid on spectrum if the rules aren't adopted?'

      Translated marketing babble. We have no committed to any course of action or lack of course of action and never will.

      'So it's not out of the question that Google would participate in the auction, even if the FCC doesn't adopt all four principles?'

      Translated marketing babble. We all have glowing halos atop our heads and are wonderful and good. We have not committed to any course of action or lack thereof and never will. (Actually this is what almost every PR drone statement translates to.)

    4. Re:Google May Bid Yet by kebes · · Score: 4, Insightful

      Exactly. Google is upping the bid, because they know that they will be out-bid by the entrenched telcos that can't afford to lose that spectrum. If they call Google's bluff, Google will happily buy the spectrum for a few billion and make a killing. But, since the entrenched telcos will certainly continue out-bidding until they win, it's in Google's best interests to at least put some pressure on them to make the eventual spectrum a bit more open--that way Google can capitalize on that spectrum in some way. (A nice by-product is that this is way better for consumers.)

      I'm not so naive as to think that Google is doing this for purely philanthropic reasons... however it's really nice to see a powerful company putting pressure on entrenched monopolies, with an end result that the people get high-quality, more fair access to a public resource.

    5. Re:Google May Bid Yet by mabhatter654 · · Score: 2, Insightful

      What will happen is AT&T and Version will only bid high on the major areas with population and let the rest go by the way. Look at the cell phone industry to see how that played out. Later, they buy up anybody gutsy enough to compete while forcing THEIR rules on the whole industry if you want to talk to their customers.

      Also, Google does not have the monopoly status to write checks they don't have money for. Google's founders are wise-beyond-their-years financially, and are running the company in a manner to keep it free of debt and owing to the bankers. The telcos know they won't win all the channels, but they'll bet big on the important ones, cut illegal deals once the dust settles, and let the little ones go for cheap. Google needs to pay careful attention to the little markets that will be cheap and buy them anyway. Google's "mistake" is that they expect government and banks to play fair...They wanted to make a fair offer knowing what the actual outcomes will probably be in terms of cash. They miss that the whole point of auctions like this is for the big players to always win.. if they want to. this situation really calls for Gates or Jobs that are good at whipping up the business players and making the "stab in the back" deals behind closed doors... The Google founders are too much of "nice guys" for this type of deal.

    6. Re:Google May Bid Yet by gad_zuki! · · Score: 4, Insightful

      >But it would be amusing to see Google keep upping the bid on them.

      Yes, and as a cell phone customer it will be extra amusing paying for this bidding war via raised rates.

    7. Re:Google May Bid Yet by FleaPlus · · Score: 2, Informative
      Also, on Google's Public Policy blog they flat-out say they haven't decided yet if they'll bid or not:

      http://googlepublicpolicy.blogspot.com/2007/07/sig ns-of-real-progress-at-fcc.html

      Just two months ago, the notion that the FCC would take such a big step forward to give consumers meaningful choice through this auction seemed unlikely at best. Today -- thanks in no small part to broad public support for greater competition -- the FCC has embraced important principles of openness, and endorsed the unfettered workings of the free market for software applications and communications devices. Moreover, over the last few weeks several leading wireless carriers have reversed course and for the first time acknowledged our call for more open platforms in wireless networks. By any measure, that's real progress.

      By the same token, it would have a more complete victory for consumers had the FCC adopted all four of the license conditions that we advocated, in order to pave the way for the real "third pipe" broadband competition that FCC Chairman Kevin Martin has been touting. For our part, we will need time to carefully study the actual text of the FCC's rules, due out in a few weeks, before we can make any definitive decisions about our possible participation in the auction.
    8. Re:Google May Bid Yet by darkmeridian · · Score: 2, Interesting

      On the other hand, Google has a market cap of 158.89 billion dollars. Sure, it's a lot lower than AT&T's market cap of 238.88 billion dollars, but Google spent a billion dollars on YOUTUBE! On YOUTUBE!

      This is going to be on hell of a bidding war, I'll tell you that!

      --
      A NYC lawyer blogs. http://www.chuangblog.com/
    9. Re:Google May Bid Yet by gregorio · · Score: 3, Interesting

      I'm not certain, but I think the relevant financial statistic for an auction is "Cash and Short Term Investments," which is what they could make readily available to use for bidding.
      It's not just about that. I have enough "cash and short term investments" right here in my pocket to spend a couple hundred dollars buying a single expensive toolholder for a CNC machining center. But I don't have a hundred thousand dollar CNC machining center, no factory installations, no sales office and no consumer base.

      It's never just about having money to buy stuff. You also need to make extra investments and assets to buy this kind of infrastructure. And they cost a lot of money.

      Spending half of Google's money on airwaves would also mean opening thousands of new jobs, creating new departments and searching for customers. And the investors are not happy with the current situation of Google. "I will not innovate if I can just use the investor's money to buy commoditized stuff and partially-inovating trendy companies like YouTube" will really hurt Google in the long run. Yeah, ok, the new market of internet advertising might grow to dozens of billions of dollars a year. That's why Google is worth so much, because of a new market. Investing on telecom commodities is not why they have so much money, to create this kind of old-business infrastructure.

      What's next, Google buying oil refineries just because "they can"? I'd be pretty pissed off if the company holding my money (shares) started abusing it.
    10. Re:Google May Bid Yet by Ewan · · Score: 2, Informative

      You must be looking at the wrong Google then, or the wrong AT&T

      Maybe this will help:

      http://finance.google.com/finance?q=google
      http://finance.google.com/finance?q=NYSE%3AT

      The part you want is 'Mkt Cap' where you'll find google is at $158 Billion and AT&T is at $241 Billion, and AT&Ts net income is over twice Google's.

    11. Re:Google May Bid Yet by Achromatic1978 · · Score: 2, Interesting

      Cash on hand is one thing. Access to funding another. Google would have to set up infrastructure, a cost likely to dwarf the bid for the spectrum alone. AT&T has most, if not all, of that infrastructure in place. If I were a lending institution, I'd see a far bigger / better return on investment lending AT&T the money to outbid Google.

    12. Re:Google May Bid Yet by Dun+Malg · · Score: 4, Informative

      What will happen is AT&T and Version will only bid high on the major areas with population and let the rest go by the way. The frequency segments being offered are not available in separate pieces geographically. When you buy (say) 710mhz, you get it nation-wide. Mod parent down. Post is misleading, not insightful.
      --
      If a job's not worth doing, it's not worth doing right.
  4. Google by MontyApollo · · Score: 2, Interesting

    If Google were to win the bid, then they could do those other things if they wanted. Google not bidding means they never really intended to win, they were just using this as publicity to try an force the stipulations they wanted without having to be the high bidder.

    Google sure has been trying to throw their weight around a lot lately.

    1. Re:Google by rootofevil · · Score: 4, Insightful

      given who they have been trying to push, and for what they have been trying to push for, i applaud their efforts.

      its about damn time someone at least pretended to stick up for the little guy.

      --
      turn up the jukebox and tell me a lie
    2. Re:Google by ajs · · Score: 4, Insightful

      Google not bidding means they never really intended to win, they were just using this as publicity to try an force the stipulations they wanted without having to be the high bidder.

      Google sure has been trying to throw their weight around a lot lately. Why don't you wait and see what happens before making judgments about a company based on what you think they'll probably do....

    3. Re:Google by MontyApollo · · Score: 2, Insightful

      I wasn't really making any judgments, don't get defensive about your favorite company.

      As others have pointed out, there is nothing wrong with Google doing this if it will benefit the consumer (which is what they claim they are trying to do).

  5. No by EmbeddedJanitor · · Score: 3, Funny

    It means you can only use single-sideband modulation. http://en.wikipedia.org/wiki/Single-sideband_modul ation

    --
    Engineering is the art of compromise.
  6. Halfway is no good by realmolo · · Score: 4, Insightful

    See, "open devices" and "open applications" probably means that you are free to use any device or application that has been approved by whoever wins the auction in question. I fully expect AT&T (or whoever wins, but they look like they will) to announce some kind of ridiculously elaborate and expensive "open licensing program" where if you want to make a device or applications that works with their network, you'll have to pay them gobs of money. They'll say it's for "adminstrative fees" or "Homeland Security Wireless Management and Auditing Charges" or some such crap.

    Personally, while I like what Google is trying to do, I think they should stay in the bidding anyway. I'd much rather have Google own the spectrum than literally ANY other telco corporation. Google isn't nearly as evil as those guys are.

    1. Re:Halfway is no good by Anonymous Coward · · Score: 4, Funny
      What can you do? At the very minimum donate some of AT&T's money to Google.

      Make it a habit to start your day with a google search for some Wireless, Cell, or AT&T related topic and then visit one or more AT&T spomnsored links on the top of the page :)

    2. Re:Halfway is no good by mabhatter654 · · Score: 3, Interesting

      They mentioned that on Twit as well. If Google got what they wanted, universal, nation-wide wireless bands, then they'd make the Cellular monopolies obsolete in a matter of a few years. That's one BIG stick to beat AT&T with after the "threats" they made about Google "paying" it's way in the future. Also, that would go nicely with the "google on a truck" and dark fiber projects they already have!! Google almost has enough pieces for a true 3rd independant national internet! That alone would be worth the FCC taking a look, but they're too shallow to see beyond quarterly profits.

    3. Re:Halfway is no good by TooMuchToDo · · Score: 2, Insightful

      Actually, Google is quite close to having it's own private darknet across the country. They fear the last mile being taken away by Comcast, AT&T, et. al. This is where 700mhz comes in.

  7. Is there a purpose for the FCC anymore? by shaitand · · Score: 2, Interesting

    Obviously the FCC is no longer concerned with the purpose it was created for (encouraging competition in communication related industry) so why do we still have an FCC?

    1. Re:Is there a purpose for the FCC anymore? by Applekid · · Score: 3, Insightful

      To impose moral values on the public at large through the banning 7 dirty words and other nanny-says-no naughtiness.

      --
      More Twoson than Cupertino
  8. Does this even make sense? by shaitand · · Score: 2, Interesting

    "The agency said yes to "open devices" and "open applications," thus requiring the auction winner to permit consumers to use any device or application on the network. But the FCC turned down "open services" and "open networks,"

    Can you have one without the other? If the winner is required to allow free use of the spectrum for devices and applications doesn't that include devices used to provide services? I mean sure, they wouldn't have to let you use their infrastructure or buy access at wholesale prices, but they couldn't stop you from building your own infrastructure.

  9. Comparable to the Retail Electric Industry by sampson7 · · Score: 4, Interesting

    In the United States, the electric industry also has open access requirements that are comparable to those at issue here. Except, instead of "spectrum" the open access condition applies to power lines.

    The US essentially has two types systems for moving electricity around: the Transmission System and the Distribution System. Transmission System lines are typically high voltage and used for wholesale sales of electricity. They are predominately federally regulated. Distribution System lines are typically lower voltage and used for distribution of power to retail end-use customers.

    However the open access requirements are quite different. Transmission Systems are open to any user (with lots of strings, but in theory anyway). So someone who wants to sell power at wholesale essentially has the same right of access to the transmission lines as the utility that owns the lines does. In other words, the utility's transmission functions are no longer vertically integrated (at least in theory) with their power generation functions. This concept is known as "comparability." Sadly, the FCC rejected this type of open access.

    For distribution systems, the utilities are still far more vertically integrated and largely control who has access to their power lines. While they still have to provide some level of access to competing users, there's no comparability concept and no sense that the utility is in the business of "renting" its system to all users and that its affiliated branches are just another user. Instead, we are going to continue to see integrated networks where the owner of the spectrum is able to stiffle innovation. Requiring that the purchaser of the spectrum re-sell it to competing companies would have guaranteed far more interesting uses of this spectrum.

    Of course, allowing for phone transferability and the other items are good; but is a public safety system really the biggest concession that the FCC could extract? Yes, it is important. But nobody was going to object to giving fire fighters the communications equipment they needed.

    Sad.

  10. Re:Half way? by wljones · · Score: 2

    Half way in this case refers to yet another instance of a bureau of the US Government (FCC this time) implementing a vast project with half-vast methods.

  11. Re:No Way. by Achromatic1978 · · Score: 2, Insightful
    Uhhh, here's a clue: the FCC only gets the money of the winning bidder, not of all bidders. The winning bid would have almost definitely been more than $4.6B.

    But don't worry, twitter, you spin it to make it sound like the FCC turned down $4.6B just to be in bed with the telcos.

    It doesn't have any basis in reality, but it's hardly like that has stopped you before, has it?

  12. Re:Google 700mhz Fund? by Achromatic1978 · · Score: 2, Insightful
    And the promise that they will put that money towards the greater good is, where, exactly?

    Or will it go into expanding the ad service, infiltrating it further into our lives. I don't know, but that seems a logical end-result of "Hey, ad revenue is up ten per cent this quarter!", not "Hey, that extra $500M we made on ads, let's blow it on that FCC auction".

    Forgive me, but I have little to no interest in funneling money to a for-profit corporation that, all mottos, blinders and fanboys aside, has profit and its success, not mine, as its goal.