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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.

19 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. 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 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.

    4. 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.

    5. 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.
    6. 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.
  3. 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.
  4. 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.

  5. 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
  6. 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.

  7. 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
  8. 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.

  9. 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....

  10. 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.