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FCC Puts 4.6 Billion Minimum Bid on Spectrum Auction
ChainedFei writes "Wired News notes that the Spectrum auction is moving forward, with the FCC placing a minimum bid for the C-block spectrum being offered at $4.6 billion. That, coincidentally, was the amount that Google fronted as a minimum bid to endorse certain open standards for the spectrum being sold. This is essentially a move to shut out smaller possible competitors while also maximizing the money the auction will generate for the grade-A areas of the spectrum. In addition, any single bidder wishing to purchase the entirety of the spectrum must front a minimum of $10 billion. 'According to the FCC, nearly all of that C block aggregate reserve price will go toward a package of U.S. national licenses. This portion of the spectrum also happens to be the one with two open access conditions attached to its sale mandating that all devices be allowed to access the band and that all applications can be able to run across the network. If the reserve price isn't met, the auction will be rerun without these two conditions in place, according to the FCC.'"
The porn industry should totally buy that spectrum, and have on-demand porn serving. You know you want it.
I.e., if you wouldn't have the money to bid up and up, then you wouldn't be in the same competition anyway.
./ these days
Although, to be fair, it might force the bidding war to be shorter -- but knocking out the competition right from the start because they can't afford it doesn't really affect the final outcome. It just forces the bids to be realistic from the start.
So much political agenda on
This portion of the spectrum also happens to be the one with two open access conditions attached to its sale mandating that all devices be allowed to access the band and that all applications can be able to run across the network. If the reserve price isn't met, the auction will be rerun without these two conditions in place, according to the FCC.
Great. So if AT&T outbids everyone, and comes in under the reserve, then we can all kiss the open spectrum goodbye. I wonder how much the FCC charged AT&T for that guideline.
Speedy thing goes in; speedy thing comes out.
A B (block) C
Why are they setting a minimum bid? They should just start it at $0.01 and keep saying "reserve not met" until it passes the $4,600,000,000.00 point.
Really? Who would have ever imagined?
---- Booth was a patriot ----
4.6 billion is the bid with the remainder going towards a security deposit, so the public can expect to get its spectrum back in top condition.
Or, as with China, will they once again sacrifice their "principles" for the sake of convenience?
This reminds me of the auction for UMTS licenses that were held in the Netherlands a few years ago. This was back in the mad days when investors and corporations paid silly prices for cable and telco companies. UMTS was the next big thing, and companies were eager to bid for the licenses. So, politicians ended up congratulating each other on how much money they raked in for the public coffers... and companies suddenly found themselves so strapped for cash that they no longer had the money to invest in the expensive rollout of UMTS itself, or even for interim technologies such as EDGE. We were stuck in the stone age with GPRS, and when UMTS finally appeared on the market, it was years late, with lousy coverage, and the plans were horribly expensive (at first it wasn't even available to consumers; only to corporate subscribers). The auctions set back the development of our telco infrastructure by years.
People in favour of these auctions seem to forget that companies are not in it for charity, and investors like to see a reasonable return on the money they put in. The cash for these licenses have to come from someone, and that someone is you, the dumbass consumer.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
What use does Google plan to make of these frequencies? I can't imagine doing wifi of 700mhz.
Man, eBay is going to make so much money on the Final Value Fee for this auction
-- lol pwned
Wait -- can someone clarify this for me:
Is the FCC using "reserve" and "starting price" interchangeably? Or are they two separate things (similar to an eBay auction), where there's a starting price for the bidding, and a much higher, secret reserve price?
It sounds like the FCC did what Google wanted, and are running the auction with the interoperability and open-access mandates in place. And they're starting the price out at a level ($4.6B) that Google said they would pay, given those conditions. So that seems like a good thing. In fact, if that's the case, it seems like the auction would be almost guaranteed to go through with the conditions in place.
But is there a separate, higher reserve price somewhere? Some much higher amount that would let Google bid $4.6B, but still fail to meet the reserve, and let the FCC re-run the auction without the interoperability/open-access conditions?
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
An article from July.
The company would like the FCC to embrace four additional conditions as part of the auction rules: open applications, open devices, open services, and open networks. Should the FCC agree to do so, Schmidt says that Google will jump in on the bidding at the FCC's $4.6 billion reserve price.What is a 'package of U.S. national licenses?' Does anyone know where the money from this auction goes?
Insert Generic Sig Here:
If they can't get 4.6B for the spectrum, they'll remove the two open access restrictions? WTF?
It should be the other way around... if they can't get 4.6B for the spectrum, then they'll ADD the two open-access restrictions that they didn't include. Then at least, they know Google would bid 4.6B and maximize their profits while also having a more open network.
Regulation and selling of otherwise "free" bandwith is little more then another hidden tax.
FCC Puts 4.6 Billion Minimum Bid on Spectrum Auction?
I'll take two of them!
Dedicated Cthulhu Cultist since 4523 BC.
For the us dull knifes in the drawer, why does the FCC get to sell this space? I mean, does the government own these frequencies? Is it a business and gets to keep the money to itself?
My ASS! Google is the ATT of the new millenium.
"The auction will be expensive, last year's auction for a much-less-attractive slice of spectrum netted the US Treasury $13.9 billion" - http://arstechnica.com/news.ars/post/20070720-goog le-announces-intent-to-bid-on-700mhz-spectrum-auct ion-if.html
This spectrum will probably go for 20 - 30 billion. How much cash does Google have?
Just seems like a fund raiser to me, FCC is short on cash somewhere and saw an opening to make a buck or two. Can anyone explain what range of the Electromagnetic Spectrum the FCC has control of?
CS: It is all sink or swim...oh and did I mention there are sharks in that water?
is certain protections of the bands.
Of course, people who do less knee jerking and make an effort to use there heads all ready knew this.
The Kruger Dunning explains most post on
"How much cash does Google have?"
The question is, how much liquidity does Google have, and how does it help their bottom line.
All by itself, I don't see how it helps Google, but it would be nice to have that spectrum opened up to all devices so that we can finally have decent coverage without draconian device restrictions. Just a complete guess is that Google wants to "sublet" the space to smaller device makers.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
to the criminals who brought you Operation Neck-Deep-In-The-Big-Sandy.
Cheers,
K. Trout
If only the minimum bid were placed that would be about $15.33 per citizen. You'd never ever ever get every citizen to go in together to place a bid, but I would definitely bid $1000 to have a non-F-ed up mobile phone bandwidth. I don't know what exactly to do with it after bidding on it (and owning some minuscule fraction of it) but surely a great cell phone co-op wouldn't be unachievable.
Will you take a check?
I don't think Google needs to own this space. As long as it goes for more than the reserve, Google is flying high on whoever buys this space.
Google's requirements just made sure that Google can step into the game in this juicy section of spectrum even when they don't win the bidding (I don't think that they're going to try very hard).
Either way, I highly doubt that we'll see a completely free wireless mesh that only costs the initial investment of the device crop up any time soon. Your tax dollars hard at taxing you...
(Yes, I know that it would take a lot of hops to cross the country...)
Hey! How many slashdot readers are there.. if we each chipped in... oh... we're all comparatively poor.
I predict a record-breaking bid will ultimately win this one.
/ 10/1236207 = big revenue.
The two conditions increase the value of said network. Based on Metcalfe's Z-squared principle more nodes = more value. With a little faith and some vision this will be a bonanza for the winner(s).
Apple may not want to hear this but this network + iClone http://hardware.slashdot.org/article.pl?sid=07/08
Hope is the currency of fools
And all I wanted was a Hz or two. Dang it all.
Yea, more monopolies.
Seems to me the best way to get Microsoft interested in this bid is for Google to go public about their interest. My guess is Google doesn't even want it but wants to see M$ pony up some big $$$, influence the price and help set some conditions.
I mean get real, if Google really did want the spectrum, it would seem to be a big mistake to telegraph their interest the way they have, especially knowing that M$ has a big interest in anything that would hamstring Google...
Belongs to the public. The public needs to fight to regain the airwaves.
Spectrum shouldn't be held hostage for filling government coffers.
We could have very cheap phones for everyone. Not with ATT guy running the FCC.
Belongs to the public. The public needs to fight to regain the airwaves.
The public never lost its property rights to those airwaves, we simply elected to rent them out to the highest bidder so that the proceeds of that auction could be used to fund the purchase other goods and services that we the public wish to conusme rather than attempting to operate them directly ourselves with all of the risks and costs that that entails. The government, acting on behalf of and in the interest of the people, is our agent in that sale. Now, you might argue that the government is squandering the proceeds or not getting the best possible price, but really we never lost control of the airwaves.
Spectrum shouldn't be held hostage for filling government coffers.
The government coffers are really *our* coffers in that the government uses this money to provide us with public goods that we like to consume. If the government did not receive this money from the auctions then it would have to raise the cash necessary to provide these public goods in other less desirable ways, such as raising taxes.
We could have very cheap phones for everyone. Not with ATT guy running the FCC.
Selling the right to use the spectrum at auction and then allowing the market with competition to decide the outcome yields the best and most fair result for everyone. You will have your cheap phone for everyone much faster, and at a much better price, from the market than you would from government control and central planning. Remember here that wireless spectrum is not entangled in "natural monopoly" scenarios with last mile physical infrastructure problems so the market is much more able to reach the optimal result more quickly than might be the case in fiber optic or cables and other utilities.
I'm too lazy to research this, but I am curious: is this a sale of the rights to use the spectrum or is it a lease? More specifically, once a company has purchased the rights do they get to keep it until they decide to sell it (i.e. they OWN the rights and no one can take it away from them), or once a company has purchased the rights, do they get to keep it for a set period of time (ex. 99 years) and then it goes up for bidding again at which time they will have to re-bid for the rights? Without knowing the answer, I feel it would be stupid for the gubment to just make as much money as they can to do a one-time sale, when they could "rent" the spectrum for a lengthy but limited period of time and then sell the rights all over again. After all, a right that may be worth $11B today may be worth $100B in 20 years.
They are always the de-facto pioneers for commercializing new media technology. It would make sense. Unfortunately, even all of them worldwide probably can't afford the 4.6 billion price tag.
The public doesn't own the airwaves. It's owned by corporate america because they are the only ones that can afford the ridiculous auction prices. What would happen to the average citizen if they broadcast something on unused piece of spectrum owned by the private sector? If you guessed thrown to jail, you would be right.
The government coffers are really *our* coffers in that the government uses this money to provide us with public goods that we like to consume. If the government did not receive this money from the auctions then it would have to raise the cash necessary to provide these public goods in other less desirable ways, such as raising taxes.
You may find it shocking but maybe our government spends money excessively just to buy votes. Some political experts do suggest this as happening. And if the government is so good with our money then lets give them 'all' of our money. That would surely solve all of our problems.
Selling the right to use the spectrum at auction and then allowing the market with competition to decide the outcome yields the best and most fair result for everyone. You will have your cheap phone for everyone much faster, and at a much better price, from the market than you would from government control and central planning. Remember here that wireless spectrum is not entangled in "natural monopoly" scenarios with last mile physical infrastructure problems so the market is much more able to reach the optimal result more quickly than might be the case in fiber optic or cables and other utilities.
Creating a monopoly for just 'ONE COMPANY' to horde spectrum does not equal the free market. The gov makes makes a buck and that doesn't always filter down to average Joe citizen
A better idea is to free and democrotize our spectrum much like the internet or even better than the internet.
Pick yourself up a Citizen's Band radio and see how that compares with a regulated portion of the spectrum.
These comments are my own and do not necessarily reflect the views or opinions of my employer or colleagues...
Before anyone goes throwing their money away, I just found a much better deal! http://cgi.ebay.co.uk/Sinclair-ZX-Spectrum-48k-99- NEW-and-BOXED_W0QQitemZ270156223485QQihZ017QQcateg oryZ11994QQssPageNameZWDVWQQrdZ1QQcmdZViewItem
They should sell it for like $1 million + 10% revenue share. $6 Billion is chump change for the value this bandwidth will create.
Check out my lame java blog at www.javachopshop.com
The public doesn't own the airwaves. It's owned by corporate america because they are the only ones that can afford the ridiculous auction prices.
It is *rented* by corporate America with certain rights and privileges, including exclusivity of their right to transmit on the selected frequencies, it is not *owned* by corporate America. I don't care that I cannot personally afford the cost of exclusive access to a desirable band of public frequencies. I for one would rather have the money than be able to play amateur radio hobbyist with parts of the EM spectrum that are worth billions on the open market. The voters collectively decided that we would be happier selling the rights to use the property rather than reserving the property for our direct and personal use. You may have a different set of personal priorities (i.e. you are an avid amateur radio enthusiast) but the rest of us do not have those same priorities...we would rather have money and spend on other things.
You may find it shocking but maybe our government spends money excessively just to buy votes. Some political experts do suggest this as happening.
It certainly does happen and there is nothing that a free society can do about it, because every citizen or group of citizens has the right to petition their government without restriction. In the absence of a clear quid pro quo (aka bribe offered in exchange for distinct actions) there is nothing that can be done to stop this. If you want free speech then you have to be willing to live with the side effects.
What would happen to the average citizen if they broadcast something on unused piece of spectrum owned by the private sector? If you guessed thrown to jail, you would be right.
If you trespass on the property of another then you can expect the same result. Private property is just that...private and if the right to use a public property has been exclusively granted by lawful contract then it is the same result if you trespass on the right of the contract holder to use and enjoy the property as per the terms of the contract.
And if the government is so good with our money then lets give them 'all' of our money. That would surely solve all of our problems.
Markets work and governments don't...that is the whole reason why we are selling the right to use the property at auction rather than having the government run the wireless industry. The government exists to prevent violence and coercion and enforce the rule of law. They need resources or the money to purchase them in order to do this and I would prefer that they get that money from auctions of spectrum rather than by raising taxes.
Creating a monopoly for just 'ONE COMPANY' to horde spectrum does not equal the free market.
It sure can, provided that the auction nets enough value for the asset being sold (spectrum in this case). The value of any monopoly is never infinite so provided that the public receives a high enough price in the auction, exclusivity (i.e. monopoly) can be part of the deal. To see why check out the article on Present Value.
The gov makes makes a buck and that doesn't always filter down to average Joe citizen
It doesn't have to provided that the government uses this money to perform its duties rather than taxing our incomes. A tax break is functionally equivalent to a direct payment from the government in the form of goods and services and it is more efficient too because the money didn't "leak" on its way through the system.
How does a huge minimum bid and minimum segment size promote anything but... well, government coffers and big business dominions? This makes sense from neither a conservative or liberal standpoint.
I could see capping the amount a single entity could take, thus encouraging competition and opening it up to smaller players, and then the smaller players could either take it and run, consolidate amongst each other, or dangle it in front of the bigger players.
Or I could see no limits at all and let them go for the price they are worth.
Terrorists can attack freedom, but only Congress can destroy it.
No, I argue that the spectrum should not be sold in the first place. It is a public resource, like air, water or light.
You are confusing the EM spectrum with a Public Good. It is *not* the case, for example, that your unfettered use of the EM spectrum does not interfere with my unfettered ability to use that same EM spectrum. Thus the EM spectrum, particularly within a specific geographic region, is more correctly understood to be a Private Good. I didn't elect anyone to sell it.
You agreed to be bound by the laws of United States by living in the United States. If you don't agree then don't live here or don't enter the country...our country our rules. The government has the right to regulate interstate commerce as granted by the Constitution and the regulation of the EM spectrum falls under that jurisdiction.
Because the government claims to act in the best interests of the public doesn't make it so.
Perhaps not, but they have a duty to the American people, which they cannot lawfully and knowingly breach, to do precisely that.
Except that a lot of that money doesn't go back to the public but to line the pockets of politicians, corporate friends, all of who are eager to have it. You think that government agents don't personally benefit when they make money from these auctions?
That is irrelevant to the point of the discussion. The government has a fiduciary duty to the people, just as any company would have to its shareholders, to maximize profits from the property, in this case the EM spectrum, and the best way to do that is for the government to *rent* the rights at auction. What the government does with that money is an entirely separate discussion.
If the government did not auction air, public roadways and every other kind of public property it would have to raise taxes to make up the deficit... Except that that's not true at all
Air cannot be auctioned because it is a public good (see above) although the right to pollute may be, it depends upon how one defines pollution. The roadways should be privatized as well, but that is a different discussion. The government does not cost zero dollars to run so it has to be funded somehow and there are only so many ways to do that so take your pick. I would prefer that the EM spectrum auction, mineral rights on public lands, etc be sold to the highest bidder rather than paying additional taxes, but that is why we have elections, to decide such things or rather to elect those people who will decide on our behalf.
Granting a monopoly/oligopoly is the antithesis of competition.
We are not "granting" exclusivity, we are *selling* it on the open market...there is a difference.
Open spectrum advocates don't argue for increased government control, but rather less.
And it will never work. The spectrum cannot be open because it cannot support infinite bandwidth and what is to stop me from interfering with you if the spectrum is wide open? It would be anarchy without regulation. The protection of property rights, by law preferably and force if necessary, is properly understood to be the role of the government.
You will have your phones (and more importantly new innovative services), cheaper, faster, with more features when the spectrum is opened to everyone.
Not if I cannot make a profit because everyone is interfering with everyone else in a free-for-all cage match for the spectrum.
With open access comes innovation and competition.
That is the point of the auction. The bidding is open to anybody who wants to bid. We live in a capitalist society. Priorities are decided by the marketplace and whoever is willing and able to pay the most will receive the good or service. The theory being that those able to pay the most are those most able to properly develop the property and manage the risk of taking on such a large liability (i.e. paying the winning bid).
Chris Rock: How much for just one Hertz?
...
...
Chris Rock: Ya got any soda?
Isaac Hayes (aka Chef from South Park): Ten billion dollars.
Chris Rock: Aw, c'mon, now! Look out for a brother, man, c'mon, yeah. Check this out: why don't you let me get a sip for $4.6 billion?
Isaac Hayes: My cups cost more than $4.6 billion!
Chris Rock: All right, fuck the cup. Pour it in my hand for $3 billion.
Chris Rock: You got change for a hundred billion?
Damn, I guess you can count me out. That's too bad. I could get by with just a 20khz slice of that.
What?
It will be interesting to see where the proceeds from selling the public airwaves will go. Will the proceeds come back to U.S. citizens in some beneficial way or will we end up subsidizing the buyers' cost through higher fees for the services that will be provided over this spectrum? Is there policy that determines where this revenue goes?
It is no different than people wanting municipal water,roads or electricity. There is only one resource and it shouldn't be hoarded by a single company. The public is uneducated about this and thinks that giving the monopoly over for a sum of money is a good deal but where do you think the companies get the money to pay these prices? By billing the customer. All the FCC is doing is shifting "taxes" from something the tax payer is able to notice to a bump in the price you pay for a service. It's much easier to take citizens' money when they aren't aware the government is doing it.
This artificial monopoly only hurts new technologies while providing phone companies to block out competition which would reduce prices. The auction & the monopoly keep prices high which I am against.
Creating a monopoly for just 'ONE COMPANY' to horde spectrum does not equal the free market.
It sure can, provided that the auction nets enough value for the asset being sold (spectrum in this case).
Well, I think the point the parent was making was that the government, being a government presiding over a capitalist society, would best serve its people by setting up a free market with the people's spectrum.
The value of any monopoly is never infinite so provided that the public receives a high enough price in the auction, exclusivity (i.e. monopoly) can be part of the deal. To see why check out the article on Present Value.
While I agree that the spectrum is SOLD on the free market, it will not be used to PROVIDE a free market to the people who OWN the spectrum. Purchasing the people's spectrum at a "free market price" that results in monopoly would not be the majority opinion of a free market.
So, do you work at or are paid for by Verizon?
However, if broadcast spectrum was just a free-for-all of everyone doing whatever the hell they wanted, it would be chaos, since people would be free interfere like hell with each other's uses without there being a particularly clear cut way of determining what's okay and what isn't. Thus, the broadcast spectrum is more or less owned by the government who then leases out the spectrum under various conditions.
i o
t mli ns_open.html2 /spectrum/index.html
except that this is TOTALLY WRONG.
http://en.wikipedia.org/wiki/Open_spectrum
http://en.wikipedia.org/wiki/Software-defined_rad
http://en.wikipedia.org/wiki/Cognitive_radio
http://en.wikipedia.org/wiki/Spread_spectrum
http://en.wikipedia.org/wiki/GNU_Radio
http://www.greaterdemocracy.org/OpenSpectrumFAQ.h
http://www.boingboing.net/2007/02/14/lessig_expla
http://www.lessig.org/blog/archives/003708.shtml
http://dir.salon.com/story/tech/feature/2003/03/1
To enable signals to get through intact, the government has to divide the spectrum of frequencies into bands, which it then licenses to particular broadcasters. NBC has a license and you don't.
Thus, NBC gets to bathe you in "Friends," followed by a very special "Scrubs," and you get to sit passively on your couch. It's an asymmetric bargain that dominates our cultural, economic and political lives -- only the rich and famous can deliver their messages -- and it's all based on the fact that radio waves in their untamed habitat interfere with one another.
Except they don't.
"Interference is a metaphor that paints an old limitation of technology as a fact of nature." So says David P. Reed, electrical engineer, computer scientist, and one of the architects of the Internet. If he's right, then spectrum isn't a resource to be divvied up like gold or parceled out like land. It's not even a set of pipes with their capacity limited by how wide they are or an aerial highway with white lines to maintain order.
Spectrum is more like the colors of the rainbow, including the ones our eyes can't discern. Says Reed: "There's no scarcity of spectrum any more than there's a scarcity of the color green. We could instantly hook up to the Internet everyone who can pick up a radio signal, and they could pump through as many bits as they could ever want. We'd go from an economy of digital scarcity to an economy of digital abundance."
So throw out the rulebook on what should be regulated and what shouldn't. Rethink completely the role of the Federal Communications Commission in deciding who gets allocated what. If Reed is right, nearly a century of government policy on how to best administer the airwaves needs to be reconfigured, from the bottom up.
No where in the US Constitution is the FCC authorized to exist.
My bet is that when Ron Paul is elected he will abolish it.
Libertas in infinitum
So, do you work at or are paid for by Verizon?
Nope, I just have a side interest in economics. I really don't care who buys the rights to the spectrum so long as the government, and by extension the people, gets the best possible price and the best way to ensure that is with an auction.
The auction & the monopoly keep prices high which I am against.
If you don't like the price then do not purchase the product. High end wireless services are not a necessity of life. The auction ensures that only the serious bidders, who in theory are best able to implement and roll out the new technologies, are given serious consideration for purchasing the spectrum. Would you want to entrust the spectrum to some low rent mom and pop shop in Peoria or one of the big corporations like Google? How would you decide who gets to use the spectrum, given that we cannot allow everyone to use it simultaneously, if not by price? Political favors? Who is cool and who is not? Please.
Selling the right to use the spectrum at auction and then allowing the market with competition to decide the outcome yields the best and most fair result for everyone. You will have your cheap phone for everyone much faster, and at a much better price, from the market than you would from government control and central planning.
LOL! Your reasoning is so obscure that I don't know how to start to refute it... I tought it was clear to anyone that if company A has to pay for BW, then that money is added to the customers' bill... Plus the convergence of technology will slow down, leading to more expensive devices.
Correct,Hands off Public Property NO more Privatization. Privatization = Robbery. Remove ALL Toll Roads,kick Federal Express out the US Post Office. A properly run and supervised Federal Post Office or County Water Works can run cirles around Wall Street-Run Gangster and Bankster Operations and still give us more for our Tax Dollar! So ,quit Bullshitting the Public about Privatization!!