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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.'"
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.
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.
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...
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 $4.6 billion reserve price.If they can't get 4.6B for the spectrum, they'll remove the two open access restrictions? WTF?
It should be the other way around... if they can't get 4.6B for the spectrum, then they'll ADD the two open-access restrictions that they didn't include. Then at least, they know Google would bid 4.6B and maximize their profits while also having a more open network.
Regulation and selling of otherwise "free" bandwith is little more then another hidden tax.
700mhz is an almost ideal frequency. Its is low enough to penetration buildings (Unlike Ghz), but is still high enough that shadowing would not be a problem like with the lower frequencies...
:-)
To me, the company that is really missing the boat on this is M$. Their cash holdings trump anything Google can come up with and could easily buy the entire frequency map. The uses for this are endless... Iridium v2 I think are the best idea from a longtimer standpoint. They could sell low cost packages where you put a small dish on your house and get basic services for free. Then have an access point built directly into the unit... Instant national WiFi coverage!!
Effective range:Out with the old UHF, in with the new:And, cost:
I hope, when they die, cartoon characters have to answer for their sins.
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?
eBay isn't going to make jack.
Purchase price: $0.01
Shipping: $4,899,999,999.99
Man, you really need that seminar!
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.
Sound great. Why don't you paypal me the money and I will hold on to it until the auction?
Quality Hosting e3 Servers
And all I wanted was a Hz or two. Dang it all.
What you have to understand is that the purpose of the FCC is to take complete and absolute control as possible of the natural resource of the EM spectrum, and make that resource available to corporations to resell to the citizens at a profit, as well as carve off a few chunks for the government to use any way they like.
The citizens are only allowed the tiniest possible token portions of the resource, with usage of those portions additionally limited in many critical ways. They do all this under the guise of "protecting" the resource.
Once you wrap your head around this, everything the FCC does makes sense.
The FCC probably qualifies as one of the most corrupt agencies of the US government in the sense that what it does is extremely disjoint from the actual interests and needs of the public, and intentionally so. The US government is supposed to serve the interests of the people, not the corporations.
I've fallen off your lawn, and I can't get up.
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.
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.
If some of the wireless device manufacturors got together and put together a consortium to bid for the spectrum, I don't see how the big telcos could match the bids.
:(
att and verizon are big but not that big. I guess we'll see during the bid...
actually: ignore me, from forbes 500, I see that verizon is 13th with 93b revenue and att is 27th with 63b. The closest techie is M$ with 44b (all 2006 numbers)
So, it's not a streach to see this happen...
Ben
Regurgitating, eh? I'm an extra class amateur radio operator and I hold an FCC commercial radio operator's license (used to be a first class license, guess it still is, sort of, though they don't give them out any longer.) My name is found in more than one edition of the radio amateur's handbook as an innovator, I received technical achievement of the year from a television group at the Dayton hamvention, and some of well known ham radio manufacturer AEA's commercial products were of my design, as well as my responsibility to get tested for FCC approval. My designs have been on the front cover of 73 and reviewed extensively in 73, CQ, and QST magazines - and elsewhere. I've been the engineer at several 10kw through 100kw radio stations, I've been a DJ (progressive rock), and I've even had my fingers in pirate radio a couple of times. Also related to all this, I'm a musician and a recording engineer.
So it could just possibly be that I might have my own informed opinion on these matters, rather than just parroting what you appear to think is mindless slashdot groupthink. Now, for your edification, Here's a short (and woefully incomplete) list of things I can't do for the "common good" by specific FCC edict:
And of course, the amateur radio bands that I am allowed to transmit upon are only available to me because I have passed several technical tests according to the requirements of the FCC; your average citizen has no access to the amateur bands as you should know, and so you cannot hold up the amateur bands as a resource for Joe or Jane blow to do anything in particular with. Not that they are very useful what with all the restrictions on what we can do with them, anyway.
I think that you and I fundamentally disagree on what the phrase "common good" actually means.
I've fallen off your lawn, and I can't get up.