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Spectrum Auction Could Be A Game of Chicken
Ardvark writes "Google promised some time ago to bid at least the reserve price for the C block of 700Mhz spectrum if the FCC accepted its demand for an open access rule for devices using the band, which the FCC did over Verizon's objections. If the reserve price is not met the rule will be dropped and the block re-auctioned. It appears now that bidding has stalled just short of the reserve price. It's assumed that Google has no interest in becoming a cell phone company and with a recession looming the 700MHz spectrum now seems worth a whole lot less. If Google's strategy was to force the bidding above the reserve but still lose the auction, Verizon could be calling their bluff, threatening them to live up to their word and buy what to Google could be the equivalent of a $4.6 billion 'doohickey.'" Update: 01/31 16:01 GMT by Z : And just like that, the plot thickens: the C block has hit the reserve price during bidding.
and donate it to the poor and homeless... then they could use the internet to find jobs and houses for sale... ~
- Your stupidity got you into this mess, why can't it get you out? -Will Rogers
I'm not surprised that US companies aren't falling over themselves to bid.
Take a look at what happened in the UK when the 3G air was up for sale - they threw money at it and ended up with next to no customers.
With the way things are economically at the moment, people are not looking to up their monthly spend on their mobile phone bill. Companies will have a hard time recouping a huge outlay.
simon
The telecoms can take the heat for being heartless monopolies, for providing terrible service at a high price, and for leveraging their monopolies to avoid upgrading their taxpayer-financed infrastructure.
They can't, however, be accused of not doing what will profit them the most in the short term.
In this case, they've collectively called Google's bluff. I don't see Google having $4.6B in spare cash, to purchase the spectrum they have no idea how to make money on. This is a tough spot for Google, because not only do they stand to lose their coveted "shared spectrum" rule, but they also stand to lose much of their perceived invulnerability on the market.
I bet they're just waiting. 30 seconds before it ends all their auction sniper programs will bid it up another 30%.
"People who think they know everything are very annoying to those of us who do."-Mark Twain
Too bad there are no jobs, and the houses are way too expensive.
Virtually all middle-class job fields are either stalled, or firing... and as far as the real estate market goes, here's a story.
In 1995, about 50% of Nassau county (Long Island, NYC metro area) residents could afford to purchase the homes they were living in, given market price. In 2005, that number was down to about 5%. Yes, we have had spectacular success in destroying the middle class. At least they're scared of being poor, so they keep on working.
As George Carlin noted (albeit a hyperbole): "The middle class pays all the taxes, and does all the work. And the poor are just there to scare the shit out of the middle class".
First, go here https://auctionsignon.fcc.gov/signon/index.htm Then put in Auction number 73 under public access... then click go. According to this, they are at a total of $11.5 billion now for the total... next round starts in ten minutes.
Victory is gained, not in knowing your opponents next move, but in preempting them.
I trust Google will not let us down. They are just waiting to see if they can get it for 4.6 instead of 4.7 Billion.
And then when they get it they will build out a solar powered wireless network that will offer broadband everywhere. Not only that it will be free and be faster than FIOS. It will be IPv6 so every user can have their own block of static IPs and it will smell like home made cookies and be as warm as a puppy.
Yea that is it.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
Whatever Google is maneuvering to do, they're probably more likely to employ the kind of people who know how to play the game than Verizon is. Whatever Google is trying to achieve, my money's on them. (Well, not really; I don't have any GOOG shares.)
FIOS isn't "good" because it's a good service. FIOS is only "good" because this is Verizon's final "fuck you" to the taxpayers that helped fund its infrastructure, and an open attempt to become a totally unregulated monopoly. You see, they HAD TO lease the copper lines, because FCC mandated it. They don't have to share the fiber optics. As a result, they've been busy building the fiber network that would cement them as a monopoly, while completely ignoring troubles with their copper... leveraging the reduction in the quality of service over the copper lines, to attract people to the fiber.
The article summary is garbage, or should I say simply wrong?
Google set 4 conditions it wanted to see. The FCC agreed with 2 of them, so Google is faced with half a glass. (Yes I know the Engineer's view of half a glass.) I don't recall them saying they'd bid reserve to ensure only half of their wishes.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
If Google wins, and they don't know what else to do with it, I think they should release their block of the 700 MHz bandwidth under the GPL.
RMS would be so happy!
Never ask for directions from a two-headed tourist! -Big Bird
they called it "seward's folly"
it was a joke. why did we spend $7 million on some permafrost again?
same with anyone who doubts the value of this auction
i can't see why a monopoly on a prime band of communication spectrum can't be anything but pure gold. there's only so much spectrum, but more and more people and more need for communication tech every day
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
Now that's what I call overclocking!
My other account has a 3-digit UID.
And no new bids. Watch it in REAL TIME: https://auctionbidding.fcc.gov/auction/results/results.htm
SmartBox
The reason they had to lease the copper, was the original copper infrastructure was gov subsidized. The fiber costs are being eaten completely by Verizon, and while I am sure there are some tax breaks involved, there is no subsidy from the gov, state or local. Surprisingly though, the service itself is great, I have had very few problems, (yes there are some that had horrible installs and could never get some things working), the only issue I have is with the billing department which I have to call every month to get the appropriate triple play discount credited to my account since their system keeps losing it, and their CS.. it is abysmal and thats me being nice to them. The install actually was pleasant, and its not subcontracted like comcasts installers, they get paid hourly, not by the number of jobs they get done, so whether they do 5 installs in a day, or spend all day at your house rewiring your internal cable infrastructure, they get paid the same.
I came, I conquered, I coredumped
That the bidding often stalls in the middle of the auction, and picks up like crazy near the end. This isn't ebay of course, but it's certainly an example of auction behavior to pay attention to.
This auction will go on for months, and we're at the one week mark now?
Anyone who says Google is "bluffing", or the price won't go up is full of it. Google may not bid as much as they say, they may, someone else might bid more, or who knows? It's just way to early to be saying much of anything about the auction, what the different strategies are, and who will win.
AccountKiller
They're obviously just waiting till the last minute so they can snap it up for 4,299,999,999.99.
I bet they have a wicked fast sniping script. After all they're Google!
Bidding on round 17 just ended and now it has been bid up to $4,713,823,000, meeting the reserve price.
This article was just wasteful speculation. I guess that shouldn't surprise me.
In a world where we've only *begun* to tap the potential for wireless digital connectivity, I can hardly believe that 'owning' some spectrum could, long term, be a money loser (I mean, I suppose it could be if you paid far more than you could ever, ever hope to get out of customers). Short term, sure.
I guess the main question is, when the FCC auctions off spectrum, what is the duration of the license? If it's more than 10 years, whoever buys it will likely be making money long after the current recession is over and forgotten. And, because we're in a recession right now, they may actually be getting the spectrum at a bargain price (particularly if reserve is not met, and they re-auction the license at a cheaper price, without the open access requirement [so that companies can turn the thumbscrews and make more cash]).
Don't get me wrong, I hope the reserve is met, and the open access requirement is there. But I'm not holding my breath.
I don't understand why any bids below the reserve would even be placed or accepted by the FCC. I'm not big on auctions, so maybe I'm missing something.
So open access rules now apply to this spectrum.
:-)
Happy Hacking
"it's reserve"
ARGH!!!!!!!!!
"It's" is a contraction for it is, retard.
Here's the link for status
http://wireless.fcc.gov/auctions/default.htm?job=auction_summary&id=73
Under Results click: View Auction Results (buttheads are using javascript for linking so no direct linking possible).
Please note it wants you to run some java. I clicked no and everything runs fine.
Victory shall be mine!
Lemme see. Reserve is 4.6B, bid is 4.3B. 6.5% difference, 300M. If I were buying a rusty old Duster for $600, this would be a difference of $40.
Obviously this is just gamesmanship.
deleting the extra space after periods so i can stay relevant, yeah.
The NY Times blog was just useless speculation from yesterday:
https://auctionbidding.fcc.gov/auction/home/announcementDetail.htm?ann_id=402
Announcement
1/31/2008 11:00:41 AM
C Block Reserve Price Met in Round 17
At the conclusion of Round 17, the provisionally
winning bids for the C Block licenses exceeded the
aggregate reserve price of $4,637,854,000 for the
block.
Move. Wherever you live sounds like a very badly sucking place. Move to europe, you'll like 99% of all inhabited areas having cell phone coverage. You might also like ever-expanding 3G availability. Actually, screw that. Move to Singapore or Taiwan. High-speed cell networks everywhere and 100 mbps ETTH. It's like a Googleplex made into a city. Except you gotta pay for food.
Even Verizon paid for the fiber itself, it still runs over (and under) public land and right-of-ways, giving the government a legitimate right to regulate how they can use it.
Why is it that the proponents of "one nation under God" are so eager to get rid of "liberty and justice for all"?
I think people forget that in the 90s, the Telcoms were pretty heavily subsidized so that they could, in fact, replace the fiber infrastructure. This is just a the first, probably biased, link I could find on the topic:
http://www.tispa.org/node/14
Since hitting the reserve price brings more clarity, wouldn't it be more accurate to say "the plot thins"?
I have seen the future, and it is inconvenient.
Where do you think the money that's paying for the fiber came from? I don't suppose it could be from the profits seen from the subsidized copper...
It may be a good service (and believe me, if it were available where I lived, I'd have it), but the money being used comes as a result of the initial copper wiring subsidy. Had they never had the copper subsidized, they could have never come up with the profits to build the fiber infrastructure.
How are sites slashdotted when nobody reads TFAs?
All the other telcom companies companies come under a massive DOS attack from the middle east / central asia and google wins at reserve price. :)
The fact that they get special permission, waivers & easements from the various municipalities to run that fiber through peoples' neighborhoods (including peoples' yards in some cases) is a subsidy in itself. If they were truly paying for everything, then they'd be writing checks to the people whose property they're tearing up to put that fiber in.
they can rent it out if they win it. as in beer. they could throw it open to all carriers using an open GSM platform using whatever flavor of G3 data they like so it's fully world-compatible.
there's an idea that should have "it's MY network, and all these guys behind me will beat you if you disagree" shivering.
yes, bring your BT, NTT, Korean phone over here with you. it will work. every time you hit send, two cents to Google for use of the C block airwaves. one cent if the home phoneco had built the network in that regional area.
profit per click. no investment in the backbone. that's something they know about.
it can work.
if this is supposed to be a new economy, how come they still want my old fashioned money?
The top 1% are those with incomes of more than half a million dollars a year. That's middle class to you, just because they're "wage earners"?.
... in other words, a wage earner. Are they middle class, just because they're "wage earners"?
Those executives with the multimillion dollar/year salaries? They're salary
I don't think so.
We won't see anything like the 1930's for a long time, because support structures are in place to soften impacts now.
... as it happens when certain indicators come in.
You can also know you are in a recession
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
You don't have to go rural to find affordable houses-- you could buy 2500 square feet of house on a large yard in Indianapolis (12th largest US city, I think) for something like $170k right now. Ours was pretty close to those stats when it sold last year, and it even had a pond large enough for weekend kayaking. It's hard to believe what people pay for houses elsewhere, now that I've moved to another state.
Hell, back in '01 when I was first house-shopping in indy, I could have bought an 11-bedroom/12-bath mansion that had been used as a bed-and-breakfast for a whopping $350k. At the time, I remember thinking "who would ever pay $350k for a house?"
WY-BEA175-E American Samoa is only at $3,600! Where's the bid button? I'm not exactly sure what I'd do with a license, but I know I want one!
Anybody out there got a copy on this television set?
Fiber has been subsidized. http://www.techdirt.com/articles/20060131/2021240.shtml
The bidder was well above the threshold. There is little reason why Google would bid above the threshold (unless they actually want to run a wireless network, which they presumably do not). So they probably will get the benefits of an open wireless infrastructure without all the management costs.
My guess is that the D Block is the real game here.... First off... it's tied to government subsidies in order to maintain the public safety portion. This is something that the big telecoms LOVE.
Second, the rules are that the FCC has an OPTION to reauction that block if it fails to meet its reserve. The PSST can also negotiate with the high bidder of portions of its own pieces of the spectrum.
So... why not get Google to run after the C block and then turn around and pull some back room deals to pull out the D block at bargain basement prices?
If the reserves aren't met then there's too much room for back room dealing to get this thing wrapped up.
My guess is that, at the end of the day... the D block is where the real action will play out.
The New York Times is reporting that the C-Block bidding is over at $4.7 billion. We won't know who won for several more weeks though. http://bits.blogs.nytimes.com/2008/01/31/spectrum-auction-the-c-block-bidding-is-over-at-47-billion/?ref=technology
Um, if nobody wants a big spectrum doohickey, I'll take it.
LID is that you?
Bullshit.
Copper wiring is inherently less reliable than fiber, which is part of why Verizon is migrating to fiber - to reduce long term maintenance cost. Old copper insulation cracks and lets in water, then when it rains you get crosstalk, grounding etc. They are still maintaining the copper as well as they ever did, and despite that it's still going to always be worse quality than fiber.
However, I havn't heard of a single person going with FIOS because of better quality (you'd be insane to upgrade to an expensive service if you were pissed of at the quality the company was giving you!). People go with FIOS because;
1) It's provides super-fast internet with dedicated bandwidth (vs shared bandwidth for cable)
2) It provides VERY competetive TV service (where available - still being rolled out)
3) It's new and cool! Fiber optic network into your house! (don't laugh - it does have the buzz factor)
Either Google isn't the winning bid (which would make sense given that the price went up once more after it passed $4.6 billion) or somehow that information isn't showing up in Google's stock price.
Within my house, which used to be out in the country surrounded by fields, there are no less than five new housing developments that sprung up in the last year
Unless those are Lego housing developments...
From what we think is going on down to the presumption of Google's gamble it's all guestimates at best. To keep the gambling fun going I'd wager Google was the recent bidder that took it past reserve and AT&T and Verizon are going to call their bluff letting them win it. Google may then have to try to maneavuear out of the deal through the FCC or work something out with AT&T or Verizon allowing one of those two to pick it up for less than if they fought over it through an auction. If I was the other two that's what I'd do since even if Google's not gambling and wants to actually use it, it's unlikely their entry into this uncharted territory for them would be all that successful initially. Bear in mind as good of a company and chock full of resources as Google may be, success in that market cannot be attained as easily as in their current niches (ex. web ad, apps, etc.) Their current niches appear to have the benefits of "working in a silo" when compared to the telco industries in general.
:)
Then again, maybe AT&T will win it and off-load all their illegal surveillance onto it running a clandestine parallel network... or Verizon will offer a new service call F-U-ios
That's just my POV... no more, no less.
How about simply having the right of way? I wouldn't be allowed to dig up pavement to lay my own private cables.
This makes them the least guilty telecom...which is a bit like being the smartest kid on the short bus.
So if $4.7B is the reserve, what's the significance of the $13,823,000?
A random number? A secret message indicating the bidder (they can't say during bidding, and no, 18323 is not a valid US zip code)? Google revenues while I was writing this message?
Any ideas?
If you think about how FiOS was rolled out, you'll quickly see that it is (quite clearly) built on a monopoly, and a product that would be nearly impossible to create from scratch.
Verizon is able to slowly replace the highest-use portions of their copper network with fiber during routine maintenance, etc. This reduces their operating costs on existing customers while creating a new product (FiOS) that can be offered to those customers.
The reason FiOS is affordable is because the whole thing is built upon a large, existing infrastructure, with ready clientèle, pre-negotiated rights-of-way all over the area, and a business plan that leverages the old monopoly to create a new product.
Sure, there wasn't a direct subsidy specifically for FiOS, but Verizon exists as it does because of government interference, and Verizon has all of the rights-of-way (and their entire business model) because of that legacy interference.
It's absurdist bullshit to claim FiOS could've been founded in 2002, by a company that wasn't in Verizon's position. It just never would've worked.
Technically, the NBER decide when/if a recession occurred, and it's generally well and truly after the fact. As an example, (from their explanation of business cycle timing):
"On July 16, 2003, the committee determined that a trough in economic activity occurred in November 2001." http://www.nber.org/cycles/recessions.html
My other sig is a
Actually, no. In most cases they're leasing pole and other right-of-way space from the power companies. The government rarely gave access or land to the telephone companies.
Poles are essentially always owned by the power company. Buried lines, not so much, but they also don't impinge on the use of the land they run under or along.