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FCC Ends 700 MHz Auction
Apu writes "Having received bids totaling $19.5 billion over 260 rounds of bidding, the FCC has announced the closing of Auction 73. The Chairman's statement notes that the auction has "raised more money than any [FCC] auction has ever raised" besting the 2006 Advanced Wireless Service-1 auction that raised $13.9 billion and topping the $10.6 billion Congress estimated it would receive for the 700 MHz spectrum. The New York Times reports that "the last bid in the auction was $91,000 for frequencies around Vieques, Puerto Rico." According to the FCC, "eight unsold licenses [...] remain held by the FCC and will again be made available [...] in a future auction." This includes the "D block" which was to be shared by commercial and public safety users and only received a single $472 million bid, below the $1.3 billion reserve price. However, as previously reported, the open access provisions will apply to one-third of the auctioned spectrum as the minimum $4.6 billion bid for the "C" block was received. The names of the winning bidders have not yet been made public."
The government has yet to release the names of the winning bidders, but it may do so in the next few weeks.
"may" do so? Did the New York Times misspell "must"? Or is it that there is a lack of clarity in the FCC's administrative law as to how long it can go before it makes public the detailed results of the auction?
Seastead this.
Given the spectrum is property of humanity as a whole I'll be looking forward to a check in the mail for my share. I mean, it's not like I could walk into someone's house and sell off their stuff without giving them the money...
"may" do so? Did the New York Times misspell "must"? Or is it that there is a lack of clarity in the FCC's administrative law as to how long it can go before it makes public the detailed results of the auction?
When the D Block gets resolved, the FCC will be allowed to reveal who won the other blocks.
Read the EFF's Fair Use FAQ
Is that in 2008 dollars? You people realize that every time some revenue or stock price goes up in the US, while the dollar drops at the same time, the businesses are really just treading water while the people pay for the country's debt with the value reduction of their assets?
Under the published rules, the names will not be released until after the D block is re-auctioned, which could take more then a few weeks to occur. However, it is commonly believed that the FCC will waived the re-auction in favor of a different plan for the D-block. Thus, the FCC *may* release the names in the next few weeks, or may wait upto a few months until the disposition of the D block.
The use of "may" most likely relates to the timeframe of the release of that information, rather than any necessity or obligation to do so at all. (eg. They "may" release the information in the next few weeks...if all paperwork is filed by that time, blah blah blah.)
Those who believe the Internet is private,
find their privates are on the Internet.
...to see how many of the bid winners manage not to default on their bids and actually deliver a working product.
And regarding the C-Block (?) for shared public/private usage, I am not surprised. As competitive as the telecomms are in wanting to keep their networks just to themselves, who would want to spend billions developing a nationwide network that would have to give free access to public service? Sure, it would be a boon to firefighters and police, but the telecomms don't seem to worry about good or bad PR.
Bearded Dragon
Give each state government the ability to divide up this block among at least two wireless Internet providers. The catch is that they must be able to mimick with wireless internet service, at a minimum the service coverage, in that state, of the cell phone network.
Doing that would automatically add two major competitors to the broadband market for most states, and it would make this band of spectrum more useful to the public.
But then again, the FCC was not created to serve the public, now was it? It was designed to allow "good corporate stewardship" of national wireless resources.
The summary misspelled "Puerto Rico".
Is it irrelevant? That $19 billions is going to come out of our pockets over several years and yet will be spent in 7 weeks.
The 3G auctions in Europe raised a fortune for exchequers but the huge burden the placed on operators has crippled 3G roll-out for the best part of a decade.
Is it wrong to question how the money raised is spent?
With the erasure of the analog spectrum, a whole range of learned skills will be forgotten, a whole range of home projects will vanish. Once the television spectrum is done, then comes Radio. As a kid, I made my own home AM radios, an incredibly useful tool for the budding EE's in the world. the loss of such profound examples will cut off the joy of home electronic projects to another generation.
Karma Whoring for Fun and Profit.
$19.5 billion, Sounds like such a small number these days... What is that, a few weeks in Iraq? Or, 1/10 the amount it cost to bail out Bear Sterns?
Clever. The upside of auctioning bandwidth is that the FCC increased the GDP by 19 billion dollars without producing anything! Such entrepreneurship, eh?
"Because I just won $50 on a lottery ticket!"
SJW: Someone who has run out of real oppression, and has to fake it.
The government (i.e. the taxpayers) put up $30 billion to bail out Bear Stearns and allow JP Morgan to start buying them out. The $19.5 billion is then 2/3 of the price of the bail out.
Granted, moral hazard has all but been abandoned by the supposed experts at the Fed but hey, it's not their money they're using. Besides, couldn't let their buddies have to suffer the slings and arrows of the free market, now could we?
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
> "raised more money than any [FCC] auction has ever raised"
Great, but in the end, the buyer dumps the cost onto the public, who end up paying for it.
when do they tell us that verizon now owns it?
This is a joke. I am joking. Joke joke joke.
19.5 billion is about a week and a half in Iraq, using the $12billion a week figure I've heard bandied, or using generous estimates, a WGA strike lasting a year and a half (with a loss figure of $2.1billion over nine weeks extrapolating out to about 19.5 billion over the course of ~80 weeks).
Instead of rights to electromagnetic spectrum, box contained bobcat. Would not buy again.
Slashdot Burying Stories About Slashdot Media Owned
I'm planning to use that part of the frequency spectrum to broadcast round the clock demo tapes from '80s cover bands, the piano works of Conlon Nancarrow and the speeches of Everett Dirksen.
And if you're wondering, yes, I've got the idea protected legally, so don't try to beat me out of the gate.
You are welcome on my lawn.
Not really, but he could have massaged the conversation in the direction of spending of the money before complaining about it. What everyone wants to know here is if Google won or not.
which is totally what she said
I just looked up the figures from a few years (I think it was 2000) past when UMTS (Mobile Broadband, forget what it's called in the states) frequencies where on auctioned here in Northern Europe:
Germany netted a total of 111 billion euros.
Great Brittain 85 billion.
The Netherlands 5.9 billion.
---
"The chances of a demonic possession spreading are remote -- relax."
While I'm glad the spectrum will be going back into private hands, I'm sad that the FCC is gaining so much revenue from something they never should have owned in the first place. Leave it to government agencies to take what's not theirs and sell it back to the public for profit. They will surely use this money to expand the reach of their draconian censorship rules.
Here's hoping that private companies will be able to use better use of the spectrum than what we've previously seen.
...is that the Federal Government just instituted another tax (a $19 Billion tax) - that I must pay - in order to use the supposed 'public' airways. Used for some telecomm service - there'll be an additional tax on top of that. ....And we wonder why our wireless phone bills are so high.
Those brown things, with straps on the sides? Maybe what you really want is for someone to CHANGE YOUR SHORTS
/.
Yours,
I agree, this was bad sentence structure, but "may" in this case means "will be allowed to".
--Rob
Towards the Singularity.
gonna be a ton of old broadcast equipment laying around. Anyone find a use?
"God fights on the side with the best artillery." - Napoleon, Marshal of France - speaking truth to power
All the economists I've heard talk about it (about 4 different ones between All Things Considered and Marketplace) have said that the risk to the market of a failing major investment bank is worse than the risk of moral hazard, in this case. And you can't say that the owners of Bear Stearns haven't suffered. The stock went from $95 to $2.
I do agree with you that, generally speaking, bail-outs suck.
-l
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Now that you've broken the anti-collusion rule, hopefully we'll be saved from your wrath...
While I won't say that the Fed and the SEC have handled this whole situation well, I don't see this particular situation as having ANY good outcome. A run had actually started on Bear Stearns, and it was going to collapse totally within a couple of days. So their creditors would need to write off those debts. And since those debts are often held as collateral by other organizations, that puts them at risk too.
And before going all populist with the "Good - serves them right" bit, remember that as it spreads, it starts affecting institutions closer to home - pension funds, mutual funds (got a 401k?), local depositor banks, etc. And the Federal Gov't has a legal obligation to bail some of them out.
It's all ugly, but gone are the days of the proletariat vs. the capitalists - if you have a 401k, own any stock, have deposits in a bank, have a pension, you ARE a capitalist.
"As God is my witness, I thought turkeys could fly." A. Carlson
How do you figure? Are you suggesting that 3G roll-out has been quicker in other countries where the governemnt gave away valuable rights to private companies for free instead of selling them?
Whatever an operator payed for a license is sunk cost. The subsequent roll-out will be at whatever pace is economically feasible and will not be affected by the amount payed for the license.
Uh... more like roughly Bear Sterns market value last year.
What's going to happen to it all? My votes on disappearing into various executive pockets
Am I the only one that has a fundamental problem with the fact that the FCC is even allowed to do this? Admittedly, I don't understand the ins and outs of the entire spectrum business, but how does a federal agency have the right to charge anyone anything for use of the airwaves? The cost of this is going to go right back to the users of the spectrum, not the company. And what does the FCC do with the 19 Billion dollars they raised?
I have a hard time believing that US citizens come out better for this, in any way shape or form. And isn't that what the government is supposed to be all about? Provide a service to the people?
And you can't say that the owners of Bear Stearns haven't suffered. The stock went from $95 to $2.
Yeah, and I heard that those running it will have decided to skip getting bonuses this year. Big whoop.
Huh? It's generally acknowledged that the CPI OVER-estimates inflation, and has done so for years I don't need a Wiki article to tell me what I ACTUALLY experience every day. Inflation is out of control in the US:
Energy UP UP UP
Wheat, Corn, Milk... UP UP UP
Housing (still) UP UP UP
Hell, just look at the dollar vs. Euro, Yen, Aus, CDN, etc... Everything we import is UP UP UP.
2-3% my a$$.
I've heard a lot of economists and "experts" (and the IMF - who are neither ;) ) say a very different thing during the Asian financial crisis in 1997. Especially the western ones.
They were saying "no bailouts".
I figure they wanted stuff to go bust so they could buy it all up cheap and thus gain more power and wealth.
Hypocracy - the rule or power through hypocrisy.
If the funding for a Sunk Cost comes from borrowing then of course it affects future business decisions. European networks paid $129 billion for 3G licenses. Vodafone alone spent more than $30 billion. It seems unlikely that sort of money came from cash surpluses.
In Japan, 3G licenses were free. Looking at the state of the mobile market there, and comparing it with that in Europe, then yes, I'd say that huge cost delayed roll out and by increasing user costs slowed uptake.
Sorry, but no. Whatever investments a company chooses to make in 3G roll-out is only based on what they can expect each investment to return. Are you suggesting that an investment with an expected ROI of x% will be made if the debt is below $y, but will not be made if it is above $y?
Also, why compare to Japan? Compare to Sweden, where the Social Democrats gave the licenses away. It turned out that making massive investments in infrastructure in areas where only few people lived did not make any economic sense even when the operators had not paid for the licenses. Strange that, huh?
The mobile market in Japan is much more mature, hence all the "texting like a Japanese teenager" references here and elsewhere.
JP Morgan says they only intend to tap about $20B of the $30B limit, the discrepancy is just in case something is wrong with the current books.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
But there is a return even by not deploying a network - other startups can't rollout a competing network.
Why not compare to the original GSM licenses in the UK for Vodafone and Telecom Securicor Cellular Radio? They had coverage obligations. Those coverage obligations were absent from the 3G auctions because with no obligations, carriers would bid more for the license to prevent others gaining a license, and then deploy at a slower pace as funds allowed.
I don't think a great deal of thought was paid to the amounts being bid at auction time, and hence thepost auction impact.
Sweden has 1/10 the population density of the UK, so rollout in the UK should have been more cost efficient by an order of magnitude.
Yes, I too have heard the same tripe sounded about why Bear Stearns could not fail and why they had to be bailed out (even if they are being bought out). The problem is, as we have now seen, someone would have stepped in to buy them and their assets anyway, so the government shoveling more money down the drain wouldn't have mattered.
Yes, there would have been some consternation in the markets as the apoplectic seizures hit the street but that is what the free market is all about. Bear Stearns, and others, thought it was great when they were leveraging their holdings ten, twenty or even thirty times over. It was all parties and bonuses so long as their excessive risk paid off.
However, when the dangers of their risk became real, rather than do the right thing and unwind their positions, even at a loss, they held onto their leveraged positions, hoping upon hope that the next trade would work out (sound familiar?).
Bear tried to beat the market and ignored sound investment principles. They played with fire and they got burned. That's life. It does not matter that those who have/had their investments with Bear have money to burn (compared to the rest of us); this is not a schadenfreude moment. This is about not gaming system for the benefit of a few.
Sure, those who hold Bears stock got hammered, but so have millions of others who held stock in now defunct companies. Where are the tears for them? How about the employees of Enron who lost, in some cases, their entire retirement savings when Lay and others manipulated markets and cooked the books. Don't they deserve to be bailed out?
Either we are going to let the markets operate as they should, which means accepting wild gyrations up AND down, and only have intervention as an absolute last resort, or we abandon free market principles entirely and admit that the government will manipulate market conditions as best it can to promote upward swings while lessening or preventing downward falls. This notion that somehow there needs to be an orderly market is a fallacy. Markets, true markets, are not orderly. They are run on fact and rumor. The irrational investor and all that.
I couldn't believe it when I heard it, but of all the hacks out there pontificating on this bail out, Larry Kudlow actually said on live tv that the bail out of Bear Stearns was not right. Of course he then went on to say how the Fed needs to do more, but that's another subject. He also said that as of late, the Fed has injected $850 million into the markets, trying to make adjustments. Nearly a trillion taxpayer dollars, in the form of future debt payments, have been poured into the markets to prop up those who took on too much risk and as a direct result, any attempt at saving by the average American has been crushed.
In short, the Fed is doing everything in its power to see to it that saving is not an option. After all, if you're not earning enough interest on your accounts to beat inflation, why save it? Just spend, spend, spend. Forget about debt, it doesn't matter. Buy those Chinese made goods. Don't save for a rainy day. Exactly the same mindset that got us into this mess.
The markets need to do what the markets will do. This nanny-state interfering is only serving to prolong this recession and making things worse.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
And miss the opportunity to Rick-roll everyone in the country simultaneously?
Shame on you - your Internet citizenship is hereby revoked. Please de-solder your network interface and throw it into the nearest Emergency Intel® Incinerator.
Nobody else has this sig.
Banks can do whatever they want. If they wanted savers, they could easily offer better interest rates, despite the Fed rates. However, that comes out of their pocket book (read: profits) and so they don't.
:)
My credit union has 6.01 APY checking right now. We take advantage of that. Why don't the other banks offer a similar service? Because they make so much more money from piles of consumer debt.
I do want the "government [to] manipulate market conditions as best it can to promote upward swings while lessening or preventing downward falls", because I don't want to return to the boom/bust cycles of the first 150 years of this country. Frankly, I think monetary policy has done fairly well, even in the crappy times (stagflation).
As far as Bear Stearns, I am not an expert and I have to rely on officials to make those sorts of decisions. I can only imagine that the number of people affected by the loss would be far greater than Enron, which is why they decided to do it. Frankly, I don't have a direct line to Bernanke, but if you do, feel free to email me.
Cheers,
-l
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BEAR STEARNS IS NOT A BAILOUT. That is, the Government isn't handing $30 billion to either Bear Stearns or JP Morgan. This effort has not cost taxpayers anything so far.
The $30 billion involved in the JP Morgan buy-out of Bear Stearns is NOT a bail-out - it is a non-resource loan (think: loan guarantee) provided by the Federal Reserve system to JP Morgan, in order to induce JP Morgan to take over Bear Stearns, by limiting the downside risks to the Bear Stearns assets that JPM is buying. The Federal Reserve is loaning $30 billion in non-recourse debt against certain Bear Stearns assets, so that if the underlying debtor-counterparty (i.e. homeowner with mortgage) doesn't pay, then the Fed will be left holding that shortfall. This makes it less risky for JP Morgan to buy Bear Stearns.
Now, loan guarantees and non-recourse debt happen everyday in the normal course of business between private parties, and they are not free. It is insurance, and it costs money. The guarantor is accepting risk. So, one could say that there has been SOME bailout, in that there is value to the Federal Reserve's loan to JP Morgan, and I've seen nothing that indicates what JP Morgan actually PAID for that loan in addition to pledging collateral. There might very well have been amounts paid to the Fed in exchange for the loan. Scenario: JPM/BS pledged $40 billion of assets in exchange for a $30 billion loan, and paid for it in the structuring.
Bear Stearns' shareholders have lost about $100 billion in nominal enterprise value over the last year or so, so there isn't a bailout of those investors.
Another relevant point: the Federal Reserve system is not a true U.S. governmental entity, so I'm not sure whether the $30 billion would be a true bailout in any event.
Summary: JP Morgan bought Bear Stearns in a private takeover, and the Federal Reserve system guaranteed the performance of $30 billion in notional debt. This will actually only cost the Federal Reserve the amount that mortgagors (homeowners) don't pay on their mortgage, less recoveries thru foreclosure and similar. Actual cost, if any, will be much smaller - 5-10% (?) of the $30bn.
You forget they're selling a resource they paid nothing to create. That's $19.5 billion pure profit*!!!
(* Calculation of profit does not include costs of discovering, monitoring, administrating, or policing the electromagnetic spectrum.)
Reduce, reuse, cycle
Hey Dudes, Slashdot lost my subject.
It was: Bear Stearns shareholders did not get "Bailed Out"
And ahen I used "preview" it got removed.
Reduce, reuse, cycle
Why does the government sell the spectrum, rather than lease it? Why aren't these frequencies an annuity for the public, rather than a profitable secondary market for private interests? I feel ripped off, no matter what the sale price.
Why is the USA auctioning away frequencies in Puerto Rico? Do they not own these themselves?
Sorry, you clearly do not know of what you speak. You spout a lot of cliches and financial sounding words, but together it makes no sense.
Bear Stearns couldn't unload its loans (this is what the gov bought for £30 billion), because nobody would buy them, since they are dodgey and have a high risk of defaulting.
The way the market is supposed to work does not include huge crashes - this helps no-one. They are to be avoided, and it is accepted that governments will try to avoid crashes. This is not market moving down, nobody has a problem with that. A crash is very different, it is a sign that investors have lost all confidence in the market - you seem to think this is normal and a good thing, it is not!
In other words, supply and demand worked exactly as it should. A perfect example of the free market in action.
The way the market is supposed to work does not include huge crashes - this helps no-one.
Who says markets aren't supposed to work this way? Did someone code into the market forces a routine which specifically says, "There shall not be crashes"? No. Don't be like many others out there who try to anthropomorphise the movement of the market. Just because something is supposed to do something one way does not mean it will always do what you think it should do.
A crash is very different, it is a sign that investors have lost all confidence in the market - you seem to think this is normal and a good thing, it is not!
Yes, it is a good thing. Losing confidence in the market is a classic example of ringing out the excesses over an overextended market. This is the way markets are supposed to work. Do you think people shouldn't sell their shares in a company if that company continues to lose money?
Think of it like the huge forest fires that happened 15 or so years ago out west. No one likes to see tens of thousands of acres of forest go up in smoke, accompanied by the loss of life and property. But it happens. Now go back to those places and look at the new growth and how vibrant those places are. The same thing is now happening, and should be allowed to happen, in the markets. Clearing out the cruft, ringing out excesses, destroying billions of dollars in wealth is, in the long run, a good thing for the markets.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
And then the government let them get away with not building at the pace they promised. I'm not sure why that happened, but I assume that most of the leverage was gone, by then. Also, the government at the time were economically illiterate morons. I'm sure that helped in making the incorrect decision.