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Wireless Auction Ends With Mixed Feelings
Macworld is reporting that the conclusion of the wireless auction has ended with many participants having mixed feelings. While bigger companies hailed it as a success, including Google who didn't actually bid to win but was able to get open access rules introduced, many smaller companies were left feeling that they were doomed from the start. "A former mail carrier, McBride has been trying his luck at FCC auctions since 1996. He said new rules for the auction favored large companies with deep pockets. For example, the FCC shortened the amount of time that the winners would have to build their networks. "All that did was prevent small businesses from coming in. They were scared of the build-out requirements," he said."
I remember the US Army contract index had this little requirement for some filing cabinets to have "three letter names in the (can't recall) font" which of course limited the contracts to just IBM... until Commodore renamed itself Commodore Business Machines (CBM) and Digital became DEC.
Karma Whoring for Fun and Profit.
In the old fable, the tortoise won the race because it was slow but steady. The hare lost because although it was fast, it was also prone to take breaks.
In today's world, the hare is motorized and is about 1000 time larger than the tortoise.
If you're going to bet on one of them, bet on the hare. The FCC isn't stupid, they know who is going to do productive things with the airwaves
I didn't win but I wanted open access. Why isn't everyone who didn't win but wanted open access a hero?
Auctions favour those with more money at hand!
News at 11.
>A former mail carrier, McBride has been trying his luck at FCC auctions since 1996.
Darl, is that you?Some mornings it's hardly worth chewing through the restraints to get out of bed.
So what if this small guy couldn't compete like he wanted to? This bandwidth and the rules associated are for the public good. Should he get some special treatment because he doesn't have super deep pockets? How is that good for me? I mean, doesn't that just mean I have to wait longer for technology that will do me good and that successful rollout is at a higher risk since who knows if this small company can survive the implementation financially?
Who would want a small company to win a part of the spectrum? By definition, they wouldn't be able to use it universally for all Americans. If some New York only company bought it and never spread across the country or took 10 years to expand that large, the entire rest of the country wouldn't be able to use it immediately. But nationwide cellphone companies can implement it immediately to increase quality and number of available connections to a single tower for just about everyone everywhere. That's even important for when cell towers fail from too much traffic when everyone gets on their cell after an emergency like a natural disaster. That's way better than some company nobody's heard of making 10,000 wireless routers and tunrning great profits but effectively only being able to offer their product to 0.001% of America because of their limited size. That's like being a small patent troll company and sitting on some wonderful technology and not letting anyone else use it. Too bad cell companies are evil, greedy bastards.
Google's Super Secret Search Algorithm: SELECT @search_results FROM internet WHERE @search_results = 'good'
Maybe my definition of 'auction' is wrong, but I thought that all auctions favored deep pockets, regardless of attached rules.
Can a former mail carrier really bring the $ to the table to beat Verizon?
See, "they" (Big Communications) were rather afraid of what Google might do with it. It would mean a LOT of changes to them, not to mention unpredictable competition.
But now that these spectrum have been sold to them, might they then be inclined to simply NOT use it? After all, they are not going to be able to use it in a way they want to. And they have succeeded in preventing their worst fears from coming to light. It would be rather typical of them to sit on their hands and do nothing now that they've got what they want. They don't have to make changes or improvements to continue growing and making money. All they have to do is what they've always done.
I'd be a little surprised if they didn't find a way around the "open access" rules or used the spectrum they paid for.
Wireless Auction Ends With Mixed Feelings
... and I still hate the Telcos.
Let's see now. I kinda like Google better since they got those open-access rules in
Yep, mixed it is.
The higher the technology, the sharper that two-edged sword.
Small or large is missing the point. The point as I see it is that the same telecoms that own the pipes now own the waves. If you want to extricate yourself from a relationship with them, who are you going to turn to? Am I going to have to move to the PacNorth and set up a Clearwire account? Weak sauce.
Like anything in the US, it's fixed to serve the rich, what else is new?
In 95-96, the FCC bid out a bunch of frequencies, and there were special Congressional mandates to allow "small businesses" to compete - mainly, very little deposit. Nextwave bought up a whole lot of licenses, and other companies did as well. Then the market took a downturn, and the value of the licenses dropped, and a lot of the participants declared bankruptcy. In Nextwave's case, the FCC "repossessed" the licenses for non-payment, but it was reversed by the court, and Nextwave was given relief. Then the business cycle turned again, and the licenses were worth 3x as much as Nextwave paid for them. The speculation was that they were going to sell them off for an insane profit. The word around the communications industry was they were really just a shell company and never intended to build, just to sell them off later. It looks like they kept the frequencies and are rolling out WiMax on it - *10 YEARS* after the frequencies were auctioned.
The construction provisions are there to make sure that the spectrum actually gets used and not held as an investment. In addition, most S/W/DBE's that get involved in government doings are a fraud: 50.5% of the company is "owned" by a woman, who just happens to be the wife of the CEO and owner of the other 49.5%. Or construction "general contractors" who hire's a "prime subcontractors" - i.e the real general contractor - to do 100% of the scope. Their price to the government? The price that the GC bid plus 1%. So on a $10,000,000 Baltimore City school job, some guy sitting in an office made $100,000, never set foot on site, and never dealt with the city or the other subcontractors.
There is a Nextwave in existence now, but if the WiMax service they are
"As God is my witness, I thought turkeys could fly." A. Carlson
Many of my relationships end with mixed feelings as well!
(-1, Raw and Uncut is the only way to read)
First, let me point out that it appears you accidentally submitted before you had finished the full text of your post. It just kind of ends mid-sentence.
Anyhow, I've wondered, are spectrum auctions time-limited, or for posterity? If I were the government, I'd only auction spectrum for like 10 (well, maybe 15, because forcing companies to be in a situation where they must build a network, recover the costs, and make a profit in only 10 years might be a bit too short of a time) years at a time, then recover the spectrum rights after that time to either re-auction, or potentially do something else with.
I doubt my idea will ever be heard by anyone in power, or if it were, taken seriously but. . . wireless spectrum is kind of a public resource. Because, of course, bandwidth is relatively limited, there does need to be some sort of regulation of the spectrum, and generally, I think the FCC has done a pretty good job of that. But, these spectrum auctions bother me somewhat. They basically come down to an agreement between the arbiter of monopoly power (the Government/FCC) and private parties to charge the public the maximum amount of money possible to use the spectrum, which is, as I mentioned, a public resource - the government has no 'inherent' claim to it, only the claim that they assert by power (police/military - the power to bust down your door, seize equipment, and throw people in jail).
Because, a highest-bidder auction guarantees that whoever bids the most will have to charge the most to customers in order to cover their 'costs'. In any other area of business, US law forbids monopolies from price gouging. But in wireless communications, the government grants a monopoly to whatever organization wins the bid.
I think the FCC, in future auctions, should try to use a different model for bidding: service price bidding. That is, you award the auction to whatever company agrees to the lowest price to customers for the services provided on that spectrum. Admittedly, this is a *much* more difficult way to run an auction, because it could be hard to figure out exact price equivalencies for different types of services. Maybe you define a standard of like a khz/second, similar to how electricity is rated, which would ignore the specific service being offered on a segment of spectrum, and instead defines the price charged to end users based on how much bandwidth is used by their communications per second of time. I suppose even that could be difficult because some companies might offer un-metered services, like the all-you-can talk for $100/mo plans that Cell-carriers are currently rolling out (even that, though, I think could still be broken down to a khz/second price, based on the average number of minutes per month that the carriers expect users to actually be talking - and which could later be compared against actual usage data across the entire pool of users).
I don't know for sure what the answer is, but the idea of a highest-bidder auction for spectrum just doesn't sit well with me as a citizen and tax payer. I just think it's corrupt, and doesn't serve the public as well as it should, because it simply drives prices up. Sure, the government gets additional revenue, which theoretically could be used for the public good. But yeah, I've seen how well my government usually spends my money. I doubt we'll see any tax rate reductions from this revenue (compared to the Federal Budget, I think the money brought in by the auction is fairly puny, anyhow), so the money will probably just be spent on pork-barrel projects for well-connected companies with friends in Congress and the Executive Branch, anyhow).