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FCC Puts 4.6 Billion Minimum Bid on Spectrum Auction

Zonk posted more than 7 years ago | from the you've-got-to-be-serious-about-this dept.

Google 165

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.'"

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Porn industry (1, Funny)

Anonymous Coward | more than 7 years ago | (#20307697)

The porn industry should totally buy that spectrum, and have on-demand porn serving. You know you want it.

Yu0 = teh suck (-1, Troll)

Anonymous Coward | more than 7 years ago | (#20308135)

Lol!

(I have just wasted at least one modpoint, W00t!)

Re:Porn industry (1)

smurphmeister (1132881) | more than 7 years ago | (#20309143)

Trying to put porn on the C-block portion of the spectrum would be a total waste! Every time you'd try to look at a naked picture of hot chick, her fat friend would pop up and tell her it's time to go home, either that or the picture would pop up on your buddy's computer instead...

Not really shutting out smaller competitors (4, Insightful)

Anonymous Coward | more than 7 years ago | (#20307705)

I.e., if you wouldn't have the money to bid up and up, then you wouldn't be in the same competition anyway.

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 ./ these days

Re:Not really shutting out smaller competitors (1)

tepples (727027) | more than 7 years ago | (#20307731)

Although, to be fair, it might force the bidding war to be shorter
Isn't the duration of the bidding war set when the auction begins? Or does fccBay operate under significantly different rules from eBay?

Re:Not really shutting out smaller competitors (4, Funny)

niceone (992278) | more than 7 years ago | (#20307851)

does fccBay operate under significantly different rules from eBay?

Some things are a bit different. Like they don't display the % of positive/negative feedback, or they'd never manage to sell anything :)

Small hispanic colony in US. (-1, Troll)

Anonymous Coward | more than 7 years ago | (#20308177)

Si no hay sitio libre para los canales públicos de radiofrecuencia entonces usaremos canales aleatorios con diferentes watios de potencia de emisión.

Oye, soy laico y ateo en estas tierras rojas. Nunca me has comprado el agua y el aire.

Re:Not really shutting out smaller competitors (1)

compro01 (777531) | more than 7 years ago | (#20308427)

Isn't the duration of the bidding war set when the auction begins?

i'm pretty sure it acts like a regular auction, where the bidding keeps going unless everyone but one bidder gives up.

Re:Not really shutting out smaller competitors (4, Informative)

jratcliffe (208809) | more than 7 years ago | (#20308591)

Nope, it's not like eBay - the bidding goes on until nobody wants to increase their bid. The bids go in rounds - one round per day, to begin with. If nobody bids on a particular license in (I believe) two consecutive rounds, then bidding on that license is complete. Once things get very close to being done, and only a few licenses are still outstanding (i.e. up in the air), the FCC can accelerate the process to 2 or 3 rounds per day, to bring the entire process to a close.

Re:Not really shutting out smaller competitors (2, Funny)

MightyMartian (840721) | more than 7 years ago | (#20309087)

I think we should alter government bidding to blood sports. Choose your weapon, and the last man standing wins the bid. Wouldn't it be great to have Larry Page skewered by a pike, with Randal Stephenson standing there, bloodied, ear missing, eye gouged and knee torn to shreds, but victorious.

Re:Not really shutting out smaller competitors (2, Insightful)

Stormx2 (1003260) | more than 7 years ago | (#20308695)

Well, this is a political issue. From my understanding, the government is selling rights to use certain frequencies of electromagnetic waves - a hugely important part of physics and the universe we live in. A bunch of people object to this, that the US government has some kind of automatic ownership of anything that can generate a profit unless it sells it.

The jist is that a physics fundamental isn't something we can buy and sell.

Do correct me if I'm wrong :)

Re:Not really shutting out smaller competitors (2, Insightful)

Embedded2004 (789698) | more than 7 years ago | (#20308903)

Yeah, land is just a physical matter to think the US government wants to buy and sell land. pfft.

The jist is that a physics fundamental isn't something we can buy and sell.

Re:Not really shutting out smaller competitors (1)

Stormx2 (1003260) | more than 7 years ago | (#20309525)

You hit the nail right on the head there, actually. We're working in the present day here, and if the U.S.A. were to start up a new colony and start selling off the land (N.B. this hasn't happened in Iraq - it is an occupation, the US government doesn't own the land) it would be illegal (and a war crime, I think). So your example rings entirely true, but perhaps not in the way you wanted.

Re:Not really shutting out smaller competitors (1, Troll)

Control Group (105494) | more than 7 years ago | (#20309443)

If you have an alternative method for allocating spectrum, I'm sure everyone would be interested in hearing it.

(Note: a method which does not involve a central regulatory body is, in fact, a method based upon "he with the most broadcast power owns the spectrum")

Re:Not really shutting out smaller competitors (1)

ucla74 (1093323) | more than 7 years ago | (#20309561)

Okay, you're wrong.

And here's why: The US Government has the authority, vested to it by the people, to regulate interstate commerce. One portion of interstate commerce in the United States are segments of the electromagnetic spectrum.

Because completely unregulating those portions of the spectrum would lead to a serious--and probably economically crippling--degradation of interstate commerce, the US Government--again, acting as the agent of the citizenry, through the Constitution--exercises stewardship over the relevant (to this discussion) portions of the electromagnetic spectrum within the United States . That emphasized portion is the part that many seem unable to comprehend.

Need to take them to court. Airwave freedom (1)

zymano (581466) | more than 7 years ago | (#20309597)

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.

Re:Need to take them to court. Airwave freedom (4, Insightful)

CodeBuster (516420) | more than 7 years ago | (#20309945)

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.

Re:Not really shutting out smaller competitors (0)

Anonymous Coward | more than 7 years ago | (#20309827)

So much political agenda on ./ these days
It's really your concern if there is a lot of political agenda in your working directory. Hopefully it's your own?

Man, if I could get like $10 of that (-1, Offtopic)

Anonymous Coward | more than 7 years ago | (#20307727)

surely, I could afford to replace Cory Doctorow's stupid, stupid haircut.

Great (2, Insightful)

j.sanchez1 (1030764) | more than 7 years ago | (#20307761)

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.

Re:Great (2, Insightful)

Anonymous Coward | more than 7 years ago | (#20307829)

If Google puts its money where its PR Department is, then either it'll win the auction, or someone will outbid them at a higher-than-reserve price, since the FCC set the reserve price to the amount Google had suggested it would pay for the spectrum.

Does "starting price" == "reserve" here? (2, Insightful)

Kadin2048 (468275) | more than 7 years ago | (#20307883)

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?

Re:Does "starting price" == "reserve" here? (1)

G Fab (1142219) | more than 7 years ago | (#20307987)

No. No need to compare this with ebay.

The FCC will sell this to the highest bidder period. There is nothing to gain by not selling it. They will rerun the auction and you can buy it for ten bucks if that's the high bid.

But I think it's going to sell at above 4.6.

Re:Does "starting price" == "reserve" here? (1)

Surt (22457) | more than 7 years ago | (#20308007)

No, a bid of 4.6B, if the only bid offered, will be accepted. It is the starting and reserve price for the auction.
The FCC did half of what google wanted (and not really the important half).

Re:Does "starting price" == "reserve" here? (0)

Anonymous Coward | more than 7 years ago | (#20309211)

In other words, there is no reserve.

Re:Great (1, Interesting)

dattaway (3088) | more than 7 years ago | (#20307901)

Considering the head of the FCC is a former AT&T lobbying professional, AT&T wrote it for them at no charge!

Re:Great (0)

Anonymous Coward | more than 7 years ago | (#20307967)

For some reason, when he retires from Washington, I don't think he's planing to work for Google. These guys make a fortune when they retire working for the same people they regulated.

Re:Great (1)

tknd (979052) | more than 7 years ago | (#20307969)

Cash and Short Term Investments: 11,935.92 million as of 2007-03-31. Source. [google.com]

Take one for the team Google!

Re:Great (2, Informative)

tomblag (1060876) | more than 7 years ago | (#20307983)

Ars has much better info and commentary on the auction. Basically tho, Att can try to outbid google, however, there are requirements that the auction winner has to abide or they lose the spectrum.

http://arstechnica.com/news.ars/post/20070815-700m hz-auction-whats-really-up-for-grabs-and-why-it-wo nt-be-monopolized.html/ [arstechnica.com]

Simple Question (2, Informative)

COMON$ (806135) | more than 7 years ago | (#20308321)

Regarding open spectrum. I don't deal with wireless tech that much so this may just be a stupid question. I understand the need to regulate natural resources to avoid collisions. But in all seriousness why does the FCC get to "sell" something they do not really own? Just a few months ago the community was all up in arms about DNA being copyrighted. What is the difference here? The FCC will not regulate the 700MHz spectrum afterwards, they will not do anything with it once it is sold so why the asking price?

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?

What they are selling (1)

geekoid (135745) | more than 7 years ago | (#20308515)

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.

Re:What they are selling (1)

COMON$ (806135) | more than 7 years ago | (#20308685)

who do less knee jerking and make an effort to use there heads all ready knew this.

Evidentally that would not include you.

What I am asking, if you would please remove your knee, is what is the company getting out of this either way the spectrum will be free to use for any application and anyone to use, why dont they just open it up?

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.

So I ask again, why is the FTC selling this when the two stipulations on the band require that it be open access?

Re:What they are selling (1)

COMON$ (806135) | more than 7 years ago | (#20308745)

Sorry, Read FCC not FTC.

Re:What they are selling (4, Insightful)

fyngyrz (762201) | more than 7 years ago | (#20309359)

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.

Re:Simple Question (1)

necro81 (917438) | more than 7 years ago | (#20309861)

It is true, in a sense, that the FCC does not "own" the spectrum. According to law, the airwaves belong to the people. In order to use the airwaves, companies must negotiate the right to use a portion of the radio spectrum. But, rather than go door-to-door and ask every citizen if it is OK to use the airwaves, companies negotiate with the citizens' representative - the government. And, because access to the radio spectrum has value, the FCC doesn't just give the spectrum away, but rather tries to fetch the best price for it on behalf of the citizens. It is much like an oil and gas company paying the government for the rights to drill on public lands.

As simple as... (1)

JamJam (785046) | more than 7 years ago | (#20307785)

A B (block) C

n00bs (5, Funny)

Experiment 626 (698257) | more than 7 years ago | (#20307795)

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.

Re:n00bs (1)

QuietLagoon (813062) | more than 7 years ago | (#20307965)

Why are they setting a minimum bid?

They are not setting a minimum bid. TFA says reserve bid. The submitter misquoted the article.

Re:n00bs (1)

KZigurs (638781) | more than 7 years ago | (#20309301)

they are going for the second chance offer scam ;)

Shut out smaller possible competitors ? (0)

nurb432 (527695) | more than 7 years ago | (#20307803)

Really? Who would have ever imagined?

Minimum of $10 billion is not totally accurate (1, Funny)

Anonymous Coward | more than 7 years ago | (#20307805)

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.

Will Google take a principled stand? (0)

Anonymous Coward | more than 7 years ago | (#20307819)

Or, as with China, will they once again sacrifice their "principles" for the sake of convenience?

Bad Move (5, Interesting)

JaredOfEuropa (526365) | more than 7 years ago | (#20307857)

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.

Translation (3, Insightful)

Anonymous Coward | more than 7 years ago | (#20308053)

Regulation and selling of otherwise "free" bandwith is little more then another hidden tax.

Re:Bad Move (5, Interesting)

Yer Mum (570034) | more than 7 years ago | (#20308197)

The same also happened in the UK.

In European countries where they held a 'beauty contest' (operators bid less money but also had to promise to roll out services and coverage) the result was decent services from the start at cheap price for the end consumer. E.g. Norway.

Re:Bad Move (1)

brarrr (99867) | more than 7 years ago | (#20308623)

Hey man, GPRS is 3G here in the US! What is this silly talk about it being stone-age and that there's something new. Silly foreigners.

Re:Bad Move (1, Insightful)

Anonymous Coward | more than 7 years ago | (#20308627)

Placing blame on the auction rather than the bidders seems odd. If they want a reasonable return, that's incentive for them not to overbid.

Re:Bad Move (1)

Colin Smith (2679) | more than 7 years ago | (#20308735)

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.
WTF? Oh the poor, poor telecoms companies...

They didn't have to bid that high, the only compulsion was their own. They could all have bid £0.01, but they didn't, they chose instead to add many many zeros.

 

Re:Bad Move (1)

CodeBuster (516420) | more than 7 years ago | (#20309085)

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.

On the contrary, we are keenly aware of this fact. It does not matter that some companies overpaid, their licenses will be liquidated along with the rest of their assets in bankruptcy and resold to the highest bidders. This process will continue until an equilibrium is reached where pricing that consumers are willing to accept aligns closely with the prices paid in the auctions. The market works and works well to solve these problems. If you really *want* UMTS bad enough then indicate your desire by being one of the first early adopters, presumably you want it badly enough to pay those high early adopter prices. If it is not that important to you then you should be happy to accept the money, in the form of more government service or less taxes, in exchange for having to wait while the companies cut each others throats in these auctions.

Use of this frequency (1)

jshriverWVU (810740) | more than 7 years ago | (#20307867)

What use does Google plan to make of these frequencies? I can't imagine doing wifi of 700mhz.

Re:Use of this frequency (1, Funny)

Anonymous Coward | more than 7 years ago | (#20308047)

Google plans to implant one or more neural chips into the head of everyone.
They will communicate with one another at this frequency creating Web 3.0 as a giant neural search repository stored in people's brains.

Re:Use of this frequency (1)

darthnoodles (831210) | more than 7 years ago | (#20308209)

I heard something similar but slightly different.

I heard they will tap unused portions of the brain for extra storage for GMail. I also hear Arkansas will be their largest source of said storage.

Re:Use of this frequency (1)

aegisalpha (58712) | more than 7 years ago | (#20308801)

Wasn't this the plot of a Doctor Who episode not too long ago?

Re:Use of this frequency (0)

Anonymous Coward | more than 7 years ago | (#20309417)

No, but it will be once I write it last year.

Re:Use of this frequency (4, Insightful)

tgatliff (311583) | more than 7 years ago | (#20308121)

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!! :-)

Re:Use of this frequency (1)

Bellum Aeternus (891584) | more than 7 years ago | (#20308893)

We don't know that M$ isn't going to bid, there's nothing preventing them from doing so. It wouldn't suprise me to see M4 make a bid, and perhaps Apple too. But lets face it, more than likely the telcos are going to buy the vast majority of the spectrum and lock it up.

Re:Use of this frequency (1)

CodeBuster (516420) | more than 7 years ago | (#20309737)

Microsoft would be very difficult to outbid if they *really* wanted the spectrum bad enough. It would probably take a coalition of telcos to amass enough capital to outbid them, they have $40+ billion in high liquidity short term securities (basically the same as cash) and cash. What is the market capitalization of the individual telcos like Verizon, AT&T, Sprint, etc?

Re:Use of this frequency (1)

jandrese (485) | more than 7 years ago | (#20308935)

Yes, because Iridium was such a massive success...

I've actually had to use Iridium modems in the recent past and I can tell you that the service is worse than you remember it but just as expensive.

Re:Use of this frequency (1)

tgatliff (311583) | more than 7 years ago | (#20309805)

Iridium failed because of two reasons. First, failure of concept in that you could never build a reasonably sized cell phone that could transmit about 100 miles to reach one of the low orbiting satellites. The second reason was that their design was basically just 9600 baud modems which make them almost useless beyond talking. Also, the need for connectivitiy in the 1980's was not that high. Today having a large data pipe is becoming very important...

In my opinion, the first company that could have a large footprint low cost global coverage map would be very valuable and would then be seen as the big player for all data communications. Think about the ability to have 10mbps anywhere in the world. No longer would you need fiber to cell towers. Businesses would now have another company to get internet/data/voice/video access from.. Meaning, M$ making a move like this could have a dramatic impact on their market cap and help them become a much relavent player in the video/data/voice markets..

Re:Use of this frequency (1)

SuseLover (996311) | more than 7 years ago | (#20309259)

Then they can turn on SkyNet ...

Re:Use of this frequency (2, Insightful)

skoaldipper (752281) | more than 7 years ago | (#20308157)

A great article [gigaom.com] explaining the reasoning.

Effective range:

its broadcast-attractive physics (like its ability to penetrate walls)
Out with the old UHF, in with the new:

analog television broadcasters to clear the 700 MHz airwaves on Feb. 17, 2009.
And, cost:

building a nationwide wireless network over the 700 MHz spectrum is around $2 billion versus a nationwide 1900MHz PCS that costs approximately $4 Billion.

Re:Use of this frequency (0)

Anonymous Coward | more than 7 years ago | (#20308301)

700mHz is an ideal band for WiFi. The only question is will there be enough tower space on the already crowded cell phone towers.

Listing Fees (0)

tehwebguy (860335) | more than 7 years ago | (#20307873)

Man, eBay is going to make so much money on the Final Value Fee for this auction

Re:Listing Fees (5, Funny)

LunaticTippy (872397) | more than 7 years ago | (#20308417)

eBay isn't going to make jack.

Purchase price: $0.01
Shipping: $4,899,999,999.99

The reserve bid is old news (3, Informative)

QuietLagoon (813062) | more than 7 years ago | (#20307921)

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.

An article [arstechnica.com] 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.

Show me the Money (1)

krgallagher (743575) | more than 7 years ago | (#20307955)

"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."

What is a 'package of U.S. national licenses?' Does anyone know where the money from this auction goes?

Re:Show me the Money (1)

CosmologyJello (1128761) | more than 7 years ago | (#20308081)

Does anyone know where the money from this auction goes?

Halliburton

Re:Show me the Money (1)

tomblag (1060876) | more than 7 years ago | (#20308129)

Ibm just won a contract to administer the digital tuner rebates for ~350 million. The 700z auction was supposed to pay for the program.

Re:Show me the Money (1)

hurfy (735314) | more than 7 years ago | (#20308211)

hehe, my exact question and no answer below yet :(

Re:Show me the Money (1)

jratcliffe (208809) | more than 7 years ago | (#20308541)

The "package of national licenses" refers to one of the frequency blocks being sold - it's broken up into about 8 regional licenses, but it will be possible to bid on all 8 as a "package" if you want to get a nationwide footprint (i.e. the same spectrum everywhere in the US.

The money goes the the US Treasury, and has to be paid by June 30th, 2008, because it's already been included in the budget by the Congress. In other words, it's already been spent.

Re:Show me the Money (0)

Anonymous Coward | more than 7 years ago | (#20308629)

Where does the money go? Haliburton via IRAQ

Backwards (3, Insightful)

WPIDalamar (122110) | more than 7 years ago | (#20307977)

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.

Re:Backwards (1)

moore.dustin (942289) | more than 7 years ago | (#20308113)

Or Google can pay 4.6B and add the other two restrictions themselves? They should remove them as they said they would, otherwise they just tailors the spectrum so it could sell it to Google and I... I do not want to live a country that does that.

Re:Backwards (1)

pla (258480) | more than 7 years ago | (#20308495)

otherwise they just tailors the spectrum so it could sell it to Google and I... I do not want to live a country that does that.

I think a lot of people have missed the meaning of the restrictions Google requested...

The restrictions apply to the buyer. They force whoever wins this block of spectrum to "play well with others", more or less.

Personally, I think the FCC should just open the spectrum as with the 2.4GHz, perhaps with just a few more minor restrictions on (such as limiting it to ultra-low power phased array) it to address the overcrowding of 2.4 we've seen; but this seems like a not-unreasonable compromise - Someone gets to "own" it, but can't just shut out the rest of the world.

Re:Backwards (4, Insightful)

Tacvek (948259) | more than 7 years ago | (#20309905)

If goggle buys this, I can be almost certain that it will be used to create a nationwide Wireless network, probably a "broadband" network.
The problem with the current systems are that only the existing cell companies can get into the business. There is no real way for a competitor to enter the market. Further, in general only approved devices can be used on the network (although the GSM networks are the exception). The companies can dictate what the network can be used for. As a result, Cellular internet prices are outrageous, and unfair.

So what Google would do is but the spectrum. They would standardize on a protocol. They would let companies provide services (most likely internet services) on that band. The companies offering services on that band would be required to let any devices that support the protocol to be used (likely a SIM-card like system would be used). The companies could not restrict the applications or services used on the network. Smaller companies would have a much better chance to get in on the action, as the major requirements would be an antenna on a cell tower, and a large internet connection. They would only need to provide the end users with a SIM, as the modems could be gotten anywhere. The total overhead of providing 700 MHz internet access would be far less than the traditional cell system, and thus there would be significant competition, and low prices.

The key here is that the spectrum owner has no interest in providing the service themselves, and has no reason to sell out to the large companies. So they would have no problem allowing multiple companies to provide the service in the same area. That is not heard of for most utilities. Also, unlike cell phones, the companies competing in the local area would not conspire to fix prices, as the cost of entrance would be low enough that a new player could easily join in.

If I am correct about that, that would be the sort of thing the government should do. That sort of regulation would level the playing field, and thus allow capitalism to work well both for businesses and for consumers. That would be the sort of regulation that is ideal. Unfortunately all too often, government regulation works to make the playing field less even, in the favor of the entrenched large companies that are already working in that sector.

Re:Backwards (2, Interesting)

WPIDalamar (122110) | more than 7 years ago | (#20309349)

Problem is, it's sold in chunks. So an incumbent wireless provider can buy a single region and completely prevent any other player from having a national wireless network.

Re:Backwards (1)

NeutronCowboy (896098) | more than 7 years ago | (#20308261)

You misunderstand the value of open-access to telcos: it reduces the value of the bid. Removing the open access restrictions adds value for the telcos that didn't bid, and therefore makes it more likely that the FCC gets its minimum value. This is done so that if Google decides to renege on its promise (this was, after all, only a PR declaration), the FCC isn't left without an option to get at least some money.

FCC Puts 4.6 Billion Minimum Bid on Spectrum... (1)

east coast (590680) | more than 7 years ago | (#20308125)

FCC Puts 4.6 Billion Minimum Bid on Spectrum Auction?

I'll take two of them!

Re:FCC Puts 4.6 Billion Minimum Bid on Spectrum... (0)

Anonymous Coward | more than 7 years ago | (#20308229)

Can I have one with Ham on Top???

Clarification, Anyone? (0)

Anonymous Coward | more than 7 years ago | (#20308145)

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?

Re:Clarification, Anyone? (1)

heelrod (124784) | more than 7 years ago | (#20308243)

dude, the government owns everything.

Why would you think that air in America is free? geez

Re:Clarification, Anyone? (0)

Anonymous Coward | more than 7 years ago | (#20308611)

The mexicans don't pay nothing to use their spectrums in their lands.

The U.S. Federal cannot invade their overpowered spectrums's signals in the Mexico's territory!!!

Re:Clarification, Anyone? (0)

Anonymous Coward | more than 7 years ago | (#20308603)

The government regulates the frequencies. If they didn't there would be massive conflicts between competing devices. Since they regulate it, they get to assign licenses to use it. Why should they give away the licenses for free if companies are willing to pay for them? And pay a lot?

The government doesn't 'keep' the money, it will get added into the federal budget. Every billion that is earned in these license sales will be a billion that doesn't have to come out of our income tax to pay for the war in Iraq, etc.

Re:Clarification, Anyone? (0)

Anonymous Coward | more than 7 years ago | (#20309235)

Every billion that is earned in these license sales will be a billion that doesn't have to come out of our income tax to pay for the war in Iraq, etc.
uh huh.......

Re:Clarification, Anyone? (1)

phoenix.bam! (642635) | more than 7 years ago | (#20309649)

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.

Re:Clarification, Anyone? (1)

UserGoogol (623581) | more than 7 years ago | (#20309089)

More or less. The broadcast spectrum is the sort of thing which it is hard to "homestead" in any meaningful sense. It's not like land where you can make a fence around some unowned area and call it a day. To "own" some section of the broadcast spectrum means the exclusive right to emit photons of a certain energy within some area, and it's hard to imagine what a person would do to be able to say they've earned that right. 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.

As for the auctioning in particular, I think the idea is that selling them to the highest bidder assures that whoever gets the spectrum is going to try to get their money's worth out of it rather just letting it sit around doing nothing, thus assuring some amount of efficiency. Although I'm sure the government does appreciate an excuse for grabbing some more revenue.

"Don't Be Evil" (0)

Anonymous Coward | more than 7 years ago | (#20308179)

My ASS! Google is the ATT of the new millenium.

Can they afford it? (1)

llZENll (545605) | more than 7 years ago | (#20308281)

"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 [arstechnica.com]

This spectrum will probably go for 20 - 30 billion. How much cash does Google have?

Not cash... (1)

tkrotchko (124118) | more than 7 years ago | (#20308525)

"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.

Other way around. (2, Insightful)

chaboud (231590) | more than 7 years ago | (#20308797)

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.

Re:Can they afford it? (1)

bluemonq (812827) | more than 7 years ago | (#20308687)

None of the mobile phone service providers have enough cash reserves to even meet the minimum bid; only Google does. I suspect they aren't expecting to be paid in cash, or if so, not in one lump sum.

SOLD (0)

Anonymous Coward | more than 7 years ago | (#20308563)

to the criminals [whitehouse.org] who brought you Operation Neck-Deep-In-The-Big-Sandy [jihadunspun.com] .

Cheers,
K. Trout

citizen's should bid (1)

nategoose (1004564) | more than 7 years ago | (#20308639)

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.

Re:citizen's should bid (2, Funny)

WebHostingGuy (825421) | more than 7 years ago | (#20308949)

Sound great. Why don't you paypal me the money and I will hold on to it until the auction?

COD (0)

Anonymous Coward | more than 7 years ago | (#20308691)


Will you take a check?

Chump change... (1)

xednieht (1117791) | more than 7 years ago | (#20308857)

I predict a record-breaking bid will ultimately win this one.

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/ 10/1236207 [slashdot.org] = big revenue.

Jeez (2, Funny)

jhines (82154) | more than 7 years ago | (#20309125)

And all I wanted was a Hz or two. Dang it all.

Clear Channel all over again (1)

Orig_Club_Soda (983823) | more than 7 years ago | (#20309231)

Yea, more monopolies.

Google's ploy to get M$ to cough up... (1)

Kazoo the Clown (644526) | more than 7 years ago | (#20309387)

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...

Re:Google's ploy to get M$ to cough up... (1)

Renraku (518261) | more than 7 years ago | (#20309845)

Maybe they have no legitimate interest. They see Microsoft's overall lack of success in side markets.

If MS dropped $30 billion for this as a knee-jerk reaction to keep it away from Google, well...they might get a third of that, total, back in revenue. That's after a few more billion to develop uses for it.
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