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The $10 Billion Poker Game Begins

Zonk posted more than 6 years ago | from the just-a-bit-high-stakes dept.

The Almighty Buck 169

Hugh Pickens writes "Monday was the deadline for potential bidders to file with the Federal Communications Commission over the auction of the 700-megahertz band, a useful swath of the electromagnetic spectrum that is being freed up by the move to digital television. Once bidders file they become subject to strict 'anticollusion' rules that in effect prohibit participants from discussing any aspect of their bidding until the auction is over. The next official word will be late December or mid-January, when the FCC announces who has been approved to bid. The auction will start on January 24. Participants will use an Internet system to enter bids on any of 1,099 separate licenses that are being offered (pdf). Most coveted seems to be the C block, 12 regional licenses that can be combined to create a national wireless network. This is the spectrum Google is presumed to be most interested in. The bidding will be conducted in a series of rounds (pdf)."

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Oh boy! (1, Funny)

scubamage (727538) | more than 6 years ago | (#21572177)

I'm excited!!! Hopefully we'll actually see some genuine competition between these giants.

Re:Oh boy! (1)

LWATCDR (28044) | more than 6 years ago | (#21572235)

You know Sprint, Verizon, and AT&T are pretty much going at it tooth and nail.
Of all of them I still think Sprint is one of the most open. Compared to Verizon they are super open.

i'll go first (1, Funny)

Anonymous Coward | more than 6 years ago | (#21572183)

all in

Re:i'll go first (3, Funny)

Archangel Michael (180766) | more than 6 years ago | (#21572437)

Hardly threatening, since you can't even match the Ante, let alone the small blind.

These pretzels are scientifically charged with the (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#21572191)

power of wingnut lampreys

Re:These pretzels are scientifically charged with (0)

Anonymous Coward | more than 6 years ago | (#21572897)

the modoratores are abusing my guadrant of subliminol lavender

Enforcement mechanism (4, Interesting)

UbuntuDupe (970646) | more than 6 years ago | (#21572205)

Once bidders file they become subject to strict 'anticollusion' rules that in effect prohibit participants from discussing any aspect of their bidding until the auction is over.

It's very hard to prove that you did not collude with someone. If AT&T wins, and a year later it turns out they had a secret deal with Verizon, what happens? Will the license be revoked? Or will AT&T successfully argue about the need to "put the past behind us"?

Re:Enforcement mechanism (4, Insightful)

MosesJones (55544) | more than 6 years ago | (#21572837)

Depends on the rules, but certainly when the UK government did a similar exercise around 3G (raising masses of cash in the process) the penalty was pretty strict. There is no reason why the penalty couldn't be "we keep the money and take back the license selling it to the 2nd placed bidder".

Remember officially the government "own" this stuff so they get to define the terms that they want.

Re:Enforcement mechanism (0)

Anonymous Coward | more than 6 years ago | (#21574601)

Remember officially the government "own" this stuff so they get to define the terms that they want.
The idea that the government "owns" the spectrum is a fundamental part of the problem. The people "own" the spectrum, the government is supposed to be getting us the best deal, in terms of both money and freedom. Good luck with that actually happening. The profits will be privatized and the losses socialized.

Re:Enforcement mechanism (1)

davidsyes (765062) | more than 6 years ago | (#21573483)

No, they will just find out why there were *1,099* licenses. Obviously, the government KNOWS someone will collude, and when found out, these "*collusionists*" will learn what a Form 1099 is for.

"Those who receive 1099 income come from a wide spectrum."

http://www.wisegeek.com/what-is-a-1099-form.htm [wisegeek.com]

The government knows how to play poker, too...

Well if there are bets being placed... (2, Insightful)

yamamushi (903955) | more than 6 years ago | (#21572215)

I'm betting google will come out with everything it intended to.

Re:Well if there are bets being placed... (1)

houstonbofh (602064) | more than 6 years ago | (#21572305)

I'm betting google will come out with everything it intended to.

The question is what does it intend? Do they really want national spectrum, or are they just trying to drive up the price to financially cripple competitors?

Re:Well if there are bets being placed... (1)

scubamage (727538) | more than 6 years ago | (#21572491)

Who cares, either way my stock goes up, and ma bell and her babies get a swift kick in the teat. Its win win!

Bogus (2, Insightful)

Zebra_X (13249) | more than 6 years ago | (#21572265)

This whole "bidding" process on the spectrum doesn't create compeition, it makes the government money. If it were truly competitive there would be no fee for spectrum use. Instead we are left with a new spectrum with someone spending billions of dollars to "own" it.

Lame.

I'm also skeptical that this can become a useful resouce in a reasonable amount of time. It's great that Google et al buys up spectrum, but what about build out? How long is that going to take? What about radios? It's probably not that much of a change from current technology but it takes time.

Also, can the radios that use this network roam gloablly?

What would be cool is if Google bought it and let everyone "use" it.

Re:Bogus (4, Insightful)

snarkh (118018) | more than 6 years ago | (#21572515)


So if there were no fee to use the spectrum, how would you choose the winner?
You cannot just let everyone use it -- there would be a lot of interference.

Re:Bogus (1)

thrillseeker (518224) | more than 6 years ago | (#21572885)

You cannot just let everyone use it -- there would be a lot of interference.

This is what CDMA excels at.

Re:Bogus (1)

snarkh (118018) | more than 6 years ago | (#21572995)


Still, every technology has a limit on its capacity. You can only push so many bits through a channel before they become mashed together.

Re:Bogus (1)

davidsyes (765062) | more than 6 years ago | (#21573515)

There'd be "interference" with cash flow, too. That's why the governments are playing Form 1099 Poker via the "internets"... They want to suck from the tubes all the spectrum income flow they can get... What an udder shame...

Re:Bogus (5, Funny)

edmicman (830206) | more than 6 years ago | (#21574397)

What an udder shame...
That's a moo point. It's like a cow's opinion. It just doesn't matter. It's moo.

Re:Bogus (-1, Flamebait)

Anonymous Coward | more than 6 years ago | (#21572687)

What's lame is your understanding of how business works. The company that values this spectrum the most should pay the most for it. And please explain why Google should spend billions buying spectrum and deploying the infrastructure just to let everyone "use it". Make no mistake, if Google doesn't have a business plan to extract boatloads of cold, hard cash from people who must have their gadgets, then investors will eventually turn on them.

Does it get any more naive? You probably believe software should be free too...

Re:Bogus (1)

Chandon Seldon (43083) | more than 6 years ago | (#21572937)

Assuming the existence of a free-market economy, an auction is an *excellent* way to allocate a limited resource.

In order for spectrum auctions to be a bad idea, we would either need to have a non-free market or spectrum would have to be a non-limited resource. There are excellent arguments for both of those claims, but you'd have to make one of them for your point to be correct.

Re:Bogus (2, Interesting)

Red Flayer (890720) | more than 6 years ago | (#21573871)

Assuming the existence of a free-market economy, an auction is an *excellent* way to allocate a limited resource.
No, a free-market economy precludes auctioning off a public resource to be used by a single entity. The US government is not auctioning off a good, they are auctioning off the right of use for a good theoretically available to all. By definition, this is not free-market. A truly free-market stance would open up the spectrum to all, and let the strongest signals win.

This is not to say that I don't think it's the best course of action (I'm not nearly knowledgeable enough about spectrum auctions and that market to make that call), but by definition it is counter to the principles of a free market.

This also in no way resembles the activity in an ideal free market, which is something different and not to be confused with free-market idealogy. There is restriction on supply, there are barriers to entry, and there is less than perfect information about the market available to the actors within it.

In order for spectrum auctions to be a bad idea, we would either need to have a non-free market or spectrum would have to be a non-limited resource.
It is a non-free market; it is government restrictions that prevent participants from acting at will for each of the spectra. Government, in this case, dictates the terms of use for the spectra -- how is this free-market? As for a non-limited resource, again it is government action that limits the resource. Were the spectra open to all, it would in effect be a less-limited resource than now. If one buys into the theory that a free market results in the most efficient allocation of resources, the best course of action would be to open up the spectra, correct?

Re:Bogus (4, Interesting)

Stewie241 (1035724) | more than 6 years ago | (#21574773)

A truly free-market stance would open up the spectrum to all, and let the strongest signals win.
O gee... that's a brilliant idea! We'll have cell towers broadcasting over each other. Ever been in a midway point between two radio stations broadcasting on the same frequency? Sure, the phase locked loop will lock on one or the other, but what happens when you pass off from one cell to another and there is no way to guarantee that you will get picked up on the next cell. There is also no guarantee that in the middle of the conversation somebody else won't power up stronger and your call will get dropped.

Add to that the fact that the spectrum license presumably would include limits as to transmission power for safety and other reasons. Let's just shoot very very high power microwaves every where and see what happens.

Strongest signal wins doesn't work in the cell phone/wireless industry. Otherwise, the company with the most money could just put up signal generators cranking out radio waves to prevent anybody else from using a channel until they were ready to roll out infrastructure.

Re:Bogus (1)

Red Flayer (890720) | more than 6 years ago | (#21575523)

Thanks for getting my point. You didn't notice the tongue-in-cheekiness of my post? "If one believes"... I thought this would be enough to make it clear that I don't beleive that...

I believe regulation is necessary, and was making the point that to bring free market ideology into the spectra question is filled with problems, since extending the free market ideology further results in useless spectra. I was taking the GP's idea that the free market is the answer by taking it to it's natural conclusion.

Re:Bogus (1)

Chandon Seldon (43083) | more than 6 years ago | (#21574943)

That's like saying that you can't have a free market when people own land. Exactly the opposite is true. A free market is only a meaningful term in the presence of property rights - without property rights there is no market. Any property right is a government (or societal) restriction.

The question is which set of government restrictions is most socially beneficial.

Interestingly, having a free market in some areas makes it impossible to have a free market in others - which makes an ideal free-market world impossible.

Re:Bogus (1)

Red Flayer (890720) | more than 6 years ago | (#21575445)

Interestingly, having a free market in some areas makes it impossible to have a free market in others - which makes an ideal free-market world impossible.
An ideal free market is impossible anyway, since it requires full knowledge of the market by all participants. My point (thanks for catching it!) is that a free-market stance on spectra precludes a free-market stance on communications via those spectra, since allowing ownership of the spectra constitutes restrictions on how spectra are used.

I'm definitely not a free-market idealogue. I wanted to make the point that if you take free markets as the ideal, legislating a "free" market in one related good often restricts the market for another.

Re:Bogus (1)

JesseMcDonald (536341) | more than 6 years ago | (#21574967)

A truly free-market stance would open up the spectrum to all, and let the strongest signals win.

Close, but not quite. A "truly free-market" system would protect existing users of a radio channel (frequency/bandwidth/location) from interference by newcomers. This is the homesteading principle applied to radio (or radio-sensitive devices, if you prefer). What you describe -- "let the strongest signal win" -- is a complete absence of property rights relating to radio and electronic interference, and in the absence of property rights there is no market, free or otherwise.

Re:Bogus (1)

Red Flayer (890720) | more than 6 years ago | (#21575359)

A "truly free-market" system would protect existing users of a radio channel (frequency/bandwidth/location) from interference by newcomers.
Absolutely false. Artificial barriers to entry are anathema to both an ideal free market and to the free market ideology. This is free market economics 101.

You make the assumption that radio spectra are equivalent to land, that property rights should apply. Your point is only valid if this assumption is true -- but it doesn't need to be true. We do not inherently need to assign property rights to the spectra.

The spectra market is tied to the communications market (this is the last definable single end use of the spectra). By assigning property rights to the spectra, you then are restricting the communications market, in violation of free market principles.

Re:Bogus (1)

teh kurisu (701097) | more than 6 years ago | (#21573267)

The experience from the sale of 3G licences in the UK is that the bidding process put the winners in such a bad financial situation that they couldn't proceed with the rollout of 3G services in the expected timescales. The public purse might have swollen, but consumers definitely lost out.

There's also the sad reality that the spectrum is divided among a handful of big players. Auctioning the spectrum works against small, innovative players.

I don't undertstand (2, Interesting)

Phairdon (1158023) | more than 6 years ago | (#21572291)

Can someone explain to me why a company has to pay the FCC huge gobs of money in order to use a frequency in the air? What keeps someone from using whatever the heck frequency that they want to? How can someone, in this case the FCC, take control of all frequencies and then 'sell' them to the highest bidder? To me it seems like saying you can't breathe the air around my house unless you pay me, which is dumb of course because nobody owns the atmosphere. I just don't get it, I don't understand this aspect of our economy.

Re:I don't undertstand (2, Insightful)

greypilgrim (799369) | more than 6 years ago | (#21572445)

It's about control. Do you enjoy being able to chat on your cell phone? If the frequencies were open to anyone, then everyone would use the best frequency for their application, and there would be so much interference that nothing would work. By controlling who uses which frequencies, you can ensure that interference is kept at a minimum, and devices remain useable.

Re:I don't undertstand (0)

Anonymous Coward | more than 6 years ago | (#21572539)

Well you could always ramp up the watts until your application starts to work again, and the survivors would be applications where it's possible and economical to devote enough power for it to work. Anyway, the point is to do this fight with dollars instead of watts to save energy. Maybe also health concerns.

Re:I don't undertstand (1)

Chandon Seldon (43083) | more than 6 years ago | (#21573521)

Remember how quickly radio frequencies decrease with range. Effectively jamming short range transmissions over a large area with a single transmitter is massively expensive. The FCC could probably just put a power cap on transmissions in general - and basically turn this into a local zoning question.

Re:I don't undertstand (0)

devidebyzero (1160701) | more than 6 years ago | (#21572451)

Yup, they are bidding $10 billion for air...

Re:I don't undertstand (0)

FiveLights (1012605) | more than 6 years ago | (#21572455)

If everyone started using whatever frequency they wanted to, few of the frequencies would be useful. What if you were using a service and some other service came in and overpowered it, because they had more money for better transmitters or whatever? You would want to go to the government and say, "they can't do that, I was using first!" In a way claiming that you "own" the frequency in that location. This way the same thing happens (the rich and powerful companies get to use the spectrum) but the government also gets money. It's a win-win for everyone but you and me!

Re:I don't undertstand (1)

krakelohm (830589) | more than 6 years ago | (#21572831)

It's a win-win for everyone but you and me!


I do not see how you can say its not a win for customers. We get equipment that actually works. Not everyone has the time/money/skill to roll their own cellphone network... and that is a very good thing. Yes big companies are evil bla bla bla but with them there also comes the ability to fly somewhere and know your cell phone will work, its a standard. I seriously doubt you would be able to achieve that without them.

Re:I don't undertstand (1)

spaceyhackerlady (462530) | more than 6 years ago | (#21574103)

If everyone started using whatever frequency they wanted to, few of the frequencies would be useful. What if you were using a service and some other service came in and overpowered it, because they had more money for better transmitters or whatever? You would want to go to the government and say, "they can't do that, I was using first!" In a way claiming that you "own" the frequency in that location. This way the same thing happens (the rich and powerful companies get to use the spectrum) but the government also gets money. It's a win-win for everyone but you and me!

This is the function of radio licensing. Organizations get a license for whatever it is they want to use radio for (communications? broadcasting?), are assigned a frequency to use, and they use it. Subject to sharing requirements (which vary - think AM radio at night vs. UHF TV), that frequency is theirs, and nobody else can use it. My employers do wireless data, for example, and we have several frequencies in the 900 MHz area that we are licensed to use for over-the-air testing. These frequencies are ours, and if anybody else tries to use them, they're in trouble. Due to the characteristics of these frequencies, while our frequency is ours in greater Vancouver, it could be assigned to others in other areas.

Some services are assigned ranges of frequencies, and sort out the sharing among themselves. Ham radio is a good example of this. Wifi networking is another.

The auction nonsense is new. Somebody figured the FCC could make a quick buck. The fad caught on, and lots of other countries are making similar quick bucks.

...laura

Re:I don't undertstand (4, Informative)

everphilski (877346) | more than 6 years ago | (#21572485)

It is considered a natural resource ... just like land. Other countries do the same thing.

There are portions of the spectrum that are free to use for certain non-commercial uses. Amateur radio bands, family radio bands, bands that are open to experimenters, Citizen Band radio, etc. Each comes with certain restrictions as to use and power output. Most have commercial restrictions.

Re:I don't undertstand (1)

phantomcircuit (938963) | more than 6 years ago | (#21572501)

The original premise was that wireless spectrum needed to be regulated to prevent collisions.

Government working the way it does figured out that this could be taxed, the most effective way to tax this is to auction off spectrum licenses.

Honestly auctioning off spectrum licenses seems better than the alternative of the FCC deciding who can use what spectrum based on what their view of what is the most useful.

Clearly the FCC has no idea what is the best application for the limited spectrum 'resources' that are available.

Re:I don't undertstand (1)

edremy (36408) | more than 6 years ago | (#21572525)

IANAL, but I suspect it falls under the Interstate commerce clause.

In general, the feds can regulate things like this because the alternative is total destruction of the asset. Without some kind of central control, everyone gets to play and they stomp all over each other. Sure, you can set up a transmitter, but then so can your neighbor, and he can do it at the same frequency and a higher power. Neither of you can stop your transmissions from bleeding over onto the guy two streets down. (Of course, even with the FCC around this doesn't always work, especially if you are a small, public university station and there's a huge religious broadcaster who is willing to bend the rules [rlc.net] ).

Oh yeah, and the government does regulate the air you breathe. Clean Air Act anyone? You're arguably paying for it in higher power and automobile costs.

Re:I don't undertstand (2, Informative)

Diss Champ (934796) | more than 6 years ago | (#21572547)

The FCC is a part of the government. The government has a monopoly on force. If it says you have to pay to do something, and it has a reasonable way to detect that you are doing it, then they usually get the money, either through official means like this auction, or unofficial means like officials being bribed to look the other way.

The government thinks it owns the air you breathe too. You might not have noticed, but there are all sorts of regulations regarding vehicle and industrial emissions. Most people think most of these are a good thing- but it does amount to the govt having a certain control over the air you breathe.

Pragmatic stuff like the above aside, the general argument for the FCC controlling access to the airwaves is that it is a scarce resource, so someone needs to apportion it fairly- and in this case "fairly" is defined as giving the govt as much money as possible for the govt to spend for the general welfare (i.e. to bribe constituents to vote in again the people in charge of spending the money, or special interests to contribute to campaigns to the same end).

Re:I don't undertstand (1)

Zontar_Thing_From_Ve (949321) | more than 6 years ago | (#21572581)

Can someone explain to me why a company has to pay the FCC huge gobs of money in order to use a frequency in the air?

If you're not American, I can understand your question to a certain extent, but such regulation is also done all around the world. The Communications Act of 1934 set up the FCC in the USA and gave them the authority to regulate all non-Federal Government use of the radio spectrum, which includes radio and TV broadcasting. Since they regulate it, they in effect "own" it and thus can sell the TV spectrum that will be freed up with the conversion to all digital TV broadcasting. Radio and TV broadcasting is regulated everywhere so that it works. Otherwise I'm sure they would be horrible reception issues where some local station puts up a giant tower and broadcasts on the same channel as their rivals across town and you would have a frequency battle going on where nobody wins. Regulation is not necessarily evil, despite what you with your presumed libertarian views might think. The government can sometimes play a vital role in regulating various things, but I would judge this on a case by case basis rather than offering up a blanket statement that "all regulation is evil" or "all regulation is good". I can't think of any countries where TV and radio broadcasting aren't regulated at all.

Re:I don't undertstand (1)

EastCoastSurfer (310758) | more than 6 years ago | (#21574213)

Regulation is not necessarily evil, despite what you with your presumed libertarian views might think.
A libertarian view would agree with the private ownership of the spectrum and the regulation that goes along with it. What they wouldn't agree with is the way the FCC continues to muck with what you're allowed to do with the spectrum after you lease it. For example, fining Howard Stern shouldn't be the job of the FCC (or anyone for that matter).

Re:I don't undertstand (1)

GodfatherofSoul (174979) | more than 6 years ago | (#21572625)

Because some things in all practicality MUST be regulated by the government, or you end up w/ a cluster fsck. For example, I lived in Italy (Army brat) in the late 80s-early 90s and the radio stations there didn't have the same regulations on ownership of frequency separation-distance that we're used to in the states. So, stations that picked aestheticly pleasing frequencies or only cared about the metro would cause havok on the outskirts of their range.

Now, auctioning off frequencies to the highest bidder rather than basing ownership on the public good is another matter. But, that only seems to be a historic concern.

Re:I don't undertstand (2, Informative)

Starfisher (1198219) | more than 6 years ago | (#21572631)

If anyone could use any frequency without having to check to make sure it wasn't already in use, you'd quickly run into some communications and quality issues. To prove this, take 1000 people, give them radios that can select between five frequencies, and have them try to have 500 private conversations. So the FCC exists in order to regulate the airwaves, ensuring that you don't get interference. Someone has to pay for the staffing and operation of the FCC, so they came up with the idea that if you want to use some part of the spectrum exclusively for your prodcut you have to pay the government to do so. In theory, this means you are leasing that spectrum from "the American people", as represented by the government, and some of that money then pays for the FCC. Technically, you are charging Verizon/Google/whoever for your airwaves through the government. Convoluted to be sure, but it fulfills its primary purpose - to avoid constant interference - and generates revenue from a national resource - air. You might argue that there are better ways to divy up the spectrum (maybe without the massive fees), but no matter what method you choose, you still need some regulation. Hell, if you buy one of those Motorola radios that can use the GMRS frequencies, you are supposed to pay a $75 licensing fee to do so, again under the basic logic above. I doubt anyone actually does, and since they only have 1 watt of transmission power it's usually not an issue in terms of interference, but they're not paying rent. Bastards! ;P

Re:I don't undertstand (1)

vertinox (846076) | more than 6 years ago | (#21572667)

Can someone explain to me why a company has to pay the FCC huge gobs of money in order to use a frequency in the air?

And speaking of which, what does the FCC have to do with interstate commerce? Perhaps they could regulate broad casting between states, but if I have a device that doesn't broadcast over state lines where is the basis in the original framework for such an organization to dictate who or what does something with the device you built.

Now I suppose the FCC could regulate devices that are shipped from overseas or interstate wise but if you build it yourself then why should they have a say?

Re:I don't undertstand (0)

Anonymous Coward | more than 6 years ago | (#21572725)

As a college student working for the DoD as part of a Co-op program, I have to sometimes deal with getting approval for our devices to operate on a certain frequency. It may surprise you, but pretty much all Governments around the world appropriate the use of frequency spectrum in their country to avoid the chance of co-channel interference [wikipedia.org] .

A simple example to think about your radio. You'd have a serious issue with someone that set up a small radio tower in their backyard and broadcast their amateur program at the same frequency of your favorite radio program as all you would hear is a jumbled mess.

Re:I don't undertstand (0, Flamebait)

Paulrothrock (685079) | more than 6 years ago | (#21573075)

You're exactly right! I also don't understand why we don't let timber companies cut down every tree in Yellowstone. Don't they own part of it, too? Shouldn't they be allowed to cut down trees they own?

Re:I don't undertstand (1)

YukonTech (841015) | more than 6 years ago | (#21574503)

Laws are what are stoppping them. Why do you have to pay register a car? Why can't you just get behind the wheel of whatever you want and drive it as fast as you want whereever you want. I hear school playgrounds are a great place to do donuts. If the wirless spectrum was left to anarchy you'd have ads and interferance everywhere. Lets use FM radio band as an example. Person a creates a popular radio station on the 91.1 FM band, a million people listen everyday and advertisers pay to get exposed to that audiance. Now in the anarchisrt system you are suggesting I could build a supped up transmiter, and transmit muy own commercials which I charge for on the 91.1 Band, even if I do nothing but push out commercials people close to me will get the commercials, people a lil farther away will get 91.1 music, 91.1 commercials(mine), and a bunch of static at the same time. There needs to be rules setup in order to make sure people play nice. No onward to phones, you buy a phone from AT&T and expect it to work all the time, but once again greedy low life (a new form of spammer if u will) puits up his own tower to either: 1)Help AT&T's competitors by messin up AT&T network. (than mpocket some nice cash) 2)Transmit ads, or (in the digital age) perform man in the middle attacks with data. 3)Sell my own phones that also use the same range giving me cheap startup cost. Also causing endless static for anyone close to my transmitter The idea here is sure it would be great if we lived in a society mature enough to not need the government telling us what we can and can't do, but therte are enough greedy low life weastes of space (*cough spammers *cough*) who care about nothing but making money that would selfishly use the frquencies for their own good no matter what damage it causes.

Re:I don't undertstand (1)

superwiz (655733) | more than 6 years ago | (#21574891)

Yeah! And how can government just tax land? No one owns land. It's just there. C'mon. It's a limited resource which government can prevent anyone from using. Since it is limited -- multiple people can't use pretty much just as multiple people can't use the same piece of land -- the only fair way to determine who gets to use it is to auction it off. At least at that point whoever has it bought it for the most money and will be forced to put it to most use.

Why is the Govt selling something they don't own? (0)

Anonymous Coward | more than 6 years ago | (#21572319)

I have a hard time with the government taking in money for something they don't own. Sure regulate the airwaves, charge a fee for the administration, but to auction off frequencies? Also this is due to forcing the TV stations to move to digital.

We will make the cost of operating a television station go up, for those that do not have cable or satellite it will cost more for the digital equipment. This only serves the government, it does not serve the people.

Let's take it up a notch! (3, Funny)

TheHawke (237817) | more than 6 years ago | (#21572413)

Sniping, anyone?

FCC's basis for regulation? (4, Funny)

Anonymous Coward | more than 6 years ago | (#21572419)

Did we ever pass an ammendment that granted the federal government the right to regulate the electromagnetic spectrum? I don't speak legalese but I'm pretty sure that it wasn't put in there when the Constitution was written.

Re:FCC's basis for regulation? (0)

Anonymous Coward | more than 6 years ago | (#21572531)

probably related to interstate commerce

Re:FCC's basis for regulation? (1)

snarkh (118018) | more than 6 years ago | (#21572563)

Interstate commerce, I suppose.

Re:FCC's basis for regulation? (2, Interesting)

kcornia (152859) | more than 6 years ago | (#21573279)

Yep, I bet you couldn't come with anything in your lifetime that some congressperson wasn't able to tie to interstate commerce somehow...

There are 16 enumerated powers granted to the legislative branch by the constitution. ALL other laws flow from one of two things, 1) interstate commerce, and 2) the clause at the end of the enumeration (article 1, section 8) that says "To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof."

If you ever stop and really think about it, the system we have in place begins to look really really ridiculous. Don't get me wrong, it works fairly well most of the time, but it is a far cry from what the founders could have imagined.

Re:FCC's basis for regulation? (1)

snarkh (118018) | more than 6 years ago | (#21573399)

Don't get me wrong, it works fairly well most of the time, but it is a far cry from what the founders could have imagined.

I agree with you. However, regulating the spectrum does not seem to be such a far-fetched application of the interstate commerce clause. Certainly, radio waves cross the state borders freely.

Re:FCC's basis for regulation? (1)

Crazy Taco (1083423) | more than 6 years ago | (#21574017)

And additionally, that part of the spectrum (formerly used for TV channels) definately fell under the category of commerce, what with all the ads and everything.

Re:FCC's basis for regulation? (1)

jea6 (117959) | more than 6 years ago | (#21572573)

I can't tell if you're a troll or not. In any case, take a look at Article I, Section 8, Clause 3: "The Congress shall have power . . . To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;".

Re:FCC's basis for regulation? (1)

vertinox (846076) | more than 6 years ago | (#21572707)

So if I build my own TV and or radio station which does not broadcast over state lines then I should be fine without an FCC license right?

Oh wait...

Re:FCC's basis for regulation? (1)

everphilski (877346) | more than 6 years ago | (#21572749)

Good luck with that. You can't just 'stop' radio waves from propagating ... with enough power to service the community in question, someone with a high enough gain antenna the next state over will pick up your station.

Re:FCC's basis for regulation? (1)

ch-chuck (9622) | more than 6 years ago | (#21574365)

Actually the gp has a good point - a 1 watt FM station operating in the middle of Texas for all practical purposes can serve a small neighborhood community yet be way too weak to pick up in any surrounding state or Mexico except maybe very briefly under highly unusual circumstances. Yet the feds have the power to shut 'em down.

Re:FCC's basis for regulation? (1)

hypnagogue (700024) | more than 6 years ago | (#21573491)

Does it interfere with any licensed services? Does it create unfair competition to any licensed services? Is it operated in a safe manner?

I don't think you've thought it through.

Re:FCC's basis for regulation? (1)

vertinox (846076) | more than 6 years ago | (#21575141)

Does it interfere with any licensed services? Does it create unfair competition to any licensed services? Is it operated in a safe manner?

That wasn't the jist of the statement. The question is why does the FCC get to regulate frequencies when it could be just as well regulated by State governments when it doesn't affect interstate commerce.

Re:FCC's basis for regulation? (0)

Anonymous Coward | more than 6 years ago | (#21573561)

Article 1 Section 8 Clause 3 says nothing about the electromagnetic spectrum. Looked over all the clauses and there's nothing in that section that remotely covers it. How can Clause 3 be twisted to convey such silliness?

Re:FCC's basis for regulation? (1)

jo7hs2 (884069) | more than 6 years ago | (#21572679)

See Article I, Section 8, Clause 3.

Re:FCC's basis for regulation? (0, Flamebait)

jo7hs2 (884069) | more than 6 years ago | (#21572739)

See Article I, Section 8, Clause 3. "The Congress shall have power . . . To regulate commerce with foreign nations, and among the several states,...with the Indian tribes, and whatever else it wants."

Re:FCC's basis for regulation? (1)

databuddha (88882) | more than 6 years ago | (#21572847)

From the FCC's website:

The Federal Communications Commission (FCC) is an independent United States government agency, directly responsible to Congress. The FCC was established by the Communications Act of 1934 and is charged with regulating interstate and international communications by radio, television, wire, satellite and cable. The FCC's jurisdiction covers the 50 states, the District of Columbia, and U.S. possessions.

Re:FCC's basis for regulation? (0)

Anonymous Coward | more than 6 years ago | (#21573005)


The FCC's jurisdiction covers the 50 states, the District of Columbia, and U.S. possessions.


Hmmmm.... Are FM stations in Hawaii really interstate or international communications?

Does it matter? (0)

Anonymous Coward | more than 6 years ago | (#21572867)

because the same people who don't support regulation such as this will be clamouring for protection by using the Fairness Doctrine to clamp down on speech they don't like

Re:Does it matter? (1)

FauxPasIII (75900) | more than 6 years ago | (#21574817)

If the spectrum were unregulated there would be no need for a fairness doctrine, an anyone would be free to put up an antenna and get his or her message out. But, as long as our agents in the government are doling out regional monopolies to particular slices of spectrum, we are well within our rights to require that the beneficiaries of those monopolies hold to certain regulations. They are always free not to enter into the voluntary agreement in the first place.

IANARadio engineer, so I have no clue if this particular range of frequencies would be useful if left wide-open for public use or not.

Re:FCC's basis for regulation? (0)

Anonymous Coward | more than 6 years ago | (#21572917)

Good question, but if theres anything that calls for regulation of "interstate commerce", electromagnetic waves would be it. Could you imagine how much trouble there'd be if Kansas decreed that electromagnetic waves are unholy sciency things foisted on their Christian populace by those satanic evolutionists, and that all electromagnetic waves must stop at the state border? Or if Mississippi assigned a certain chunk of the spectrum for emergency usage while Louisiana ruled that the same spectrum would be used for CB radios... of course the truckers would have to have 50 radios in their cab, or at least one for every state they drove in if each state required a separate license and/or approval.

Libertarians' answer to this one seems to boil down to "may the strongest transmitter win". Scientists' answer is spread-spectrum communication. I wonder where the latter has gone to?

Re:FCC's basis for regulation? (1)

hypnagogue (700024) | more than 6 years ago | (#21573131)

Article I, Section 8, Clause 3: "The Congress shall have power... To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;"

Like it or not, RF crosses state and national boundaries, and requires an enforced monopoly to be usable. Thus, the commerce clause applies.

get ready for big antennas (0)

Anonymous Coward | more than 6 years ago | (#21572523)

wavelengths (full 1/1) Wifi = 12cm Cell = 16cm 700Mhz = 42cm its like its back to the CB days with rubberducks and magmount car antennas

Re:get ready for big antennas (1)

SnowZero (92219) | more than 6 years ago | (#21573129)

When was the last time you saw a 1.8GHz cell phone with a 16cm antenna? Clearly whatever devices end up using the spectrum will use quarter wave or helical antennas.

High Stakes Poker (0)

Anonymous Coward | more than 6 years ago | (#21572527)

For a moment there, when I read the headline, I thought they found a table full of players with both huge money and a gaming habit like Guy Laliberté.

Re:High Stakes Poker (0)

Anonymous Coward | more than 6 years ago | (#21573835)

I thought it was the Casino Royale sequel.

so.. (5, Funny)

JustNiz (692889) | more than 6 years ago | (#21572599)

Bids are exclusively via the internet, and Google probably has enough smart people and resources to intercept a few packets from other bidders....

Re:so.. (1, Informative)

Anonymous Coward | more than 6 years ago | (#21573181)

You have that backwards - AT&T and Verizon have a significant portion of the Level 1 Internet backbone routes under their control - THEY could do what you suggest. Google is just an end-user of the system essentially. It's like the difference between a store on Main Street intercepting your mail to City Hall, and the US Postal Service doing it.

Re:so.. (1)

mweather (1089505) | more than 6 years ago | (#21574287)

Google is the only bidder that doesn't control any internet backbones.

Honest Question(s)... (4, Insightful)

skelly33 (891182) | more than 6 years ago | (#21572755)

Why don't they allocate the space to a certain communication technology with established rules for non-interference and then open it up any company to compete? (think wifi) Why should one company have a monopoly on a wavelength? (think broadcast TV/radio) With sophisticated and (relatively) inexpensive packetization and multiplexing available, is there any real need for single-operator wavelength allocation any more? This seems so... early 20th century.

Honest reply.. (1)

ari wins (1016630) | more than 6 years ago | (#21574273)

Not counting public access and whatever local church network(s) you can pick up, exactly how many broadcast tv channels do you get with a pair of rabbit ears?

Re:Honest Question(s)... (1)

lee1026 (876806) | more than 6 years ago | (#21574399)

TV and radio are probably the worst example you can come up with. Each station have its own wavelength, and it is not allowed to use any other wavelength.

Re:Honest Question(s)... (1)

Hoplite3 (671379) | more than 6 years ago | (#21574647)

With frequency hopping, this is absolutely possible. The tech was developed to prevent jamming, and it's now cheap to implement using software defined radios. Inexpensive devices could absolutely pick out one signal from all the cross-talk.

I could understand a single-operator-per-wavelength for an emergency spectrum. Keep the emergency equipment as simple as possible, sure. But open the rest of it up!

Well, I guess it'll never happen. There's too much money in the media monopolies and too much technical stupidity in everyone else... It's a shame that a good solution like freq hopping can't come along and democratize broadcast. It would combine the good features of current broadcast (high bandwidth, multiple destinations simultaneously) with the good features of then net (many many signals to choose from, no need to wait for the weather broadcast ...).

for my own bid (0)

Anonymous Coward | more than 6 years ago | (#21572905)

how much for the color "blue"?

seriously, i dont understand how this entire process can even take place. they are essentially bidding on exclusive rights to a color. why does the government even own the rights to it, to begin with?

Redundant (5, Informative)

sexconker (1179573) | more than 6 years ago | (#21573861)

How many times does this need to be asked?

The government owns the airwaves.
Whether or not you like it, it's true.

You SHOULD like it, though, because it ensures things WORK.
It keeps people from stepping on each other's toes, and it keeps our communications working.

But hey - lets open up the spectrum. Information wants to be free. It's working great for the internet.

Can you imagine what would happen if airwaves were open?

People would set up towers in their yards and rent the bandwidth to advertisers.
You'll be getting spam on every tv channel, radio station, and phone call.
Your existing devices will cease to function.
Air traffic control will be screwed.
Fire and Police departments will essentially be DOSd.
The military will have HUGE problems.

Legally, it tends to fall under interstate commerce.
Practically, it tends to fall under really freaking important.

People who say we should open it up and just use multiplexing / packeting / encryption really don't understand what they're talking about. If you allow people to openly use these frequencies, they will openly compete by cranking up the power. No amount of tricky signal manipulation will save you from some jerk with a bigger tower than you. If you want to send something from A to B, and someone builds a tower right in the middle, you're screwed.
And worse than that is the fact that, when they're money involved, people will crack encryption and circumvent other controls. Just imagine being able to hijack a TV broadcast during the commercials. You can replace the ads broadcast by the tv station with ads you broadcast, supplied by the same sleazy scum sending spam.

you are overstating the problem (1)

circletimessquare (444983) | more than 6 years ago | (#21574239)

it's not like you will just be listening to your favorite radio stat- V1AGRA HERBAL ENHANCEMENT!-ion and all of a sudden you will get th-I AM MFUNE NIFONGO AND I HAVE 2 MILLION DO-is sort of random interruption fr-BARELY LEGAL TEENS DO-om random broadcasters who ju-EARN 10,000 DOLLARS A DAY FROM HOME SELL-st want to turn a buck without any consideration for decorum or common sense. most people are reasonable, and just a little shame is all it takes to prevent asocial activ-GOATSE.CX GOATSE.CX GOATSE.CX-ity

Re:you are overstating the problem (1)

sexconker (1179573) | more than 6 years ago | (#21575353)

No, that's EXACTLY what will happen.
Remember pirate radio?
Remember how they drove around in listening vans and physically shut those people down?

To say that sleazy advertisers would not want to get in on a cheap broadcast medium that can reach millions, (like e-mail without spam filters) is ridiculous.

Re:Redundant (1)

scubamage (727538) | more than 6 years ago | (#21575231)

The government owns the air, as has been stated numerous times in surveillance cases. However, this does NOT ensure things work. If we wanted to ensure that things worked we'd have a cell phone system similar to Japan where the government constructs a series of towers operating on the same wavelength, and then allows the cell phone companies to compete for customers on these systems. It works, and it works really damn well. On top of that, all cell phones are compatible with one another, and can be swapped to and from providers at will (just swap the SIM card).

Hopelessly complex (1)

AtariDatacenter (31657) | more than 6 years ago | (#21573179)

I read just the PDF presentation with the rules, and it was absolutely crazy with minimum required bids, rounds, waivers, and everything else. What an extraordinarily complex procedure! Now I understand why Google hired some game theory experts on this!

I think Google will end up purchasing spectrum, but then sublicensing it out to others. Requires no additional build-out. I also have to think that Google is going to be the smartest about how they approach this auction. I'd love to see a post-mortem on the action!

Surviving the First Round (1)

Nom du Keyboard (633989) | more than 6 years ago | (#21573405)

Can Google survive the first round if they only bid the Reserve price? Hate to see them eliminated from the beginning.

Actually, I'd hate to see any of the incumbent telcos/wireless companies get their hands on this. I want a new competitor here.

Re:Surviving the First Round (3, Interesting)

bluemonq (812827) | more than 6 years ago | (#21573529)

There's more than one round. $4.6 billion is merely the minimum you have to be able to front in order to be allowed to bid in the first place.

Poker? (1)

jlf278 (1022347) | more than 6 years ago | (#21573607)

What does this have to do with poker? You can't swing a dead cat without hitting a poker analogy these days. You can't even turn on TV or go to the movies without seeing your favorite sitcom characters or James Bond on a bluff. Whatever happened to good ol' baccarat?

Re:Poker? (0)

Anonymous Coward | more than 6 years ago | (#21574699)

"Whatever happened to good ol' baccarat?"

People woke up and realized that baccarat is a boring game that requires very little skill* whatsoever, even in its most complex state, and that the only thing that kept it popular in the public imagination is that for the house to make any money at it, it has to be played at extremely high stakes. It was therefore perceived as a game for the ultra-wealthy, which naturally elevated it's status to mythic among common people.

Now that poker is played at the same stakes, baccarat will lose much of that status.

*Baccarat is a single draw game that permits typically one, or at most two opportunities to deceive per hand. In addition, stakes are chosen before the deal, so there is no opportunity to bluff with money to apply additional pressure.

There is a degree of skill in reading the other player, but it's influence on the result of the game is typically far less than almost any poker game. Even a poor baccarat player can often stay even with the very best for hours at a time. (This is a selling point if you want to keep wealthy people in your casino for long periods of time. Not to say you can't lose your bankroll in a few short moments, but it's a game that by nature, lends itself to very slow fleecing of the high rollers who play for entertainment instead of profit. )

google forecast (2, Interesting)

EverythingDies (1198239) | more than 6 years ago | (#21573689)

This is probably totally obvious to most:

The future of the internet is in mobile technology. Except for corporate, mission-critical operations, I think that the majority of internet/TV usage will be done from a mobile device. Even residential internet/TV access will probably be delivered wirelessly (to the premises). The high-speed internet Television market is already a ridiculously profitable area to be in and it will only grow larger. I already consider my internet connection to be almost as important as my other utilities, so I can only foresee the demand increasing.

However, entry into the high-speed ISP business is pretty much impossible. There's all that legal business over who actually owns the lines, regulated monopolies, etc. So what if all of the sudden a wireless medium became available that could reach anybody in any place? You no longer have to worry about laying your own fiber and other infrastructure. No longer do you have the expensive barriers to the ISP market. This is where I think Google wants to be. They already have ton's of content, now they'd have their own means to deliver it (and make you pay -- probably). They essentially want to be the one-stop shop for anything internet and probably TV (the line between the two is starting to blur). I'd switch to their service... although I wonder if they'd throttle the connections to Comcast's sites [slashdot.org] ;).

What will the government do with the money? (1)

compasseng (947192) | more than 6 years ago | (#21573867)

What are the government's plans for all of that money? Is that online somewhere?

The Spectrum Should Be Private Property (0)

Anonymous Coward | more than 6 years ago | (#21574315)

Experimental mock auctions (2, Informative)

SaltTheFries (738193) | more than 6 years ago | (#21574419)

I did a bunch of experimental mock auctions as part of a college experimental economics lab. The rules for the auction aren't too difficult or different from many of the auctions that I participated in.

Here's my opinion on some of the rules and their effects:
1) Package bidding (where someone can bid on a group of licenses and wins or loses all the licenses) -- this helps the large, national bidders that see synergy from owning a number of regional licenses. As the minimum required bid for individual licenses fluctuates due to other individual and package bids, a package spreads the cost over the whole set and makes individual breakthrough bids more expensive / challenging. Size and structure of packages allowed can change the dynamics of the bidding process quite dramatically.
2) Activity requirements -- makes sure everyone is bidding or dropping out. The amount you can bid in one round depends on the amount you bid (or were winning) in the previous round. Google can't snipe the whole auction with a $10 bln bid after not making a single bid beforehand. Activity can strongly favor the big players as they can push around smaller players with large package bids while the small bidders are only making very high single or small package bids. Nobody should stop bidding on anything until it becomes clearly unprofitable to do so--activity crucial to securing winning package bids. There was a 100% use-it-or-lose-it activity requirement in the auctions I participated in, but these rules are similar and gross bid oriented vs. license oriented.
3) Bid retraction -- creates a strange second phase of the auction where some bidders pull bids to get packages to shuffle in their favor. There was a penalty for doing so on winning bids, and I remember some people losing money on this or not making much at all due to it. No professional will make that mistake, but the FCC isn't being generous here.
4) Bid incrementing -- nobody can open or continue the bidding with a massive bid compared to the current minimum required bid. This is important as it prevents someone from throwing out a profitable but discouragingly large bid. I started doing this, particularly when I was a national or powerful regional bidder. There's a name to this strategy that I discovered after the fact.

My prediction on who wins:
The big players -- AT&T, Verizon, maybe Google
A few regional powerhouses might crop of here or there, particularly in more rural regions of the country -- Alltel
The FCC / US Government -- pulls in billions of dollars.

Who loses:
Smaller national players -- Sprint, T-Mobile (unless the Germans want to go for broke)
Cable companies -- their dreams of breaking into wireless data and telephony will die, unless they cut a deal with Google or one of the smaller and more desperate wireless carriers (above). I'm not sure if there's any way that syndicates can form to bid, but that or an after-the-fact deal with Google may be their only hope. If Sprint pulls a coup and wins a major bid, it'll be desperately strapped for cash that Cox, Comcast, et. al. has to offer, but Sprint's going to have trouble winning much spectrum.
          Ken Martin's a telco lobbyist, looking to exact revenge on the cable companies for their success in stealing phone and broadband customers from his patrons. I don't claim that it's why the auction is structured this way, but it's clear that nobody went out of the way to encourage diversity in the ownership of different regional licenses.

Unknown:
American wireless consumers? Somebody has to pay for these astronomical bids, and the auctions operate like a tax in some senses. You can see the difference between a spectrum-tax free environment and a taxed environment by comparing 2.4 ghz with 1.9 ghz cell phone service. A little of this range could allow some exceptional innovation to come about.
The EM spectrum in this country is the property of the general public, not the FCC, regardless of how the FCC behaves.

Cool! A Minnie Driver/Anne Hathaway love scene. (1)

Impy the Impiuos Imp (442658) | more than 6 years ago | (#21574613)

> Participants will use an Internet system to enter bids

Clueless Government Employee: "Wow! Bidding is up to 39 trillion dollars! It's a real battle between 'kcusu' and 'asdfjlsdf' !"

When will the US Government realize... (1)

dkarma (985926) | more than 6 years ago | (#21575277)

that they have no authority to control the air???
The FCC is an illegal immoral cabal.
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