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Spectrum Auction Could Be A Game of Chicken

Zonk posted more than 6 years ago | from the who-will-blink-first dept.

Cellphones 193

Ardvark writes "Google promised some time ago to bid at least the reserve price for the C block of 700Mhz spectrum if the FCC accepted its demand for an open access rule for devices using the band, which the FCC did over Verizon's objections. If the reserve price is not met the rule will be dropped and the block re-auctioned. It appears now that bidding has stalled just short of the reserve price. It's assumed that Google has no interest in becoming a cell phone company and with a recession looming the 700MHz spectrum now seems worth a whole lot less. If Google's strategy was to force the bidding above the reserve but still lose the auction, Verizon could be calling their bluff, threatening them to live up to their word and buy what to Google could be the equivalent of a $4.6 billion 'doohickey.'" Update: 01/31 16:01 GMT by Z : And just like that, the plot thickens: the C block has hit the reserve price during bidding.

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Buy it google... (1)

Kjuib (584451) | more than 6 years ago | (#22246468)

and donate it to the poor and homeless... then they could use the internet to find jobs and houses for sale... ~

too bad (2, Interesting)

TheMeuge (645043) | more than 6 years ago | (#22246592)

Too bad there are no jobs, and the houses are way too expensive.

Virtually all middle-class job fields are either stalled, or firing... and as far as the real estate market goes, here's a story.

In 1995, about 50% of Nassau county (Long Island, NYC metro area) residents could afford to purchase the homes they were living in, given market price. In 2005, that number was down to about 5%. Yes, we have had spectacular success in destroying the middle class. At least they're scared of being poor, so they keep on working.

As George Carlin noted (albeit a hyperbole): "The middle class pays all the taxes, and does all the work. And the poor are just there to scare the shit out of the middle class".

Re:too bad (2, Interesting)

SQLGuru (980662) | more than 6 years ago | (#22246778)

Housing is still affordable....just not where you want it to be. Go look at "rural small-town America" and you can find plenty of houses under $150k (what I consider to be the criteria for affordable to most people, but YMMV). With telecommuting becoming more popular, why would you care if your job was three cities away? Sure, there aren't any cool trendy hot spots nearby, but you can afford to live and eat.

Layne

Re:too bad (5, Informative)

Anonymous Coward | more than 6 years ago | (#22246914)

Housing is still affordable....just not where the jobs are.
Fixed a typo for you.

Telecommuting just isn't all it's cracked up to be.

Re:too bad (1)

MBGMorden (803437) | more than 6 years ago | (#22246978)

Telecommuting isn't an option for a lot of people, and due note that the jobs in those areas where the houses are $150k are also paying correspondingly less. Hell where I'm at you're considered VERY well paid at $60,000 per year (I'm at $43,000 per year and I'm still considered by most locals to be fairly well paid). $100k+ and you're considered rich here. The houses are down around $125k-ish, but that's still a huge chunk of change to the local populace (and for me personally. With student loans to finish paying off and car/gas/etc to take care of, I'm pretty much stuck in an apartment for another 5-6 years).

Re:too bad (2, Informative)

homey of my owney (975234) | more than 6 years ago | (#22247348)

CNBC is now reporting the reserve has been met.

Re:too bad (0, Redundant)

everphilski (877346) | more than 6 years ago | (#22247804)

Where do you live? and what field?

Seriously, I'm curious.

Re:too bad (0, Offtopic)

hardburn (141468) | more than 6 years ago | (#22247418)

Telecommuting generally means fast, stable Internet access, which many of those small communities don't have.

Re:too bad (0, Offtopic)

somersault (912633) | more than 6 years ago | (#22247668)

It also requires certain types of job. You can't weld or make sandwiches via the internet.. well without specialised equipment. Even as an IT worker who is primarily doing coding right now, I can't telecommute because I still have to do the odd IT support job occasionally (which I could just talk people through or do via Remote Assistance I guess, though I still think asking if I can telecommute is going too far, and I'd probably end up really lazy and just work from my bed :p ).

Re:too bad (1)

Nullav (1053766) | more than 6 years ago | (#22247802)

With telecommuting becoming more popular, why would you care if your job was three cities away?
But you'll have to make a case for hiring you, rather than someone two cities over, someone three miles away, or someone in another country with a lower minimum wage.

Re:too bad (1)

mortonda (5175) | more than 6 years ago | (#22247518)

As George Carlin noted (albeit a hyperbole): "The middle class pays all the taxes, and does all the work. And the poor are just there to scare the shit out of the middle class".
I know the author of this link may not be popular in the crowd, but this Rush Limbaugh article [rushlimbaugh.com] disputes the claim that the middle class pay all the taxes. He has several other years' figures on the site too, with attributions. Got any proof otherwise? I'd love to know otherwise. The numbers seem to indicate that it's not the middle class that pays all the taxes, but the "rich".

Re:too bad (3, Informative)

Retric (704075) | more than 6 years ago | (#22247860)

I like how he used Income Taxes implying that that's where the US government gets most of its revenue. Note: Social Security at $544 billion / year is not part of the IRS's Income tax numbers and it's mostly paid by those making 100k or less each year.

The share of total income taxes paid by the top 1% of wage earners rose to 34.27% from 33.71% in 2002. Their income share (not just wages) rose from 16.12% to 16.77%. However, their average tax rate actually dropped from 27.25% down to 24.31%

So the rich 1% pay 34.27% the middle class pay ~96.54% - 34.27% = 62.27% of income taxes and the middle class also pays 500 billion for Social Security and most property, excise and sales taxes.

So yes if you look at all the numbers the middle class is paying most of the taxes.

Re:too bad (4, Insightful)

Brad Eleven (165911) | more than 6 years ago | (#22248412)

There's just one problem with that data: it's based on the top 1% of wage earners . The wealthy do not earn wages. It is my opinion that wage earners define the middle class, although the notion of class distinction in a democratic Republic is open to interpretation.

For that matter, any assertion involving the term "middle class" is open to interpretation.

It's not so much that Limbaugh isn't popular with technically-minded people, it's that he is not nearly as interested in facts as he is in attention. He himself has admitted as much. He makes money by remaining popular, by inciting listeners to excitement. That's the stock in trade of talk radio: Current events plus interpretation with a clear agenda, designed to leave you feeling a certain way.

There's nothing wrong with choosing that flavor of entertainment. The problems crop up when you begin to use data from an entertainment source as fact. For example, I thoroughly enjoyed Michael Clayton [imdb.com] , but if I wanted facts about corporate crime, I'd look elsewhere.

If Limbaugh inspires you, great. Inspired people move things forward. One of our biggest problems lately is that the inspired don't step out and think for themselves. My recommendation is that you maintain the distinction between entertainment and news. Get your facts from a reliable source, i.e., from a different source than your inspiration.

If you like thinking for yourself, that is. If you'd prefer to just listen without asking any questions, go right ahead. Just don't expect anyone who isn't plugged into the same source to treat you with any respect.

Re:too bad (1)

ajs (35943) | more than 6 years ago | (#22247594)

Too bad there are no jobs
My company has tripled in size over the last 2 years.

and the houses are way too expensive.
Depends on your definition. Prices have come down, but living within the limits of a city is still a luxury for most. I do it, but the price I pay is that I live in a tiny house next to an auto-body repair garage (nice guys, it turns out).

Virtually all middle-class job fields are either stalled, or firing
I know someone who is out of work. December was dead (as it typically is), but January has been one interview after another.

... and as far as the real estate market goes, here's a story.

In 1995, about 50% of Nassau county (Long Island, NYC metro area) residents could afford to purchase the homes they were living in, given market price. In 2005, that number was down to about 5%.
Define "afford to purchase."

I could have purchased the house I was in in 1995, but it would have been a huge burden in terms of mortgage payments.

Re:too bad (4, Interesting)

everphilski (877346) | more than 6 years ago | (#22247870)

My company has tripled in size over the last 2 years.

Yeah. People throw their hands in the air over this incoming recession, and sure the stock market is having some problems, but so many areas of this country are still doing well. The company I'm working for is hiring like mad (any aerospace engineers looking for work? let me know). Within my house, which used to be out in the country surrounded by fields, there are no less than five new housing developments that sprung up in the last year ... and yes, they are still being constructed. For all the doom and gloom, business is booming in my world.

(and "recessions" aren't all bad ... the corrections that are made often empower people to get lower interest loans, refinance debt to pay it off quicker, and often provide incentives to allow for businesses to grow)

Re:too bad (1)

ajs (35943) | more than 6 years ago | (#22248144)

My company has tripled in size over the last 2 years.

Yeah. People throw their hands in the air over this incoming recession, and sure the stock market is having some problems, but so many areas of this country are still doing well.
True enough, and even the stock market isn't doing all that bad. Look at . Look at [yahoo.com] the S&P 500 over 5 years [yahoo.com] . We're seeing a sharp correction, but it's not like we're even returning to 2005 levels, much less earlier. You get a much clearer view when you look with some historical perspective (which the news media rarely does these days). Look back at the S&P 500 since 1950 [yahoo.com] and you'll see what an amazing market run we've had and continue to have.

Re:too bad (1)

Paradox (13555) | more than 6 years ago | (#22248126)

Too bad there are no jobs, and the houses are way too expensive. . . . Virtually all middle-class job fields are either stalled, or firing...

I dunno where you are, but there are plenty of webdev and software development jobs where I am. To the point where recruiters still assail me for larger businesses and I get emails from contacts about startups. Lots of entry-level webdev work exists, with a mean pay of around $55k/yr. For people willing to acquire these skills (and not everyone has to be as good as Airbag or Happy Cog), these jobs are available and often allow frequent remote work and benefits.

America's economy is gradually changing, moving away from physical manufacturing to data manipulation. We're certainly primed for it, Computers are cheap and powerful (when it's cheaper to buy a computer on a low dollar than a high euro, you can safely say computers are very inexpensive in the US) and reasonably good internet access can be afforded in most places in the nation. There is a ton of information online on how to do the work, and lots of professionals share their experience routinely.

The startup activity in the Valley has slowed a bit, but certainly hasn't stopped. Nor is there a dearth of money being invested right now (to the contrary, it seems like people are almost eager. I suspect with a weak dollar this makes more sense, but I am not sure how that all works out in the end).

Yes, America's economy is suffering right now, but it's also in the process of changing and reorienting to focus on things that Americans are in a better position to do right now. Hopefully we can make our education system realize this and make sure it educates our children on how to work within this market.

In 1995, about 50% of Nassau county (Long Island, NYC metro area) residents could afford to purchase the homes they were living in, given market price. In 2005, that number was down to about 5%. Yes, we have had spectacular success in destroying the middle class. At least they're scared of being poor, so they keep on working.

And as for housing, we haven't "destroyed the middle class." We've just overvalued housing. That is now correcting itself (you can only lie to your money for so long), and housing prices will approach a more appropriate market value and the "middle class" can afford to buy them again.

Re:too bad (1)

Shakrai (717556) | more than 6 years ago | (#22248400)

And as for housing, we haven't "destroyed the middle class." We've just overvalued housing. That is now correcting itself (you can only lie to your money for so long), and housing prices will approach a more appropriate market value and the "middle class" can afford to buy them again.

Umm, yeah, I don't know where you live, but I don't think the housing bubble has a whole lot to do with the situation that the GP was talking about in Nassau county. Housing prices in and around New York City have always been higher then the national average. It's a win for you if you want to sell your house and move somewhere else, but for those that want to remain in the community it becomes pretty tough -- even if your house is completely paid for you might find that you can't afford your property taxes anymore.

I have family on the island that have encountered this first hand. It completely sucks to be priced out of the neighborhood that you grew up in because of factors beyond your control.

UK 3G (5, Interesting)

SimonGhent (57578) | more than 6 years ago | (#22246482)

I'm not surprised that US companies aren't falling over themselves to bid.

Take a look at what happened in the UK when the 3G air was up for sale - they threw money at it and ended up with next to no customers.

With the way things are economically at the moment, people are not looking to up their monthly spend on their mobile phone bill. Companies will have a hard time recouping a huge outlay.

Short term/Long term (0)

Anonymous Coward | more than 6 years ago | (#22247040)

In a world where we've only *begun* to tap the potential for wireless digital connectivity, I can hardly believe that 'owning' some spectrum could, long term, be a money loser (I mean, I suppose it could be if you paid far more than you could ever, ever hope to get out of customers). Short term, sure.

I guess the main question is, when the FCC auctions off spectrum, what is the duration of the license? If it's more than 10 years, whoever buys it will likely be making money long after the current recession is over and forgotten. And, because we're in a recession right now, they may actually be getting the spectrum at a bargain price (particularly if reserve is not met, and they re-auction the license at a cheaper price, without the open access requirement [so that companies can turn the thumbscrews and make more cash]).

Don't get me wrong, I hope the reserve is met, and the open access requirement is there. But I'm not holding my breath.

Re:Short term/Long term (2, Insightful)

jandrese (485) | more than 6 years ago | (#22248004)

More importantly, the Spectrum is a limited resource. Even if you can't capitalize on it, you can be sure that someone in the future will want to use it, especially these bands with favorable RF propagation.

The problem with 3G isn't the band it is in, it's the fact that the hardware is still expensive and power hungry, which makes it less than ideal for the intended purpose of being used in smartphones. Give it a few years and you'll likely see considerable growth on that chunk of the spectrum as the chipsets improve and people grow more data hungry (and they always grow more data hungry).

Re:UK 3G (1)

jo42 (227475) | more than 6 years ago | (#22248264)

It's like buying a house these days in North America. You hope some sucker, er person, will pay you more for it than you did.

Google: smartest guys in the room (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#22246484)

More money than brains. Now we know why their stock is so high.

DUNT BEE TEH EVEL!!!11!1... unless a government asks us to.

Clever (4, Interesting)

TheMeuge (645043) | more than 6 years ago | (#22246522)

The telecoms can take the heat for being heartless monopolies, for providing terrible service at a high price, and for leveraging their monopolies to avoid upgrading their taxpayer-financed infrastructure.

They can't, however, be accused of not doing what will profit them the most in the short term.

In this case, they've collectively called Google's bluff. I don't see Google having $4.6B in spare cash, to purchase the spectrum they have no idea how to make money on. This is a tough spot for Google, because not only do they stand to lose their coveted "shared spectrum" rule, but they also stand to lose much of their perceived invulnerability on the market.

Re:Clever (1)

bleh-of-the-huns (17740) | more than 6 years ago | (#22246670)

In addition to the possibility of losing open access as well. It was a smart move by Google, call it what you will, but from my perspective, bidding the minimum in hopes that you will be outbid (which obviously has not occurred), which will result in Google losing the spectrum to the winner, but still being able to freely use the spectrum was genius.. okay maybe not genius, but a good business move on their part. Call it spectrum poker (I think I will trademark that reference :) ), Googles hand is about to be called (the auction is technically not over yet, so something may still happen).

Personally, whoever gets it, I could care less except if it is Verizon.. with the exception of FIOS (which has its own share of issues), everything Verizon touches turns to shit and they butcher it....

Re:FIOS (5, Interesting)

TheMeuge (645043) | more than 6 years ago | (#22246736)

FIOS isn't "good" because it's a good service. FIOS is only "good" because this is Verizon's final "fuck you" to the taxpayers that helped fund its infrastructure, and an open attempt to become a totally unregulated monopoly. You see, they HAD TO lease the copper lines, because FCC mandated it. They don't have to share the fiber optics. As a result, they've been busy building the fiber network that would cement them as a monopoly, while completely ignoring troubles with their copper... leveraging the reduction in the quality of service over the copper lines, to attract people to the fiber.

Re:FIOS (4, Interesting)

bleh-of-the-huns (17740) | more than 6 years ago | (#22246916)

The reason they had to lease the copper, was the original copper infrastructure was gov subsidized. The fiber costs are being eaten completely by Verizon, and while I am sure there are some tax breaks involved, there is no subsidy from the gov, state or local. Surprisingly though, the service itself is great, I have had very few problems, (yes there are some that had horrible installs and could never get some things working), the only issue I have is with the billing department which I have to call every month to get the appropriate triple play discount credited to my account since their system keeps losing it, and their CS.. it is abysmal and thats me being nice to them. The install actually was pleasant, and its not subcontracted like comcasts installers, they get paid hourly, not by the number of jobs they get done, so whether they do 5 installs in a day, or spend all day at your house rewiring your internal cable infrastructure, they get paid the same.

Re:FIOS (1)

Tassach (137772) | more than 6 years ago | (#22248010)

Even Verizon paid for the fiber itself, it still runs over (and under) public land and right-of-ways, giving the government a legitimate right to regulate how they can use it.

Re:FIOS (1)

Conception (212279) | more than 6 years ago | (#22248032)

I think people forget that in the 90s, the Telcoms were pretty heavily subsidized so that they could, in fact, replace the fiber infrastructure. This is just a the first, probably biased, link I could find on the topic:

http://www.tispa.org/node/14 [tispa.org]

Re:FIOS (1)

Firehed (942385) | more than 6 years ago | (#22248226)

Where do you think the money that's paying for the fiber came from? I don't suppose it could be from the profits seen from the subsidized copper...

It may be a good service (and believe me, if it were available where I lived, I'd have it), but the money being used comes as a result of the initial copper wiring subsidy. Had they never had the copper subsidized, they could have never come up with the profits to build the fiber infrastructure.

Re:FIOS (1)

mOdQuArK! (87332) | more than 6 years ago | (#22248608)

The fact that they get special permission, waivers & easements from the various municipalities to run that fiber through peoples' neighborhoods (including peoples' yards in some cases) is a subsidy in itself. If they were truly paying for everything, then they'd be writing checks to the people whose property they're tearing up to put that fiber in.

Re:Clever (0)

UbuntuDupe (970646) | more than 6 years ago | (#22246968)

Correct me if I'm wrong, but

-Google holds a lot of cash.
-Google could easily raise cash by issuing new shares or "Gbonds" at favorable prices.
-Having the spectrum allows Google to do an end-run around net neutrality violators.
-Having a non-evil company own the spectrum would allow American cell phones to catch up with the rest of the world: No nickel-and-dime-ing on everything you want to add to your cell phone (like ring tones), compatibility with ATMs, cheap internet access anywhere, etc.

Re:Clever (3, Informative)

neurovish (315867) | more than 6 years ago | (#22247102)

Google is sitting on about 5 billion in cash as of last September, while Verizon has about 700 Million.
Google: http://finance.yahoo.com/q/bs?s=GOOG [yahoo.com]
Verizon: http://finance.yahoo.com/q/bs?s=VZ [yahoo.com]

From a cash perspective, google looks in much better condition to go on a $4.6B shopping spree.

Re:Clever (1)

nelsonal (549144) | more than 6 years ago | (#22248258)

Verizon could borrow many times google's cash balances much easier than Google could borrow money. Bond holders are exceedingly conservative (to the point they might consider Microsoft a good credit).

Re:Clever (1)

TubeSteak (669689) | more than 6 years ago | (#22248734)

In this case, they've collectively called Google's bluff. I don't see Google having $4.6B in spare cash, to purchase the spectrum they have no idea how to make money on.
Translation:
TheMeuge (645043) has no idea how Google would make money on the next big thing in wireless

http://investor.google.com/releases/2007Q3.html [google.com]
As of September 30, 2007, cash, cash equivalents, and marketable securities were $13.1 billion.
(I'm not sure how much of that cash went towards the $3 billion they dropped on DoubleClick.)

If Google wants to blow $5 billion "to purchase the spectrum they have no idea how to make money on" AKA "the next big thing in wireless", I highly suspect they can afford to do so.

Re:Clever (1)

yog (19073) | more than 6 years ago | (#22248758)

The telecoms can take the heat for being heartless monopolies, for providing terrible service at a high price, and for leveraging their monopolies to avoid upgrading their taxpayer-financed infrastructure.

They can't, however, be accused of not doing what will profit them the most in the short term.

In this case, they've collectively called Google's bluff. I don't see Google having $4.6B in spare cash, to purchase the spectrum they have no idea how to make money on. This is a tough spot for Google, because not only do they stand to lose their coveted "shared spectrum" rule, but they also stand to lose much of their perceived invulnerability on the market.
I don't quite follow your reasoning. Having its own national slice of broadband would be terrific for Google. This 700Mhz band would be a great thing to own--penetrates walls really well, wide area networking potential is great. Google could lease its bandwidth to hundreds of startup wifi phone providers and give established companies like Vonage and Skype a nice alternative pipeline.

Can you imagine what a cheap or free search-ad supported wifi network would do to the existing local monopolies? Skype running on 700 Mhz gPhones would blow everything else out of the water. God, how I would love to get away from cell phone contracts, $40+/month charges, extra $0.40/fraction of a minute when I "exceed the limit", not to mention so-called local phone service with all its limitations.

Having Linux and an open API on these phones would be icing on the cake.

Yeah, it would cost some money up front, but long term it would be a real cash cow for the company. Verizon, Cox, Comcast et al should be getting a little scared right now. Google was not taken all that seriously early on, and later we see columnists writing about how they "should have" bought some GOOG at the IPO. Today it's a $171 billion colossus. They have the money to buy this band and they have the technical know-how and vision to turn U.S. telecom industry on its head.

Go, Google! I hope they win.

Nah . . . (5, Funny)

MBGMorden (803437) | more than 6 years ago | (#22246578)

I bet they're just waiting. 30 seconds before it ends all their auction sniper programs will bid it up another 30%.

Re:Nah . . . (2, Interesting)

terraformer (617565) | more than 6 years ago | (#22247256)

You know, I thought the same thing (and yes, I know you were joking, but I think you are on to something). I have observed some other FCC auctions and they have a more regular pattern of bidding but I would not be surprised if the eBay sniper approach is being played here. There is a great deal of uncertainty and this may be a way to try to hedge and keep the bidding low.

Re:Nah . . . (0)

Anonymous Coward | more than 6 years ago | (#22247324)

It's modded as funny, but I think there's more truth to this than you realize.

Check out the FCC auction yourself! (5, Informative)

acherrington (465776) | more than 6 years ago | (#22246594)

First, go here https://auctionsignon.fcc.gov/signon/index.htm [fcc.gov] Then put in Auction number 73 under public access... then click go. According to this, they are at a total of $11.5 billion now for the total... next round starts in ten minutes.

Re:Check out the FCC auction yourself! (1)

dasbush (1143709) | more than 6 years ago | (#22246838)

Watching the bidding live for Round 17...
Paraphrase...

PWB Ammount: $4,294,397,000 Minimum Bid for Round 17: $4,713,823,000
So if no one makes that bid in the next, oh, one minute, then Google's plan is toast?

Re:Check out the FCC auction yourself! (1)

darthflo (1095225) | more than 6 years ago | (#22247688)

No, X has bid $4'294m in round 13 and nobody cared to overbid them in rounds 14 to 16. In 17, the minimum bid to beat X was $4'713m, coincidentally also the first minimum bid to be greater than the $4.6b reserve price. After Y's bid of $4'713m in round 17, the license will go to Y unless Z, X or any other bidder decides to bid the minimum bid in any subsequent round (e.g. $5'271m for rd. 18).

Re:Check out the FCC auction yourself! (1)

Hobbex (41473) | more than 6 years ago | (#22246862)

Well, round 17 didn't end, and the bid for the C block didn't change.

Re:Check out the FCC auction yourself! (1)

Ed Avis (5917) | more than 6 years ago | (#22246940)

$11.5G is for all of it, the C spectrum is only part of that. But according to TFA it has reached $4.3G, which is only 300M off the reserve price. If Google is forced to buy it for the reserve price presumably they could resell it to the second-highest bidder for $4.3G (or at least, negotiate with them for an acceptable price) and they wouldn't lose the whole amount.

Re:Check out the FCC auction yourself! (4, Informative)

HogGeek (456673) | more than 6 years ago | (#22246958)

New bid, just went to $4,713,823,000...

Open Access is good to go!

Re:Check out the FCC auction yourself! (2, Interesting)

keithjr (1091829) | more than 6 years ago | (#22247468)

Finally some good news! Too bad it's still anonymous. I'd love to know who broke the barrier.

Why is Verizon so against the concept of a 700MHz open network when they've stated that they're going to open up their own network [arstechnica.com] some time this year?

Re:Check out the FCC auction yourself! (1)

coolGuyZak (844482) | more than 6 years ago | (#22248328)

It's speculated that Verizon did that to divert consumer attention from the 700 MHz auction. Presumably, they'd like the ability to close "their spectrum" if opening it becomes disadvantageous.

Re:Check out the FCC auction yourself! (1)

squiggleslash (241428) | more than 6 years ago | (#22248614)

They're not against an open 700MHz network, they're against being required to keep it open, on the grounds that they want the ability to go back to being a much of control freaks again in the event that the next group of idiot CEOs decides they think closed networks are "where it's at."

Re:Check out the FCC auction yourself! (1)

MBCook (132727) | more than 6 years ago | (#22247484)

Seeing as that happened, I wonder if that section will now see tons of bidding (they don't have to worry about making it free, it's already there) as companies try to get (some) control over it, or will bidding be mostly dead since the companies lost their (theoretical) game of chicken and now they have to comply with open access rules... making it less profitable (in theory) to buy?

Re:Check out the FCC auction yourself! (0)

captnjameskirk (599714) | more than 6 years ago | (#22247032)

Round 17 complete and we're at $12.8 billion with 214 qualified bidders. WTF! I thought there were only a dozen or so bidders, at least that's what the media has been leading us to believe. But now there are over 200? This thing is going through the roof, the submitter didn't do his homework very well.

Re:Check out the FCC auction yourself! (1)

Compholio (770966) | more than 6 years ago | (#22247116)

This thing is going through the roof, the submitter didn't do his homework very well.
My understanding is that some blocks have less qualified bidders than others, I think it's pretty obvious that the "C" block has only got one or two bidders. Who should have done their homework better was the NYT, since all they would have had to do was wait for the next round of bidding ended. Oh, that's right - they don't care about reporting news, as long as they can speculate about it and run Google's name through the mud so they can sell papers.

Re:Check out the FCC auction yourself! (1)

darthflo (1095225) | more than 6 years ago | (#22247808)

Of those 214 bidders only very, very few are going for the tweleve C range licenses. There's also a nationwide D license (some $500m) and tons of local A, B and C licenses (some of which haven't even passed the $100k mark). Neither The Man nor The Media was trying to hide this from you, it's newsworthiness just pales in comparison to a multi-billion dollar bid from Google.

Google will not let us down. (4, Funny)

LWATCDR (28044) | more than 6 years ago | (#22246620)

I trust Google will not let us down. They are just waiting to see if they can get it for 4.6 instead of 4.7 Billion.
And then when they get it they will build out a solar powered wireless network that will offer broadband everywhere. Not only that it will be free and be faster than FIOS. It will be IPv6 so every user can have their own block of static IPs and it will smell like home made cookies and be as warm as a puppy.
Yea that is it.

Re:Google will not let us down. (1)

bhima (46039) | more than 6 years ago | (#22246682)

What about the Pony? Surely this comes with a pony.

Re:Google will not let us down. (1)

bleh-of-the-huns (17740) | more than 6 years ago | (#22246792)

I only want an Apocalypse Pony [photobucket.com] :)

Re:Google will not let us down. (1)

techpawn (969834) | more than 6 years ago | (#22247432)

Deaf pony? Oh... The poor dear can't hear...?

Re:Google will not let us down. (2, Funny)

um_atrain (810963) | more than 6 years ago | (#22246824)

Can't come with a pony. They can't be powered of solar power. Sorry to disappoint you. Would you like a complementary pink hairbrush?

Re:Google will not let us down. (1)

MBGMorden (803437) | more than 6 years ago | (#22246890)

Ponies ARE indirectly solar powered :). Solar collectors (aka plants) absorb and store energy, ponies consume said energy :).

Re:Google will not let us down. (0)

Anonymous Coward | more than 6 years ago | (#22247012)

And so is my hummer.

Re:Google will not let us down. (1)

darthflo (1095225) | more than 6 years ago | (#22247844)

Except your Hummer craves Brawndo which has Electrolytes!
Also, your Hummer wins at crushing ponies.

Re:Google will not let us down. (1)

Yvanhoe (564877) | more than 6 years ago | (#22246946)

Could they not buy it 4.7 billions and reselling it cheaperto a cell phone company afterwards ? That way they would have opened a protocol for a small sum.
They could as well make a 6 billions package and buy a small cellphone company for the 1.3 billion that's left...

Re:Google will not let us down. (0, Redundant)

Lumpy (12016) | more than 6 years ago | (#22247002)

Then they are screwed, it's already over 12 billion.

Dr. Evil has nothing on the telcos.

Game Theory? (3, Interesting)

jwietelmann (1220240) | more than 6 years ago | (#22246698)

Whatever Google is maneuvering to do, they're probably more likely to employ the kind of people who know how to play the game than Verizon is. Whatever Google is trying to achieve, my money's on them. (Well, not really; I don't have any GOOG shares.)

Re:Game Theory? (-1, Flamebait)

Anonymous Coward | more than 6 years ago | (#22247924)

>Whatever Google is maneuvering to do, they're probably more likely to employ the kind of people who know how to play the game than Verizon is.

A web search company versus a telecom company? Your statement is the most idiotic thing I've seen all day.

Did! Did Not! (4, Interesting)

Nom du Keyboard (633989) | more than 6 years ago | (#22246796)

the FCC did over Verizon's objections.

The article summary is garbage, or should I say simply wrong?

Google set 4 conditions it wanted to see. The FCC agreed with 2 of them, so Google is faced with half a glass. (Yes I know the Engineer's view of half a glass.) I don't recall them saying they'd bid reserve to ensure only half of their wishes.

Release it! (1)

qwertphobia (825473) | more than 6 years ago | (#22246822)

If Google wins, and they don't know what else to do with it, I think they should release their block of the 700 MHz bandwidth under the GPL.

RMS would be so happy!

Re:Release it! (1)

Dread Roberts (1230562) | more than 6 years ago | (#22246954)

Um yeah, because you can copy or modify a MHz and re-release it...?

Re:Release it! (4, Funny)

Mr. Underbridge (666784) | more than 6 years ago | (#22247048)

If Google wins, and they don't know what else to do with it, I think they should release their block of the 700 MHz bandwidth under the GPL.

It would be worth it just to see approximately a million dorks have their heads explode as they endlessly debate what it means to copyright bandwidth.

Re:Release it! (1)

squiggleslash (241428) | more than 6 years ago | (#22248646)

Oh, I'm just waiting for Theo to come in and demand Google release it under the BSD license, accusing the Google people of being "inhuman"...

Trading one for the other (-1, Troll)

Anonymous Coward | more than 6 years ago | (#22246872)

I find it stupid that they would actively try to get rid of one form of wireless communication because it's obsolete (TV) and turn right around and use it on another. Sure, different purpose, but why not just give it up and stop having so much goddamn garbage being broadcast everywhere? That can't be good.

Wireless is a flawed technology anyway. Goddamn cell phones hardly ever work right, and wireless networking is fraught with problems regardless of how much people advocate it because it's "convenient".

Give me a fucking wire any day. This wireless bullshit is not progress, it's a march straight back into the days of rabbit-ear antennas.

Re:Trading one for the other (0)

Anonymous Coward | more than 6 years ago | (#22247950)

Move. Wherever you live sounds like a very badly sucking place. Move to europe, you'll like 99% of all inhabited areas having cell phone coverage. You might also like ever-expanding 3G availability. Actually, screw that. Move to Singapore or Taiwan. High-speed cell networks everywhere and 100 mbps ETTH. It's like a Googleplex made into a city. Except you gotta pay for food.

when the usa purchased alaska from russia (4, Insightful)

circletimessquare (444983) | more than 6 years ago | (#22246880)

they called it "seward's folly"

it was a joke. why did we spend $7 million on some permafrost again?

same with anyone who doubts the value of this auction

i can't see why a monopoly on a prime band of communication spectrum can't be anything but pure gold. there's only so much spectrum, but more and more people and more need for communication tech every day

Re:when the usa purchased alaska from russia (1, Offtopic)

smadasam (831582) | more than 6 years ago | (#22247408)

what do you mean again?

Re:when the usa purchased alaska from russia (4, Interesting)

EvilNTUser (573674) | more than 6 years ago | (#22247906)

same with anyone who doubts the value of this auction

i can't see why a monopoly on a prime band of communication spectrum can't be anything but pure gold. there's only so much spectrum, but more and more people and more need for communication tech every day

The auction is a gigantic tax and nothing more. If the markets are efficient, the winning company will be rewarded only related to the risks it is taking. Everything else will be going to the government, and out of the pockets of consumers.

It's laughable how the auctions are being sold as a good way to raise funds for the government without impacting the taxpayer. Who doesn't use communications technology if not the taxpayer? This is the perfect way to cripple a single industry, because a) the winning company will have less immediate funding available for infrastructure b) consumer prices will be much higher, lowering the adoption rate significantly.

Just look at what happened in Europe. A lot of countries did the smart thing and gave the spectrum to the companies that were willing to guarantee the best service levels for the cheapest consumer prices, but then a few large countries ruined it for everyone by suckering companies into auctions. (To be viewed as a serious competitor, you had to take part in the largest markets.) The end result was what I described above, and we are only now starting to recover.

If you think that the beauty contest model will result in excessive profits for the winner, keep in mind the guarantees, and the fact that one winner wasn't awarded all the spectrum.

Re:when the usa purchased alaska from russia (1)

uigrad_2000 (398500) | more than 6 years ago | (#22248094)

i can't see why a monopoly on a prime band of communication spectrum can't be anything but pure gold.

I thought that was the whole point of this. If it passes the threshold, then there is no "monopoly on a prime band.. yada yada".

Getting the band for unlimited use for your company's product would be a goldmine, especially for 4.638 billion, just under the threshold.
But, if you bid more than 4.638 billion, I'm not sure what you get. You can't promise your customers that their phones will work, because you don't know what kind of science-fair type phone their neighbors may be using.

Even with a bid more than 4.638 billion, you can still control what plans the customers buy for use on the network, but you can't control the hardware. I'm anxious to see how it turns out.

700 Mhz Spectrum? (1)

Per Wigren (5315) | more than 6 years ago | (#22246898)

Now that's what I call overclocking!

Re:700 Mhz Spectrum? (1)

repka (1102731) | more than 6 years ago | (#22247328)

There are several bands of spectrum in the vicinity of 700 MHz. 22 MHz each. Which is still not bad for a Spectrum though...

Bidding on Round 17 has closed.. (2, Informative)

nimr0d (312173) | more than 6 years ago | (#22246910)

And no new bids. Watch it in REAL TIME: https://auctionbidding.fcc.gov/auction/results/results.htm [fcc.gov]

Re:Bidding on Round 17 has closed.. (1)

HogGeek (456673) | more than 6 years ago | (#22246984)

BZZZT!

Your wrong!

1 New bid @ $4,713,823,000

Everyone on ebay knows... (3, Interesting)

Vellmont (569020) | more than 6 years ago | (#22246944)

That the bidding often stalls in the middle of the auction, and picks up like crazy near the end. This isn't ebay of course, but it's certainly an example of auction behavior to pay attention to.

This auction will go on for months, and we're at the one week mark now?

Anyone who says Google is "bluffing", or the price won't go up is full of it. Google may not bid as much as they say, they may, someone else might bid more, or who knows? It's just way to early to be saying much of anything about the auction, what the different strategies are, and who will win.

Re:Everyone on ebay knows... (1)

langelgjm (860756) | more than 6 years ago | (#22247170)

That the bidding often stalls in the middle of the auction, and picks up like crazy near the end. This isn't ebay of course, but it's certainly an example of auction behavior to pay attention to.

According to the article, the FCC has certain rules about bidding in the auction (you must bid every round unless you are the high bidder, you have three waivers that you can use to skip a round, etc.), so I don't think we'll be seeing eBay style auction-sniping here.

Re:Everyone on ebay knows... (1)

Vellmont (569020) | more than 6 years ago | (#22247502)


so I don't think we'll be seeing eBay style auction-sniping here


You're focusing too much on one example I gave. It's not about sniping, or ebay, or whatever. It's about making dumb predictions and prognostications at barely the start of the game. Strangely enough, this one already turned out to be dead wrong.

Its an auction (1)

brunes69 (86786) | more than 6 years ago | (#22246994)

They're obviously just waiting till the last minute so they can snap it up for 4,299,999,999.99.

I bet they have a wicked fast sniping script. After all they're Google!

Reserve met (1)

dmoore (2449) | more than 6 years ago | (#22247022)

Bidding on round 17 just ended and now it has been bid up to $4,713,823,000, meeting the reserve price.

This article was just wasteful speculation. I guess that shouldn't surprise me.

Re:Reserve met (1)

markov_chain (202465) | more than 6 years ago | (#22247486)

I wish they didn't set a reserve. How much money will they now waster in fees! That's government for ya.

I don't understand why... (1)

nategoose (1004564) | more than 6 years ago | (#22247064)

I don't understand why any bids below the reserve would even be placed or accepted by the FCC. I'm not big on auctions, so maybe I'm missing something.

Re:I don't understand why... (4, Informative)

wramsdel (463149) | more than 6 years ago | (#22247798)

Basically, it's a tool to stimulate bidding. In a typical auction, the seller is obligated (by contract or at least good faith) to sell the item to the highest bidder. A reserve allows the seller to hedge her/his bets by defining a window between the minimum bid and the reserve in which a they're not required to sell, but do have the option. Often the reserve is not disclosed since bidders might be turned away by sticker shock.

Re:I don't understand why... (1)

nategoose (1004564) | more than 6 years ago | (#22248180)

So essentially it's because bidders can get excited b/c they are stupid and easily stimulated? I had considered that it might be useful for gaging what the bidders might be willing to pay for the "item", but I would think that these companies would just low ball, let the auction get canceled, rinse and repeat until one of them finally decided that the price was something they couldn't resist and bid the reserve at which point it would turn into a normal auction.

Some bid above 4.6B in round 17.... (1)

JDelphiki (647683) | more than 6 years ago | (#22247114)

So open access rules now apply to this spectrum.

Happy Hacking :-)

grammar! (0)

Anonymous Coward | more than 6 years ago | (#22247226)

"it's reserve"

ARGH!!!!!!!!!

It's (0)

Anonymous Coward | more than 6 years ago | (#22247338)

"It's" is a contraction for it is, retard.

Here's the link to the auction status (3, Informative)

RaigetheFury (1000827) | more than 6 years ago | (#22247382)

Here's the link for status
http://wireless.fcc.gov/auctions/default.htm?job=auction_summary&id=73 [fcc.gov]

Under Results click: View Auction Results (buttheads are using javascript for linking so no direct linking possible).

Please note it wants you to run some java. I clicked no and everything runs fine.

Who said anything about a recession? (4, Insightful)

ficken (807392) | more than 6 years ago | (#22247384)

Google has no interest in becoming a cell phone company and with a recession looming the 700MHz spectrum now seems worth a whole lot less
Who said anything about a recession? You do not know you are in a recession until after it happens. How do you know we're not spiraling into a depression?

Re:Who said anything about a recession? (1)

DragonWriter (970822) | more than 6 years ago | (#22247964)

You do not know you are in a recession until after it happens.


Well, you can't know (under one common definition) until you've already been in it for at least half a year (that doesn't mean its over).

How do you know we're not spiraling into a depression?


A depression isn't a term with any generally accepted concrete definition, its just a common term for a really severe recession. So if we're "spiraling into a depression", we then, ipso facto, are either in a recession or have one looming.

Nothing to see here yet, move along... (3, Insightful)

rickb928 (945187) | more than 6 years ago | (#22247440)

Lemme see. Reserve is 4.6B, bid is 4.3B. 6.5% difference, 300M. If I were buying a rusty old Duster for $600, this would be a difference of $40.

Obviously this is just gamesmanship.

As of 11 AM EST this story is false (3, Informative)

mzs (595629) | more than 6 years ago | (#22247444)

The NY Times blog was just useless speculation from yesterday:

https://auctionbidding.fcc.gov/auction/home/announcementDetail.htm?ann_id=402 [fcc.gov]

Announcement

1/31/2008 11:00:41 AM
C Block Reserve Price Met in Round 17
At the conclusion of Round 17, the provisionally
winning bids for the C Block licenses exceeded the
aggregate reserve price of $4,637,854,000 for the
block.

The plot "thickens"? (4, Funny)

timster (32400) | more than 6 years ago | (#22248154)

Since hitting the reserve price brings more clarity, wouldn't it be more accurate to say "the plot thins"?

Once the auction hits reserve (5, Funny)

hyperz69 (1226464) | more than 6 years ago | (#22248228)

All the other telcom companies companies come under a massive DOS attack from the middle east / central asia and google wins at reserve price. :)

Google doesn't need to build out C-block. (4, Interesting)

swschrad (312009) | more than 6 years ago | (#22248756)

they can rent it out if they win it. as in beer. they could throw it open to all carriers using an open GSM platform using whatever flavor of G3 data they like so it's fully world-compatible.

there's an idea that should have "it's MY network, and all these guys behind me will beat you if you disagree" shivering.

yes, bring your BT, NTT, Korean phone over here with you. it will work. every time you hit send, two cents to Google for use of the C block airwaves. one cent if the home phoneco had built the network in that regional area.

profit per click. no investment in the backbone. that's something they know about.

it can work.
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