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D Block Spectrum Auction Fraud Alleged

samzenpus posted more than 6 years ago | from the shades-of-grey dept.

Government 44

eweekhickins writes "A public interest group is saying that a consulting firm hired to help the government hand over the D-block spectrum may have acted improperly and discouraged potential bidders by suggesting that any winning bid would have to pay $50 million in annual fees, in addition to the auction price. Any wonder the D-block didn't meet the reserve price?"

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first (-1, Redundant)

Null Perception (914562) | more than 6 years ago | (#22805052)

first post!

Re:first (4, Funny)

Constantine XVI (880691) | more than 6 years ago | (#22805056)

Sorry, your first post didn't have enough characters to meet the reserve. Try again some other time.

Re:first (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#22805062)

Slashdot's gone cold I'm wondering why I got out of bed at all
The morning rain clouds up my window and I can't see at all
And even if I could it'll all be gray but your picture on my wall
It reminds me, that it's not so bad -- it's not so bad

Dear Rob, I wrote but you still ain't callin
I left my email, my ICQ, and my yahoo chat at the bottom
I sent two emails back in autumn, you must not-a got 'em
There probably was a problem with your sendmail or somethin
Sometimes I scribble email addees too sloppy when I jot 'em
but anyways; fsck it, what's been up? Man how's your boxes?
My boxes is linux too, I'm bout to be a compiler
once I learn gcc,
I'ma go on and compile for hours
I read about your Palm Pilot too I'm sorry
I had a friend lose his Palm over at the airport in Maradonna
I know you probably hear this everyday, but I'm your biggest fan
I even read all your bullshit Linux news and Microsoft's man
I got a room full of your posters and your pictures man
I like the way you sold your ass out too, that shit was fat
Anyways, I hope you get this man, hit me back,
just to chat, truly yours, your biggest fan
This is Stan

Dear Rob, you still ain't called or wrote, I hope you have a chance
I ain't mad - I just think it's FSCKED UP you don't answer fans
If you didn't wanna talk to me outside your Linux World
you didn't have to, but you coulda signed an autograph for Matthew
That's my Senior sys admin he's only 26 years old
We waited on a 9600 baud for you,
four hours and you just said, "No."
That's pretty shitty man - you're like his fsckin idol
He wants to be just like you man, he likes you more than I do
I ain't that mad though, I just don't like bein lied to
Remember when we met in Boston - you said if I'd write you
you would write back - see I'm just like you in a way
I never had a clue about shit either
I gcc'd shit with my wife then beat her
I can relate to what you're saying in your page
so when I feel like rmusering I read Slashdot to begin the rage
cause I don't really got shit else so that shit helps when I'm depressed
I even got a tattoo of slashdot across the chest
Sometimes I even packet myself to see how much it floods
It's like adrenaline, the DDoS is such a sudden rush of blood
See everything you say is real, and I respect you cause you tell it
My girlfriend's jealous cause I talk about you 24/7
But she don't know you like I know you Rob, no one does
She don't know what it was like for people like us growin up
You gotta call me man, I'll be the biggest fan you'll ever lose
Sincerely yours, Stan -- P.S.
We should be together too

Dear Mister-I'm-Too-Good-To-Waste-A-Packet-On-My-Fans,
this'll be the last packet I ever send your ass
It's been six months and still no word - I don't deserve it?
I know you got my last two emails
I wrote the @ signs on 'em perfect
So this is my payload I'm sending you, I hope you hear it
I'm on my modem now, I'm doing 9600 baud so fear it
Hey Rob, I drank a fifth of vodka, you dare me to code?
You know the song by Deep Purple or Slayer
its irrelevant by playing on my linux player
while I write some php scripts and play some Dragonslayer
That's kinda how shit is, you coulda rescued me from drowning
Now it's too late - I'm on a 1000 downloads now, I'm drowsy
and all I wanted was a lousy letter or a call
I hope you know I ripped +ALL+ of your pictures off the wall
I love you Rob, we coulda been together, think about it
You ruined it now, I hope you can't sleep and you dream about it
And when you dream I hope you can't sleep and you SCREAM about it
I hope your conscience EATS AT YOU and you can't BREATHE without me
See Rob {*screaming*} Shut up bitch! I'm tryin to code
Hey Rob, that's my senior admin screamin from the comode
but I didn't cut the power off, I just rebooted, see I ain't like you
cause if rm -rf'd we'd suffer more, and then the boxes die too
Well, gotta go, I'm almost BGP bridged now
Oh shit, I forgot, how'm I supposed to send this packet out?

Dear Stan, I meant to write you sooner but I just been busy
You said your box is running now, how'd you like your gcc?
Look, I'm really flattered you would install 7.0 Redhat
and here's an autograph for your senior sys admin
I wrote it on the Starter cap
I'm sorry I didn't see you at the show, I musta missed you
Don't think I did that shit intentionally just to diss you
But what's this shit you said about you like to DDoS lamers too?
I say that shit just clownin dog,
c'mon - how fucked up is you?
You got some issues Stan, I think you need some counseling
so heres some more Linux stories to keep your ass busy when you get down some
And what's this shit about us meant to be together?
I sold Slashdot for thousands so now I'm a single jetsetter
I really think you and your boxes need each other
or maybe you just need to treat them better
I hope you get to read this letter, I just hope it reaches you in time
before you hurt yourself, I think that you'll be doin just fine
if you relax a little, I'm glad I inspire you but Stan why are you so mad? Try to understand, that Linux and MS is just grand
I just don't want you to do some crazy shit
I seen this one shit on the news a couple weeks ago that made me sick
Some dude was drunk and switched his router for a bridge
and his packets were blackholed, and his DNS couldn't get digged
and in the colo they found a tape, but they didn't say who it was to
Come to think about, his name was.. it was you

Re:first (-1, Offtopic)

fractoid (1076465) | more than 6 years ago | (#22805234)

I love that song. Then that retard sampled it and got way more airplay just for trying to be black. :( </3

Re:first (-1, Troll)

Anonymous Coward | more than 6 years ago | (#22806858)

Stop being a racist ignorant fucktard.

gnatrg (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#22805054)

resistor is fungr89(*jnm

Re:gnatrg (0)

Anonymous Coward | more than 6 years ago | (#22805388)

You, sir, speak my mind perfectly. fungr89(*jnm indeed! Moreover, nfyuds hHUIH r87ufsfFF ttGTgf. E$E%QAV$dtrFRCGFVD GFGVTDVFD gfsdtgft'l;'l;'":":ofdeojnhj.

Well, sure. (1)

AltGrendel (175092) | more than 6 years ago | (#22805064)

They wanted to keep it for themselves.

Potenially... (2, Insightful)

Capt James McCarthy (860294) | more than 6 years ago | (#22805076)

Could it be that the contract signed with the Government had a clause for getting a percentage of the sales/lease price?

Re:Potenially... (4, Insightful)

Propaganda13 (312548) | more than 6 years ago | (#22805098)

Could it be that the contract signed with the Government had a clause for getting a percentage of the sales/lease price?

No, they'd want a higher sale price then. You'd say that there was no fees and the government would give you tax breaks.

Oooh Oooh (3, Funny)

chuckymonkey (1059244) | more than 6 years ago | (#22805136)

Is it conspiracy time? I just bought a whole new roll of aluminum foil for a really new stylish hat that keeps out the brain reading lasers. I also have popcorn and I'm willing to share.

Re:Oooh Oooh (3, Funny)

Hanners1979 (959741) | more than 6 years ago | (#22805362)

I wouldn't worry about the tinfoil hat too much, considering nobody wanted to pay for the block of the wireless spectrum they were planning to use to beam thoughts into your brain.

Re:Oooh Oooh (1)

Sparhawk2k (680674) | more than 6 years ago | (#22808026)

Sharing popcorn? How do I know it's not poisoned?

Re:Oooh Oooh (1)

socz (1057222) | more than 6 years ago | (#22813574)

You know, a LONG time ago people said "only crazy people wear foil hats!" Well, they were proved wrong!! My mom puts foil hats on a lot of her customers... or else their hair won't dye properly!@!#!@#!

D Block Restrictions (5, Informative)

Silentknyght (1042778) | more than 6 years ago | (#22805156)

The nationwide D Block licensee must provide signal coverage and offer service to (1) at least 75 percent of the population of the license area by the end of the fourth year, (2) at least 95 percent of the population by the end of the seventh year, and (3) at least 99.3 percent of the population by the end of the tenth year. These three construction benchmarks will take effect beginning on February 17, 2009. Moreover, the nationwide D Block licensee must meet the construction benchmarks based on the build-out schedule specified in the NSA. If the licensee fails to meet a construction benchmark, the Commission may cancel its license, depending on the circumstances.
From []

75% coverage of the "license area" (for a Nationwide license) seems daunting after four years, let alone 99.3% after ten years. I'm not sure how the FCC would actually determine compliance with that provision, but that sounds like a massive undertaking to me. Other blocks have a requirement to provide something like 35%-70% coverage of their smaller, geographic area.

Re:D Block Restrictions (5, Interesting)

squiggleslash (241428) | more than 6 years ago | (#22805214)

The mandate is for population coverage not geographic coverage, which makes it considerably easier than you might think. Essentially you're talking about, in ten years, covering every main road in the US and every city and major population center outside of a city. And it doesn't even have to be high capacity coverage: if the emergency services are able to use the system, who can be expected to have relatively light requirements, the mandate is covered.

If you look at companies like Sprint PCS and T-Mobile, after ten years of operation (in T-Mobile's case including it's predecessors, obviously) they certainly were at that kind of level of coverage for the license areas they serve. Both operators had to overcome more physical hurdles than the 700MHz operators will have to - 1900MHz signals pass through buildings with much more difficulty than 700MHz signals do, and this affects both in-building and outside coverage. The real problem with most operators who have a reputation for less than perfect coverage has to do with a lack of licenses, due to the moronic PCS geographically based licensing system, where an operator could have licenses in one county but not in the next due to the luck of the draw. This, obviously, will not be an issue for a company with a national license.

Re:D Block Restrictions (1)

NateTech (50881) | more than 6 years ago | (#22822038)

Emergency Services may have light overall traffic requirements (and this changes dramatically when a REAL emergency happens), they have higher coverage needs.

The difference in coverage needed is night and day when you compare things like rural (or even suburban) cellular networks, versus public safety radio systems.

When the cop is knocked down by a bad guy, lying in mud next to the road, with a relatively low powered handheld radio on his down side, the antenna stuffed in the water and mud, no vehicular repeater (a common way to handle HT coverage) and trying to draw his weapon and press his "man down" button on his radio at the same time... the damn thing has to work.

"No service" is NOT an option for public safety radio system (RF) designers.

So the requirements to "cover" the populated areas might have been met, but the system wouldn't be usable by public safety.

That is the REAL problem with D-Block. There is no NEED for a Federally-run national public safety system. Jurisdictions and agencies run their own, or maybe get to regional or statewide cooperative systems, but national? The federal agencies don't WANT shared RF systems.

It is a system looking for a problem to solve that none of the agencies want solved.


Re:D Block Restrictions (1)

squiggleslash (241428) | more than 6 years ago | (#22822288)

If they're getting "No service", then the area isn't covered, and thus the network provider is not fulfilling their mandate. I said the operator doesn't have to worry about providing full capacity (as in, enough to cover every yakking SUV driver) to certain areas, that's not the same thing as failing to provide a usable signal.

Re:D Block Restrictions (1)

NateTech (50881) | more than 6 years ago | (#22822990)

You're missing the point. "No service" was a bad way to put it.

"Ratty service" or "poor service" isn't ever in Public Safety radio systems. They have to fill ALL of the holes in the jurisdictional coverage area, or it's a SAFETY problem for officers, firefighters, etc.

How that relates to a Federal system that no one wanted anyway? No one knows... but the RF coverage mandates for Public Safety systems are far higher than cellular. Cellular drops calls.

Public Safety can NOT drop calls if at all possible, and the engineers MUST know where the coverage problems are and FILL them. An officer calling for help MUST be heard.

Re:D Block Restrictions (2, Informative)

morgan_greywolf (835522) | more than 6 years ago | (#22805228)

Shouldn't be a problem for a big money company like Google. A lot of the equipment they would need to do that will be going at fire sale prices from television stations who will no longer need the equipment.

No, I smell a rat. Definitely.

Re:D Block Restrictions (1)

socz (1057222) | more than 6 years ago | (#22813606)

I wondered what would happen to that equipment... and ours. When the that spectrum of bandwidth is broadcasting cellphone data what will tv's do if tuned it? Will they make funny noises? Will they blow up my tv? But really, what is expected to happen?

Re:D Block Restrictions (5, Informative)

Mikkeles (698461) | more than 6 years ago | (#22805364)

'75% coverage of the "license area" (for a Nationwide license) seems daunting after four years,...'

Not really, since it is actually 75% of the population in the Nation. That's about 250M. The top 5 or 6 cities has a pop. of about 20M; the urban areas are about 80M. As a rough oestimate, it would take 50-60 cities (including the urban areas) to achieve this coverage. For flexibility in development, I would use 100 cities (with less of the surrounding urban areas) for the initial placements and expand outward from there to achieve the remaining required coverage.

Re:D Block Restrictions (4, Insightful)

raddan (519638) | more than 6 years ago | (#22805400)

It's true that those requirements are rather steep, but keep in mind that the D block is an auction for a special piece of the spectrum-- it is going to be used not just for the private sector, but also for public safety. With that in mind, the requirements don't seem as bad. Also, since this will be a public-private partnership, with public safety presumably as a captive customer, there's some reason to think that the D block would be a solid money-maker, and that private services offered on top of the public ones would come "for free", since building infrastructure for the public services would also serve the private. Ten years for 99% penetration does light a fire under the winning bidder's ass, but then again, the taxpayer will probably be paying for this in the long run, so in that context, ten years doesn't sound so bad to me...

Figures (4, Insightful)

mraudigy (1193551) | more than 6 years ago | (#22805158)

It figures something like this would happen, a seemingly sensible move by the government just turns out to be another big block of crap. In my mind there's absolutely no question that something unethical went down. It seems funny that when you're bidding D-Block and there are two or three frontrunners picked and almost a *definite* surefire contender, and the suddenly no one meets the reserve. Its quite simply a disgrace and a big block eye for all involved -- discouraged bids, no contract bids, what will they think of next?!

Re:Figures (1)

sumdumass (711423) | more than 6 years ago | (#22813234)

I think your not looking at this properly. The government did do this, a consulting firm did. You don't even have to read the article, the summery says this itself.

And as for the no bid contracts, that isn't necessarily a bad thing when something is needed right now and not 6 months to a year later. I'm not sure is you are already aware of that and just want to rant about something idiots think is popular or if you are one of them.

Hint (0, Flamebait)

tulcod (1056476) | more than 6 years ago | (#22805174)

This is what they call capitalism. Get over it.

Re:Hint (1)

Qzukk (229616) | more than 6 years ago | (#22807024)

This is what they call capitalism. Get over it.
I'll get over it, but only if you pay me $50,000,000 a year.

Same Old Song & Dance (5, Informative)

TheGrumpster (1039342) | more than 6 years ago | (#22805186)

For those of you not wanting to endure E-Weak's spam, a better summary can be found here: [] This group of scam artists has been around the wireless industry for ages, and what a great way to steal. Take something the government already owns and sell it back to them. What will they think of next?

Re:Same Old Song & Dance (4, Interesting)

wrook (134116) | more than 6 years ago | (#22805480)

I wish I had mod points. The original article made no sense to me at all. The one you link implies that the reason for sabotaging the auction was to establish that this part of the spectrum was "worthless". Then go back to the government and offer to manage this "worthless asset" in order to create some value. Of course rental fees would be applied. That way they are basically given that spectrum for free. If it's true, I hope someone is smart enough to shut the door *very* hard on their fingers...

Don't worry (0)

HalAtWork (926717) | more than 6 years ago | (#22805458)

Jadakiss fallin' off but Sheek Louch holdin' down d-block.

Re:Don't worry (3, Funny)

gclef (96311) | more than 6 years ago | (#22805530)

Does anyone here speak jive?

Excuse me, I speak Jive (2, Funny)

mamono (706685) | more than 6 years ago | (#22806122)

Cut me som' slac' jak! Chump don wan no help, chump don git no help. Jive ass dude don got no brains anyhow. Shi-iiiii

Re:Excuse me, I speak Jive (1)

hunterkll (949515) | more than 6 years ago | (#22809752)

Someone's been watching a little too much AMV lately...

Re:Excuse me, I speak Jive (1)

sumdumass (711423) | more than 6 years ago | (#22814412)

What's AMV stand for? I thought that was a quote by the nun in one of the airplane movies.

Re:Excuse me, I speak Jive (0)

Anonymous Coward | more than 5 years ago | (#22846214)

Ouch. Failed.

Re:Don't worry (1)

HalAtWork (926717) | more than 6 years ago | (#22806680)

Heh it was just a joke []

Re:Sorry I speak Honkics (1)

Douglas Goodall (992917) | more than 6 years ago | (#22816910)

I was not close enough to Oakland to take a course in Jive (Ebonics) but I have been working on my Honkics. Here is a sample...

"May I have another grilled cheese sandwich please?"

Mexican Stand-Off (5, Interesting)

Anonymous Coward | more than 6 years ago | (#22806732)

If the reserve price of the D-Block was known, then why did anyone even bother to bid anything less than the reserve? I mean, ~$300 million, is a *lot* less than the reserve they had to meet. Why even bother making that bid?

As far as the other players, I can see this having been a case of both sides daring the other to flinch... and nobody flinched (and the auction ended under the reserve price).

Google is on the 'open' side of the issue. They want the spectrum to be REQUIRED to be open to wholesale resale, anyone's wireless devices, etc. IIRC, the FCC only made a requirement that it be open to anyone's devices. (There were four points that google publicly stated; and I think that the FCC only took two of them to heart) Google could have been waiting it out. If someone else met the reserve price, then Google would have to jump into the fight and try and come out on top. On the other hand, if no one meets the reserve, there is a chance to get the FCC to place additional 'open-ness' restrictions on the D-Block national spectrum license.

One the other side of the issue are the telcos like Verizon. Verizon doesn't want to be forced to keep their new network open. Verizon (and/or the other telcos) could have been waiting it out too. If someone meets the reserve price, then they have to jump in and try and make sure they are the winning bidder. If no one meets the reserve, they have a chance to lobby/convince the FCC that getting rid of those 'open-ness' restrictions will encourage bidding on the block in a new auction.

There's also another player here. Cyren Call, is a company that is the 'advisor' for the public side of the D-block spectrum. And (as eweek states), any winner will have to negotiate with them. At the heart of this issue, are rumors that Cyrel Call was dropping hints at all kinds of extra money they would require a winner of the auction to pay in 'fees.' The conflict of interest here is that Cyren Call has an interest in seeing the D-Block auction fail. They have already made proposals that the D-Block be handed over to them, and that they would (out of the goodness of their hearts) make some money in order to support the operation of the public side of things. Of course, this would exclude the need for an auction. It could just be handed over to them for free since they would be doing a public service in supporting the public/emergency side of things.

This is a ******HUGE****** conflict of interest. I don't even know why they are even allowed to be anywhere near this auction. They have stated that they themselves want the spectrum, yet they are put in charge of aspects of the auction itself? Would anyone be surprized if it's found out that they tried to discourage bidding on the spectrum so that they can plead to Congress that they should have this for free instead?

Article Translation (1)

Anonymous Coward | more than 6 years ago | (#22807696)

It essentially boils down to this snippet.

Cyren Call is a company. A company's first and foremost goal is to make money, not serve the public interests. If you want someone that looks after the public, call in the government bureaucrats. Now... it says Cyren Call wants to stash away 30MHz of the 36MHz currently being auctioned off for its exclusive use. Red flags anyone? NTP Inc. and all the patent trolls you read on slashdot operate on the same principle: create phony property, sit on them (i.e. don't make any products/services using these 'registered' properties) for years, and sue anyone that tries to use it in actual products/services. Cyren Call is no different. It wants this large swathe of freed up broadcast spectrum for free but does not want anyone to use it.

Benefits? Promises? I can whip these out with Microsoft Word in 24 hours and say exactly the same thing.

Re:Article Translation (1)

Dunbal (464142) | more than 6 years ago | (#22811036)

If you want someone that looks after the public, call in the government bureaucrats.

      Perhaps in your ideal world. As far as I know, bureaucrats only look after themselves too, and fuck "the people".

Re:Article Translation (1)

sumdumass (711423) | more than 6 years ago | (#22814434)

That's because government is in place fore more then just "the people". People seem to get upset when government acts like there are obligations they have other then themselves but it is the way it works. This is what makes our republic so wonderfull.

Hell, anyone with intelligence (1)

LM741N (258038) | more than 6 years ago | (#22810260)

would have auctioned off the spectrum on EBay. I'm not certain though if Pay Pal will accept billion dollar transfers.

I could easily see not bidding on this... (0)

Anonymous Coward | more than 6 years ago | (#22840172)

I could easily see not bidding on this. I've read the FCC estimated the buildout requirement could be met for $4 billion. Bull! Verizon Wireless for instance has been spending $4 billion to $5 billion A YEAR since 2000.. that's 30-40 billion dollars. And they don't cover the country.. they do fine with roaming, but natively they don't cover quite a lot of area. If I were bidding, I wouldn't touch this -- the FCC can claim certain coverage requirements all they want, safety agencies would be leaning on you all the time to start filling in those coverage holes, driving costs way up. Even the $400 million or so price Frontline initially offered isn't so good when you look into buildout costs.
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