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The $10 Billion Poker Game Begins 169

Posted by Zonk
from the just-a-bit-high-stakes dept.
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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The $10 Billion Poker Game Begins

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  • by UbuntuDupe (970646) * on Tuesday December 04, 2007 @11:49AM (#21572205) Journal
    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"?
  • I don't undertstand (Score:2, Interesting)

    by Phairdon (1158023) on Tuesday December 04, 2007 @11:55AM (#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.
  • by kcornia (152859) on Tuesday December 04, 2007 @12:58PM (#21573279) Journal
    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.
  • by bluemonq (812827) * on Tuesday December 04, 2007 @01:14PM (#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.
  • google forecast (Score:2, Interesting)

    by EverythingDies (1198239) on Tuesday December 04, 2007 @01:24PM (#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] ;).

  • Re:Bogus (Score:3, Interesting)

    by Red Flayer (890720) on Tuesday December 04, 2007 @01:35PM (#21573871) Journal

    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 (Score:5, Interesting)

    by Stewie241 (1035724) on Tuesday December 04, 2007 @02:31PM (#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.

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