The $10 Billion Poker Game Begins 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)."
Oh boy! (Score:2, Funny)
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Of all of them I still think Sprint is one of the most open. Compared to Verizon they are super open.
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You have to realize that the US government doesn't want this as open market telecom would likely make their mechanized eavesdropping much more expensive...
Enforcement mechanism (Score:5, Interesting)
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 (Score:5, Insightful)
Remember officially the government "own" this stuff so they get to define the terms that they want.
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"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... (Score:2, Insightful)
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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?
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Bogus (Score:2, Insightful)
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
Re:Bogus (Score:5, Insightful)
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.
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This is what CDMA excels at.
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Still, every technology has a limit on its capacity. You can only push so many bits through a channel before they become mashed together.
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Re:Bogus (Score:5, Funny)
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Doesnt improve anything. Without firm rules about who owns what, the air becomes worthless.
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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.
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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 d
Re:Bogus (Score:5, Interesting)
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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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.
free market straw puppet (Score:2)
We tend to forget that collusion, like any other business model, is subject to cost-benefit analysis. It's likely the cost of this spectrum will be high enough that the incentives will be aligned toward exploiting the resource for value, rather than choking it off to obtain collusive side-benefits.
I don't see the point of libertarian extrapolation of "free" markets. When you model the interactions of independent agents in game theory, the concept of "freedom" is nowhere to be found in the bare equations.
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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
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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 definit
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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
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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
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Absolutely false. You are arguing against a straw man, not knowing my true position on the matter.
For the record, my position is that (a) as you say, radio spectra are not property, and thus not subject to ownership; and (b) radio-sensitive devices a
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No, it's not a straw man. Your argument was based on that assumption; I do not believe the assumption is valid. To quote again:Blockquote>A "truly free-market" system would protect existing users of a radio channel (frequency/bandwidth/location) from interference by newcomers. Maybe I should have asked you to define "users" since now that apparently only means receivers...
As for your true position, you are essentially gra
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I still maintain that your argument was directed at an assumption you read into my comment, that I was claiming that property rights exist in radio spectra, which is not what I had intended to portray and which I never said directly. A prohibition on transmissions which destructively interfere with existing users (transmitters and receivers) based on their property rights in their equipment is
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So someone broadcasting for commercial gain is not directly damaged by an interfering transmitter? They have been using that spectrum to communicate, yet when their transmission is overwhelmed by another broadcaster, there is no problem with that?
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A free-market economy precludes auctioning off a public resource to be used by a single entity without compensation.
In this case, how did the government acquire ownership of the spectrum? Did it buy it from somewhere? Why should the government keep the fees for taking and selling a public property?
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The government is the people (snort!). By allowing the government to keep the fees, we're offsetting another expense, so we're getting the money by not having to borrow those funds or raise taxes for whatever they get spent on.
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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 (Score:2, Interesting)
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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 (Score:5, Informative)
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.
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An unused spectrum (like land) is public property. The government is entrusted with managing public goods. They have now decided that the best use, the way to get most value for the public out of this property, is to sell it. The logic is that the money and added value that private owner will create will be more than what the
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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 ar
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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, ev
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That's a bit dishonest, they're both University stations funnily enough.
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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
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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 t
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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 bidd
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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
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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?
The real reason is that if the FCC did not regulate radio signals inside a state, then the state would need to. The states simply are not interested in that. If they were they would have challenged the FCC already. After all, the resources the FCC needs to regulate interstate transmission of radio signals make it the ideal candidate for regulating radio signals inside the state. Further, remember that there is no reason a state could not delegate some of their rights to a Federal Agency. Is is really that
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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.
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Let's take it up a notch! (Score:4, Funny)
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FCC's basis for regulation? (Score:4, Funny)
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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
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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.
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Oh wait...
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I don't think you've thought it through.
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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.
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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.
The area in which a radio broadcast would be contained within a single state would be pretty small, especially in the northeast. People living near a state border would be completely screwed because no sane broadcaster would want to figure out how to place transmitters so that the signal never crosses a state line. As a simple experiment, try creating a map of the United States using only circles. It's simply not feasible.
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Consider the case you are proposing. If you are operating on a frequency that is in use in a neighboring state, you may not interfere with users in that state, but you may interfere with interstate users in your state. That's interference with interstate commerce, same as if you blocked an interstate highway with a railroad car. Would you consider the argument "but the
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Like it or not, RF crosses state and national boundaries, and requires an enforced monopoly to be usable. Thus, the commerce clause applies.
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IANARadio engineer, so I have no clue if th
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so.. (Score:5, Funny)
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Did I mention that I just woke up from a coma and am still stuck in 1999? I can't wait for the Y2K...
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Honest Question(s)... (Score:5, Insightful)
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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
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There isn't unlimited signal available, no matter how good you make encoding it completely unregulated transmission would find a way to use it all up for nothing. And if you're going to need to have regulation, might as well sell it to a company to regulate rather than trust a government official to get it right.
Hopelessly complex (Score:2)
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 a
Surviving the First Round (Score:2)
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 (Score:4, Interesting)
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google forecast (Score:2, Interesting)
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
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Experimental mock auctions (Score:2, Informative)
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 license
Get RID of the whole system of auctions (Score:2)
Have independent oversight committee create an internet free network.
F-corporates who hoarde our resources.
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Great sport (Score:2)
The four incumbent operators (at the time, it was Vodafone, BT, Orange, and One2One) weren't allowed to bid on the biggest slice, so you had a load of new faces slugging it out for that one. These companies were also allowed to bid for the other four slices, but basically the four incumbents couldn't afford not to secure a slice, so
Re:i'll go first (Score:4, Funny)
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Redundant (Score:5, Informative)
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 (Score:2)
you are humor deprived (Score:2)
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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?
And why should the government be the only ones allowed to build roads? Let any company with a few trucks lay down some pavement. Who cares if they want to come in one day and bulldoze your neighborhood to do it. Like land for building roads, the spectrum is a finite resource that benefits everyone, but only as long as it remains usable, which means a certain amount of regulation to ensure that system continues to function correctly.
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1) Unlike the internet, which runs on wires between computers, wireless communications propagate through space. For this particular frequency range, there is currently no practical way to isolate one broadcast from another in a particular area except by limiting broadcasts to different frequencies within the spectrum. If you and I both broadcast from our personal antenna on 700.635MHZ, then we both get noise--or the guy with the more powerful antenna wins but with a really messy signal. In other words, the guy with the most money wins just like the case now--except the licensing rules prevent competing broadcasters on a given wavelength.
Not completely true. With CDMA and WCDMA technology like UMTS (3g) each mobile uses all of the available spectrum -in UMTS 5MHz. Mobile Terminals arent limited to a single unique channel like AMPS and historical radio communications. So, in your example 100 mobiles may be communicating on 700.635MHz (actually the whole range between 700 and 705MHz) without issue. There is no hard limit as to how many mobile terminals can access this frquency - the higher the number of terminals, the higher the signal to n
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