FCC's Spectrum Auction Approaches $20B in Bids

An anonymous reader writes "After 32 rounds, the FCC has raised more than $18.8 billion in its 700-MHz auction, well surpassing its own early estimates of attracting between $10-15 billion in offers. That's undoubtedly good news for the agency. Since the auction began on Jan. 24, both the FCC and wireless experts have expressed ongoing concerns about meeting those estimates. Once the auction was underway, those worries were compounded by a shaky economic forecast and the possibility of a looming recession."

FCC '08 Budgetary Resources are $433 Million

[eldavojohn (898314)]

According to their budget sheet [fcc.gov] (133 page PDF warning), their proposed budgetary resources for 2008 is $433 million.

As I haven't been following the news very closely, does anyone know where this $20 billion will go?

I, like many Americans, am ghastly concerned with how my government spends money. I hope that the FCC doesn't pull an M.C. Hammer and put spinners on their pocket protectors or pass out diamond studded platinum iPods to all of its friends. Will this money be put under control of congressional spending? Will this money be put in a fund to supply the FCC with emergency regulation cash?

You're going to suddenly have over 40 times the amount of resources you normally have. Even if they went nuts and ordered yet another all marble Parthenon-dupe building in DC they couldn't burn all this cash. Please don't be stupid.

Mod the truth down, but it's still the truth

[Quiet_Desperation (858215)]

I, like many Americans, am ghastly concerned with how my government spends money.

Define "many". Most don't seem to give a damn because it's generally someone else's money.

they couldn't burn all this cash.

I'm guessing you are a recent immigrant? Welcome to the USA, where the government can burn through an arbitrarily large amount of money in an arbitrarily small span of time.

spinners on their pocket protectors

I totally want to spread that as a meme.

Re:

[Black-Man (198831)]

Yeah... time to slide that bridge in Alaska into next year's appropriations.

Re:FCC '08 Budgetary Resources are $433 Million

[compro01 (777531)]

As I haven't been following the news very closely, does anyone know where this $20 billion will go?

Just like all other government revenue, it'll be put into the general fund under the jurisdiction of congress. The FCC won't get to keep any of it and will have to go ask congress if they want more money.

Re:FCC '08 Budgetary Resources are $433 Million

[daeg (828071)]

Because the FCC can now approach Congress with: "Look! We made $XX billion last year for you! We need some more money."

Congress, of course, won't realize that these auctions are a very limited-use thing. They can't re-auction them every year.

Re:

[by Anonymous Coward]

well, $1.5B is surely going to go toward paying for the digital-tv voucher program. that's probably above and beyond the $433M budget you posted.

that still leaves $18B unaccounted for, but it's a start

Re:

[somersault (912633)]

After that there's the Headquarters made of Ben and Jerry's Chocolate Fudge Brownie ice cream, plus appropriate cooling for the structure, and winter garments/spoons for all employees.

Re:FCC '08 Budgetary Resources are $433 Million

[Paiev (1233954)]

In other news, the Republican presidential campaign received an unexpected boost today from an anonymous donor.

Misses the big story

[barbara_unsimplified (878636)]

The current bidding for the C block has NOT stalled at $4.71 billion as the story states. A new bidder [nytimes.com] upped the bid to $4.74 billion a few days ago. This was made possible because there are 2 ways of bidding for the C block: either outright for the whole block, where the bidding reached $4.71 billion, or for 8 pieces of the block individually. If the cumulative price for the bidding of the 8 pieces exceeds the bid for the whole block, then that bid trumps the whole block bid. The cumulative bid for the 8 pieces now stands at $4.74 billion, which means that the C block is still under contention. Today's latest story [nytimes.com] from the NYT gives more info on the auction.

20 billion dollars?

[rk (6314)]

About 2.5 weeks of interest payments to service the debt. [treasurydirect.gov]

Oh well

[Quiet_Desperation (858215)]

I figured my $50 bid wouldn't fly, but a man can dream.

In a similar vein

[by Anonymous Coward]

I'm auctioning the oxygen inside FCCs Washington offices, who'll start me at $1 billion?

Re:

[ScrewMaster (602015)]

I'm auctioning the oxygen inside FCCs Washington offices, who'll start me at $1 billion?

You should auction off the CO2 in the FCC's offices. They need more oxygen in there, not less.

Where have I seen this before?

[pesho (843750)]

Oh yes, the 3G spectrum auctions in Europe [wikipedia.org] .

Re:Where have I seen this before?

[hughk (248126)]

Yes, the 3G auctions in the end did neither the operators nor the subscribers much good. The operators find that they are so burdened with debt that they have to press high charges on fragile business models. Mobile data is very, very useful but access is too expensive in many places for applications to be established. In fact although 3G has been around in Europe for several years now using it has been too expensive for most people.

Re:

[Iloinen Lohikrme (880747)]

I don't agree, I would argue that 3G auctions have either a very low connection or non at all to current pricing of mobile data. To make case: UK had 3G auctions and there you can get an "unlimited" mobile data from T-Mobile with 10 euros per month, where as in Finland, where there were no auctions and no fees to operators, you can get an "unlimited" mobile data from Saunalahti from 9,80 euros per month. Clearly if there would be connection with having or not having 3G auctions, the price difference between

Re:

[TheRaven64 (641858)]

UK had 3G auctions and there you can get an "unlimited" mobile data from T-Mobile with 10 euros per month, where as in Finland, where there were no auctions and no fees to operators, you can get an "unlimited" mobile data from Saunalahti from 9,80 euros per month

This comparison is meaningless without some overview of what 'unlimited' actually means, since no UK operator offers 'unlimited' data means anything even remotely like how the rest of us understand the term (250MB/month is a common figure). Their plan with a 3GB/month cap costs £20/month (EUR26.80) and includes no voice usage.

Off-topic: Self-fulfilling recession prophecy?

[AcidPenguin9873 (911493)]

Some analysts say "looming recession", people think "Oh noes" and stop buying stuff/investing => recession.

Re:

[4D6963 (933028)]

Some analysts say "looming recession", people think "Oh noes" and stop buying stuff/investing => recession.

Yay \o/ that means I'm not the only Slashdotter who watches the Daily Show with Jon Stewart! (For those who don't watch, a guest explained that recession thing to Jon Stewart like last week).

Re:

[timeOday (582209)]

The economy is an act of collective faith, all based on promises. Those pieces of green paper in your pocket? They have value only if people believe they have value. If they stop agreeing it all disappears. Can this lead to recession? Sure, but that's a "glass half empty" kind of statement, since boom times are based on the same principle.

Re:

[SeaFox (739806)]

Some analysts say "looming recession", people think "Oh noes" and stop buying stuff/investing => recession.

I was just talking to my mom about that the other week. She said financial analysts were predicting a six month recession. I said I highly doubted the accuracy as financial analysts seem to have trouble even getting their recession predictions accurate, let alone being able to tell how long it would be. She said Wal-Mart's stock was up and the stores were seeing more business, which generally happen

Could someone please explain to me ...

[IgnoramusMaximus (692000)]

what business exactly does a government have selling a unique public resource to some private interest (thus automatically establishing a govenment backed monopoly), rather then presiding over equitable sharing and access to the said resource by all citizens?

Re:

[khallow (566160)]

Ignoring the power of the government to do so, I find an auction to private companies to a good form of equitable sharing. Everyone got a chance to bid on it. But only the people with the most valuable use for that frequency (and the appropriate financial backing) get it.

Re:

[IgnoramusMaximus (692000)]

Then, as I pointed out previously, you would have found nothing wrong with the government "equitably" selling all roads, bridges and airspace above 100 feet to the highest bidder, following which these local monopolies would be free to charge you $10 (and up) per yard of travel in any direction by any means. You would be free of course to "compete" with them by, for example, inventing a Star Trek style teleporter or using the powers of occult to transport yourself in ways that do not cross their property, o

Re:

[afidel (530433)]

It's called a toll road, while some governments run them by themselves many are sold to private interests.

Re:

[IgnoramusMaximus (692000)]

Which, as I already poined out, is a travesty in a modern society, and if taken to its logical conclusion it would paralyse the entire economy and all functions of that society. The only reason it does not is because the crooks involved are careful to maintain the levels of their thievery and graft just below the threshold of violent reaction by the populace. In some countries, rightfully, that threshold is zero. In the USA and some others, the crooks have been working steadily to de-sentisize the populatio

Re:

[khallow (566160)]

I don't see that as equivalent. I recognize that society has evolved with the expectation that it at worst pays very little for transportation. One shouldn't privatize such a market overnight. But I expect over say, a couple of decades to give society time to adjust, that you could indeed privatize everything you mention.

Re:

[khallow (566160)]

In other words, those who have profited the most by strangling markets can now enlarge there monopolies/oligopolies even further because they can afford it? Sounds like sharing to me :/

Yes, government does receive the proceeds from this auction and hence, profits from this auction.

Re:Could someone please explain to me ...

[IgnoramusMaximus (692000)]

"Equitable" as in for example estabilishing a publicly-owned access infrastructure along with the rules of accessing it, say like, oh I dunno ... roads? Electrical grid?

This is no different, merely a different set of technical issues has to be addressed. Note that this does not imply government running a "business" but rather a type of civil engineering activity governments were involved in since times immemorial, such as road and bridge building.

The "sounding pretty smart to you" method involves selling what is not theirs to sell, in order to allow some monopolist to gouge the public unopposed, while the government gets to pocket a one time bribe and spend it promptly on some wacko foreign military adventure, thus throwing the money down the drain with no return possible to the taxpayer.

In this way the worst possible outcome is achieved: a unique public resuorce is effectively stolen by private interests in exchange for a bribe and the general public is shafted with no recourse.

This idiotic scenario is a direct equivalent of a government selling all roads and bridges in the country to the highest bidder, thus ensuring that toll-booths pop up right at the end of everybody's drive-way asking for $10 fee to travel every yard or some such, regardless of the direction you take driving, cycling or walking.

Re:

[ScrewMaster (602015)]

This idiotic scenario is a direct equivalent of a government selling all roads and bridges in the country to the highest bidder, thus ensuring that toll-booths pop up right at the end of everybody's drive-way asking for $10 fee to travel every yard or some such, regardless of the direction you take driving, cycling or walking.

Well, in my State that's already happening, and to a foreign-owned corporation at that.

Re:

[IgnoramusMaximus (692000)]

How, exactly, do you propose to do that? Send out 275 million transceivers?

No, you design and enforce access protocols, which could be as dumb as Carrier Sense Multiple Access and as sophisticated as the scientists can make them. Depending on usage, some bandwidth ranges could be controlled by government run non-profit backbone infrastructure which could be accessible using those protocols. Etc and so on.

So, which is more in the public interest - giving away a property worth billions of dollars, or selling

Re:

[IgnoramusMaximus (692000)]

It's that last part that is tough. How do you keep different transmitters on the same frequency from tripping over each other?

I already answered that question: Carrier Sense Multiple Access is an ancient protocol designed specifically for radio communications where multiple trasnceivers are operating on the same frequency without any pre-arranged synchronization. Of course being so old and simple I only listed it as an example, much more modern broad-spectrum frequency-hopping systems are available today.

Re:

[IgnoramusMaximus (692000)]

All of which still leaves them in a position to gouge the public for access to public's own property. All these arguments are about how "beneficial" it is for you to have your house taken and then rented back to you. It is really that simple and clear-cut.

You are asking "well yea, my house is now being rented back to me, but if we like ask them to not to use my house to host fascist troops or anything, and if I like can go to the bathroom without paying, then its cool!"

=wireless tax

[troll -1 (956834)]

This is nothing more than a shameless tax on a free medium -- the wireless spectrum.

Historically the FCC has always accepted bids almost without regard to how the winner will use the spectrum and it's overall benefit to the consumer. This time round they have the requirement that the spectrum will be 'somewhat' open to competition by forcing the winner to allow any compatible device to use the spectrum.

But by allowing bids of +$4 billion they leave the winner no choice but to stick it to the consumer in order to get their money back. And that will come in the tried and true method of nickel and diming us for every trivial service they can think of.

The winners in this auction should be the ones who have the best ideas that will best benefit the consumer, *not* the ones who come up with the most bucks. I mean, did the FCC even consider that the 700Mhz part of the spectrum would probably be best used for a meshed Internet and that MIT already has a working prototype for such a network? Sadly we probably just gonna get another phone network based on the old 20th century model that maximizes profit and stifles innovation.

!=wireless tax

[AlpineR (32307)]

To feed a troll - 1...

The spectrum has value to data carriers. They can build transmitters and charge customers money for wireless data access. How much will the carriers charge? As much as the potential customers will pay. And the customers will value the service in comparison to other available sources.

If the carriers got this spectrum for free and had zero competition, then they could charge $1000/minute or whatever customers will pay when the only alternative is no wireless communication. All the p

Reserve not yet met tag

[langelgjm (860756)]

Who tagged this "reserve not yet met," and which reserve were they talking about? There are lots of pieces being auctioned off, and I am not sure about all of them (such as the public safety chunk), but the one that most /. readers are concerned with is the C Block. The reserve for the C Block was met last Thursday.

$208?

[sharopolis (819353)]

Did anyone else read the headline as $208? Maybe it's just my font but for a moment I was planning on bidding myself. I'm not sure what I'd do with a wireless spectrum at the moment, but for that kind of money it'd be worth buying one just to keep around in case of emergency.

Re:Great News!

[SQLGuru (980662)]

I think we should be more worried about paying down our debt http://www.brillig.com/debt_clock/ [brillig.com] than the trillion dollar budget. And even still $20b $1t. Especially considering that the dollar is down in value which makes that number look even worse when we pay out to foreign companies.

Layne

Re:

[everphilski (877346)]

Especially considering that the dollar is down in value which makes that number look even worse when we pay out to foreign companies.

Except most foreign countries hold US debt in ... American dollars. So foreign countries have every incentive to help out an American in a "recession". The debt they hold is less valuable today as it was 6 months ago.

There's a saying, "When America sneezes the world catches a cold" ... it is becoming less true, but is still valid. Look at the markets over the last two wee

Re:Great News!

[u38cg (607297)]

I don't know if I'm having one of those days where everything is just delightfully funny, but having followed your link there, I came to this page. [treasurydirect.gov]

Hilarious stuff, well, maybe not. Until you get to the bottom of the page, where you come to this little gem:

How do you make a contribution to reduce the debt?

Make your check payable to the Bureau of the Public Debt, and in the memo section, notate that it is a Gift to reduce the Debt Held by the Public. Mail your check to:

Attn Dept G
Bureau Of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188

1T/yr was pre-W, now 2T/yr is the mark

[Overzeetop (214511)]

Yes, that's right, a federal budget growth of more than 10% per year, with no new revenue to offset spending. Who was it that we were supposed to elect to get fiscal responsibility?

I really wish Mark Warner [wikipedia.org] were running for president.

Re:and yet

[Bombula (670389)]

It is important to understand what deficit spending is and the rationale behind it. Deficit spending is borrowing money to pay for government activity instead of paying for that activity with tax revenue. The (highly suspect) rationale is that you don't have to raise taxes to get the same results and can thereby dodge the economic problems associated with higher taxation. By borrowing, the liability is passed on to future tax payers where - according to the theory - the economic growth it has fostered will make the debt easier to pay off. It's like starting a business: borrow money so you can build up a company that will eventually grow enough to pay off the initial debt and then some. The problem is that when you're always borrowing this forms a never-ending cycle that causes inflation and thereby reduces real earnings and purchasing power, so the 'growth' that is fostered shoots itself in the foot. It ends up being a case of robbing Peter to pay Paul.

So why is deficit spending attractive? For several reasons. Politically, it is easy to sell "lower taxes!" For the political Right, it is also a way to shovel money into the pockets of the wealthy: about 1/3 of the debt is loaned to the government by rich people in the form of verystable investments - T-Bills, bonds, etc - at around 9% interest.

Re:

[yanagasawa (120791)]

verystable investments - T-Bills, bonds, etc - at around 9% interest.

Yes, except last time I looked t-bills were at 2.2% and t-bonds were at 3.6% - stable but, will it keep up with the inflation you talked about?

Re:

[Brian Stretch (5304)]

The idea behind tax cuts is that the closer you get to the Laffer curve [wikipedia.org], the closer you get to maximizing tax revenue while minimizing economic damage. If that means temporarily running deficits, OK. Think about it: who gets a higher return on capital, the small business owners who make up the bulk of the top bracket taxpayers in America, or Congress? Getting tax rates below the curve is assumed to be too unlikely to think about right now. From a moral perspective it would be desirable but I think most

Re:

[Bombula (670389)]

Laffer curve? You're joking, right? :).

The issue I mentioned is only tangentially related with maximizing tax revenue - the Laffer curve is an intuitive and familiar concept thanks to the many parallels that can be found elsewhere in economics, such as maximizing profit through optimal pricing (margin too high, no turnover = no revenue; margin too low = no revenue). It is easier to think of deficit spending as debt-financing versus financing out of revenues. There are some operational advantages to def

Re:

[SpaceLifeForm (228190)]

I agree with you on the zero tax for earners under $50k/year. And as to any tax loss there, it would be made up through sales taxes, and further stimulation of the economy. Whatever the cutoff, it *MUST* be indexed to inflation, otherwise the darkside will continue to inflate and the consumers will be back where there are now, barely able to afford gas to get to work.

Re:

[Bombula (670389)]

I have no idea where you get that idea from

Always look at the bottom line. 9 cents on every tax dollar goes to paying down the debt: 9%. And of course at the end of the day that is the only rate that matters.

Re:

[Wilden2003 (1220744)]

Your math is off. Let's make up some numbers. 9% of 3 trillion tax dollars = 270 billion dollars. 270 billion dollars in interest paid divided by the total debt of 10 trillion = 2.7% So based on these numbers, 9% of tax revenue it used to pay the average 2.7% interest rate on the total debt. The interest rate is not 9%, that is just the percent of 'income' (cough) that we are using to pay on the interest on the debt, we've already spent. (By 'we', I mean those idiots in DC.)

Re:

[Bombula (670389)]

You're quite right, sir. I stand corrected.

Re:20 billion is enough to screw the american peop

[jcnnghm (538570)]

You say that like it's a bad thing. I suppose you advocate the agency allowing the spectrum to be wasted indefinitely while there is a solution that can free the bandwidth for other uses. It isn't as if the proceeds of this, in part, aren't being used to subsidize the cost of OTA digital to analog converters for those affected. It would appear that you really don't know what you are talking about, perhaps the tinfoil hat is on too tight.