Google Ends Silence On C Block Auction 162
Phurge found a post on the Google Policy Blog in which they lift the cone of silence that had been imposed by regulation over the recently concluded FCC spectrum auction. As some had speculated, Google was in it mainly to force some openness into the wireless industry. "Based on the way that the bidding played out, our participation in the auction helped ensure that the C Block met the reserve price. In fact, in ten of the bidding rounds we actually raised our own bid — even though no one was bidding against us — to ensure aggressive bidding on the C Block. In turn, that helped increase the revenues raised for the US Treasury, while making sure that the openness conditions would be applied to the ultimate licensee."
Smart Move? (Score:5, Interesting)
Very nice!
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Very nice!
Brilliant!
Re:Smart Move? (Score:4, Insightful)
Not to slam Google, but would an "evil" corporation actually admit to doing evil?
Shouldn't we take a closer look at corporations that specifically say, "we do no evil"?
Sorta like when paper companies create commercials on how earth friendly they are right before a new paper mill is built or when they are under investigation for discharging too much pollution.
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Yes. However, it should be noted that Google doesn't say that. They say they have a goal of "Do no evil", they have never, to the best of my knowledge, claimed that they never do.
Of course, that's a point in there favor. It's easier to trust a person who says they try not to sin than one who says they've never sinned. The first assertion is much more believable. The second one is probably lying.
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Well unless we are talking about the devil, shouldn't "try not to do evil" be assumed?
If someone approached you in real life and said "I try NOT to do evil", wouldn't you feel a little creeped out? I mean why is he TRYING not to do evil?
Re:Smart Move? (Score:5, Insightful)
I'd say that's true of individuals (people), but we're talking about corporations here. Corporations are legal entities, but they don't have a conscience. Many corporate boards (dare I say most) use only the law to determine if they should or shouldn't do something. If its not illegal, its fair game. Morals and ethics usually don't factor into their decisions, unless its specifically stated in their bylaws or policies.
Am I wrong?
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No your not wrong, but you didn't answer the question.
Does a corporation that purports to doing no evil warrant more scrutiny than any other corporation? The premi
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Sadly, you are wrong. Though probably not how you meant.
Watch The Corporation [imdb.com]. Corporations are legally required to act solely to increase their shareholders' value. You can act morally, but such action must always be overridden by the shareholders' purely monetary interests, in the case of a conflict. This is, of course, technically, almost always the case.
So, why are you wrong? Because it's not true that morals and ethics usually don't factor in -- they almost never can factor in.
Whate
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Yahoo
Re:Smart Move? (Score:5, Insightful)
I'm guessing (without reading TFA of course) that the scenario went like this. If the reserve price hadn't been met, then the carriers could say, "obviously this spectrum has no market value unless it is for creating a closed network." Then the FCC would declare the auction void and conduct a new auction under conditions more favorable to the carriers and less favorable to the public.
Is stopping that scenario evil? Well, if Google had won, they'd have to put their money where their mouth was and become a wireless carrier themselves. They were hoping the industry would rather let their customers choose the hardware they wanted to use in this spectrum rather than to invite Google in as a competitor.
So it's a win all around. Google keeps the spectrum open for its servies and for its android partners; users get more choice in hardware and services, and the current providers don't have to worry about Google doing to them what they'd planned to do to Google. It's not as lucrative for the carriers as they hoped, but that's what competition is for. They'll make at least a normal profit, but not as much more as they'd have liked, and the public gets better services.
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Still, they've probably got enough of the things they need, other than spectrum, to make the threat of entry credible. The other bits they could lease, hire or buy, if they really wanted to. I agree, it's not their best choice, but it's a heck of a lot better than having their air supply choked off b
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If in fact their executive board paid for it out of their own pockets, off the books, that would be a most serious violation of accounting standards and the law.
Re:Smart Move? (Score:4, Interesting)
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Expenses and outlays of a company ALWAYS come from the customers. A business that does not turn a profit means that it does not cover expenses with funds from the customers. It's also a business that tends to disappear rather quickly, as most people do not like to continually lose money...
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This sort of statement always puzzles me -- why do people assume that the price of goods is strongly dependent on the cost to produce them when there's ample evidence that this is false? Shoes cost $2 to make and are sold for $80, etc.
A company does not think "Oh, we just need to make $x million in profit, and we'll stop there." If a company can produce a widget X at $2, then develops a way to produce it a
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Android phones coming this year (Score:5, Interesting)
I wonder how happy Verizon's stockholders are going to be when they find out that Google was bidding up the price for essentially no reason at all and Verizon jumped in on top of that. not too bad, it seems [yahoo.com]
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The difference is that Google wants it to be hacked.
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Re:Android phones coming this year (Score:5, Informative)
"Hack" in the common parlance is pretty much "to break (into) something." People who insist on other definitions of hack generally push the word "crack/cracker" to refer to this type of black-hat activity.
"Hack" in the classic MIT parlance was a nifty programming trick, or maybe just something really clever. Some people refer to awesome pranks as "hacks" (a compliment to the prankster), although normally it refers to some particularly elegant algorithm or code block.
"Hack" as referring to bad code, as in "hack-job" or "I hacked it together in three hours" is generally called a "kludge" (KLOOJ) by these people.
Maybe someone who actually went-slash-goes there could help out my amateur etymology.
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For required reading: Stephen Levy's "Hackers: Heroes of the Computer Revolution"
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Interesting! I'll have to do a little real-world reading... Unless they make a Kindling^H^H^He version... *ducks*
Defining hacker. (Score:2)
My own preferred definition of (computer {software}) hacker has been "A person who is able to achieve exceptional (programming) results using skill, tenacity, and intelligence, if necessary substituting those personal characteristics for lack of (software development) tools."
Similarly for computer hardware hacker. Also for some other skill sets (typically engineering-related) that don't already have some
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I hacked your mom last night.
Re:Android phones coming this year (Score:5, Funny)
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But don't tell me I can't hack on my software. Hack isn't the first word to have multiple meanings, it's easy to tell what someone means by the context.
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So how does this work? (Score:5, Interesting)
"As you probably know by now, Google didn't pick up any spectrum licenses in the auction. Nonetheless, partly as a result of our bidding, consumers soon should have new freedom to get the most out of their mobile phones and other wireless devices."
also,
"But it was clear, then and now, that Verizon Wireless ultimately was motivated to bid higher (and had far more financial incentive to gain the licenses)."
Now, if they pushed Verizon to bid higher to win the contract won't they just charge the end users more?
Re:So how does this work? (Score:4, Informative)
I think spectrum price and end-user price are way too many steps removed to really have a direct effect. Especially since the wireless market has actual, fierce competition
What competition? (Score:2)
Especially since the wireless market has actual, fierce competition
Competition is actually extremely weak- everyone offers pretty much the same "minutes" and $ for said "minutes". Carriers then make their money on hidden fees and varying out-of-plan airtime charges and such. Among other things, if you go over your minutes, it costs you FORTY FIVE CENTS A MINUTE with AT&T, and that's JUST for AIRTIME!
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How is $80+/month for 2 phones and 500 minute competitive? They pay next to zero for each marginal phone.
Now if it was $10/phone unlimited, then I could see how you may say it is competitive.
It's competitive with other carriers.
Basically the marginal price is more connected to what people will pay for a service, and less what it actually costs to provide that service.
There isn't enough competition in the wireless market to drive the price down to the marginal cost of delivery, unfortunately.
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Now, if they pushed Verizon to bid higher to win the contract won't they just charge the end users more?
That was my first thought reading the summary - bidding-up just to raise the final price is not a cool thing to do, and does not benifit citizens/tax-payers/consumers, as it will increase the cost of anything deployed in the C Block, and delay uptake. However ...
Google's top priority heading into the auction was to make sure that bidding on the so-called "C Block" reached the $4.6 billion reserve price that would trigger the important "open applications" and "open handsets" license conditions. We were also prepared to gain the nationwide C Block licenses at a price somewhat higher than the reserve price ....
We're glad that we did. Based on the way that the bidding played out, our participation in the auction helped ensure that the C Block met the reserve price. In fact, in ten of the bidding rounds we actually raised our own bid -- even though no one was bidding against us -- to ensure aggressive bidding on the C Block.
It does sound like they were only bidding up against themselves when the price was below the reserve - but I don't know why they would bid below the reserve to begin with if they were genuinely determined to see the reserve met, and genuinely will
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In turn, that helped increase the revenues raised for the U.S. Treasury.
I still find it extremely odd that they would mention this as a "good thing" at all. Seeing as how the number of rounds were not fixed (bidding continued until a round occurred with no increases in bids), the bidding strategy they described was not the best way to obtain their stated goals - they should have placed their first bid at the reserve price and then not bid higher until/unless someone else outbid them. Unless they were bidding themselves up above the reserve because had an unstated goal of running up the price for their competitors.
It's possible that either the auction rules prohibited you from making large bid increments, or that the bids were anonymous and that if they jumped straight to $4.6b it would be too obvious who they were.
Why underbid? (Score:3, Interesting)
Re:So how does this work? (Score:4, Insightful)
Step 2: Google bids on the auction, but only until the reserve price is met. This ensures that the openness conditions stick, whether they end up winning the auction or not.
Step 3: Google stops bidding, and Verizon outbids them. From Google's perspective, they have what they came for, and actually buying the spectrum isn't relevant.
The confusion is that apparently the auction is sufficiently arcane that Google had to keep the bidding up themselves to get the price above the reserve price (the auction didn't start at the reserve price), but that once it got there Verizon did in fact outbid them.
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Nah... Verizon was just waiting to snipe the auction at the last minute.
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You're talking Verizon. Their pricing never is based on cost, only on what they think they can get away with charging.
My favorite is the random fees on Verizon Wireless bills that go straight to Verizon that get lumped in with the other fees.
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Most services Verizon offers aren't really in competitive markets. If they were, their costs would be the largest factor in the prices they charge.
Monopolies and oligopolies are when the price charged for something is independent of the actual cost.
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False. In fact, the truth is very close to the opposite.
First, there are plenty of non-monopoly markets where price is indpendent of the actual cost. Chanel doesn't have a monopoly on litle black dresses, but they can charge $4000 for theirs. The Gap cannot charge more than $100. Something is priced at what the market will bear. The "value" of something is what it can be sold for, not "what you think it i
Sunk costs and Consumer costs. (Score:2)
The biggest question is how much competition they will have. This newly reallocated spectrum will primarily be used for some sort of wireless broadband. The bandwidth available will make existing 2G, 3G wireless technologies look like a joke, so these are not serious competitors. It will overlap with the hardline broadband market somewhat, so there will be some competition there. But the lar
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Implicitly (Score:5, Funny)
Film at 11.
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Wow... is there no good that Google can't do? (Score:5, Funny)
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Open in theory (Score:3, Interesting)
A little too altruistic (Score:2)
If they can save the world in the process, then good, but they're in it for the buck... and IMO that's the way it should be. I don't want a nanny for a company, I want them to make me shit to play with.
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Re:A little too altruistic (Score:5, Insightful)
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eBay (Score:5, Funny)
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Re:eBay (Score:4, Funny)
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Google you just did evil (Score:4, Insightful)
But ultimately the winners are going to have to make their money back by sticking it to the consumer. The bidding system is basically a government tax on something that's free, the airways. So the revenues Google so kindly helped raise for the Feds are ultimately gonna be paid for by the end user.
Re:Google you just did evil (Score:4, Interesting)
Re:Google you just did evil (Score:4, Insightful)
It will be interesting to how this admission of gaming the auction system plays out.
Verizon could file a complaint.
-- and/or --
Google may find itself in hot water, if this admission means that Google violated any federal bidding rules...
Re:Google you just did evil (Score:5, Insightful)
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This is not related to the license cost.
Exactly. The only way to determine a price that actually works in the marketplace is supply and demand. That is why communism was and is always doomed to fail because it has no functioning price system to direct efficient market activities. The labor theory of value [wikipedia.org], or the notion that the price of a good or service is proportional to the amount of labor or capital that went into producing it, is wrong and the parent is right. Verizon will charge the maximum price that the market is willing to bear no matt
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Precisely. In fact, Verizon's bid was calculated something like this:
(Predicted revenue from service on the spectrum) - (cost of providing service) - (reasonable return on investment) == maximum spectrum bid.
They already figured on what consumers were willing to pay for the services they'll sell on this spectrum. If the price of the spectrum went too high for those pricing e
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That's somewhat true, but not entirely. Pricing is often more complicated than people think. When you buy something, you aren't necessarily being charged cost plus some fixed percentage.
So to avoid getting theoretical, my point is that Verizon has probably done a calculation already of what price will maximize their profits. So let's say (hypothetically) they can provide service for $10/month and make no profit, or they can charge $200/month and make $190 profit. Why wouldn't they just charge $200/mont
Yes and no... (Score:2)
As for yuour concern, it's true that the winners will need to charge more to make back the money, but in reality it's a small f
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Nor are the airwaves "free" -- they're a natural resource that the government claims ownership of. Use of them is rented out under certain conditions, which is how the FCC can get around the First Amendment.
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Exactly. It also forces out any type of small players for the wireless spectrums and decreases competition so that only the very rich can compete. It totally goes against capitalism to do this, it's really stupid. I would have expected more savvy behavior from Google.
So your preferred model would be to have absolutely no spectrum regulation, interference be damned? Yes, only the rich were able to compete for the C block, but I don't think anyone who can't afford to put down a few billion dollars on a spectrum license is in any position to build out a nationwide wireless network. There were hundreds of local spectrum licenses in this auction which the smaller players were able to bid on and obtain. Those smaller players are still pretty rich compared to you or I, grante
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Throw in a few dozen metal coathangers and we can get started on construction.
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I'll believe it when... (Score:5, Interesting)
A popular thing for telecoms to do these days seems to be re-interpreting words in contracts. "Unlimited access" is re-interpreted to mean "Unlimited connection time", even though there are at most 744 hours per month. "Unlimited internet service" is re-interpreted to mean "unlimited, as long as you don't transfer more than XXGB a month". I don't even want to get into what Comcast redefined to get their computer-impersonating policies to fly. Companies are redefining words like it's going out of fashion.
Google may be cheering and patting each other on back for a job well done, but to be honest, I don't think they've achieved anything they've set out to do. All they've done is get the FCC to say "Oh yeah, and the network must be open to other devices", while everyone nods "M-hm, oh yes of course" while looking at their toes.
Going so far as telling everyone how clever they were the first opportunity allowed seems a bit premature. The network's not up, the company's services aren't for sale, the consumer-end terms-of-use contracts aren't drafted, so what exactly are they cheering about when they got a telecom company to say "Okay, we'll 'allow' 'open' 'devices' and 'open' 'applications'"?
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The fact of the matter is that Verizon has no serious issue with opening up access because it can save them money. Right now Verizon provides all technical support
Not buying it (Score:2, Flamebait)
"Really, we just bid billions of dollars for something we didn't really want out of the goodness of our hearts. Honestly, we didn't even want it, that's the real reason why we didn't win. Really. Come on. I mean it."
I think Google generally has a lot of good intent, but this claim smells like BS to me.
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Openness is in Googles self-interest (Android anyone?), I don't see anyone claiming it's out of the goodness of their hearts.
Open-ness is Evil? (Score:2)
Pricing Telecom Into the Old Boys' Club (Score:2)
... and on that day, you will truly meet The Man. (Score:2)
You and I do not share axioms (Score:3, Insightful)
I don't consider that a good thing. It won't cause the US government to take less of anybody's money, and it will make it easier for the US government to take actions which I consider wrong.
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Spin Cycle? (Score:2, Funny)
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Re:Interesting (Score:5, Informative)
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Re:Interesting (Score:5, Insightful)
In effect Google was saying "we want the block to pass the $4.6 billion mark so badly that we'll pay it ourselves if we need to"
Once bidding had passed that mark, they didn't really care if they or someone else footed the final bill. The thing they wanted had come true.
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No company that can put that much money up would be able to face their shareholders if they won and didn't create a revenue stream out of it.
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In this case, the bidding was absolutely legit, as it is in your case. If Google ended up "stuck" with the C block, well, they'd probably license it out just as they say, but their intent was clearly just to force certain provisions.
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Let me correct it for you:
In the US, it's okay to lie as long as you admit to misspeaking about it later.
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Ham radio should have been on the forefront of cellphone tech. If the band were licensed specifically for non-profit but private use we could have our cake and eat it too. Tie the systems together with VOIP, microwave or wireless mesh and we can rid ourselves of the phone company cartel.