Google Ends Silence On C Block Auction

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?

So they artificially bumped up the price to make AT&T and Verizon have to pay more?

Very nice!

Re:Smart Move?

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.

Re:Smart Move?

Well unless we are talking about the devil, shouldn't "try not to do evil" be assumed?

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?

Re:Smart Move?

Well, I don't know a lot about the details, but it sounds like the idea is to make the wireless companies bid for the spectrum under the current conditions of sale.

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.

Re:Smart Move?

Haven't you figured out by now that corporations do not pay for things like that, their customers do?

Sort of. That would be 100% correct if corporations could always price their products and services however they wanted. The reality is that they can't really build everything into their pricing structure. In a free market economy, there are other factors such as competition and the law of supply and demand. Some costs do come out of a company's bottom line.

Android phones coming this year

The real take away from this press release is that Google is expecting that the first phones based on Android will be released later this year. That is good news for those who are interested in open platforms and enjoy hacking. link [google.com]

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]

Re:Android phones coming this year

"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.

Re:Android phones coming this year

How can you hack his mom? She's an open system!

So how does this work?

From TFA:
"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?

Now, if they pushed Verizon to bid higher to win the contract won't they just charge the end users more?

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

Re:So how does this work?

Step 1: Google gets FCC to adopt "openness conditions". These conditions will be dropped if the auction fails to meet the reserve price, so it's in Google's interest to make sure the reserve price is met.

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.

Implicitly

Slashdot believes whatever google says; all other corporations lying scum.

Film at 11.

Wow... is there no good that Google can't do?

Helping pay off the National Debt. What will they take credit for next?

Open in theory

It seems logical the telcos will try to hamper the unwanted participants on their network, just like they did with the DSL resellers. Nothing like being the operator.

eBay

Don't you get banned from eBay for doing that?

Re:eBay

OTOH, in government auctions you can't sniped...oh, wait ...

Google you just did evil

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 ...

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

The bidding system is basically a government tax on something that's free, the airways.

The airways are "free" only in the same sense that natural resources like oil, gold, and lumber are: the government may not have paid anything for them, but they are still in limited supply. Should the government not charge for mining rights on public land?

Re:Google you just did evil

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

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.

Are you naive enough to believe that if Verizon Wireless paid less for the license they would drop the price to the consumer? The consumer will be charged, and will pay what the market will bear based on competition. This is not related to the license cost. If Verizon paid too much for the license and they can't make a return on their investment while still being competitive in the market then that is their problem. What Google did was feint competition to keep everyone honest with their bids.

I'll believe it when...

... the winning company actually *implements* the "intended" level of openness and has it in their terms-of-use section in their contracts.

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'"?

Re:

Didn't they specifically make it blindingly clear that by buying google stock you're agreeing that you're in it for the long run? I thought that was the whole point behind the google stock value was that they're looking at the long term and not worrying ab

Re:A little too altruistic

All companies are theoretically like that, since stock prices are based on the net present value of future dividends. CEOs only started being short sighted when stock options encouraged them to fool the market into overvaluing the shares in the short run, at the expense of the long run value of the company -- but the long run didn't matter since the options would be cashed in long before then. So companies would do things like cut back too far on R&D -- hurting the company in the long run, but boosting short term profits and, because traders were assuming the increased profitability was permanent, boosting the stock price as well. Basically it was a way for CEOs to use their options to scam the shareholders.

Re:Interesting

They manipulated the pricing to reach a certain threshold. Once it's bought for a certain price the owner of the license must conform to certain rules of "openness" for what can used on that spectrum.

Re:Interesting

But they DID want something. There were certain openness requirements that would only happen if the bidding moved past the $4.6 billion threshold.

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.