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Google Businesses The Internet Communications Wireless Networking The Almighty Buck United States Hardware

FCC Puts 4.6 Billion Minimum Bid on Spectrum Auction 165

Posted by Zonk from the you've-got-to-be-serious-about-this dept.
ChainedFei writes "Wired News notes that the Spectrum auction is moving forward, with the FCC placing a minimum bid for the C-block spectrum being offered at $4.6 billion. That, coincidentally, was the amount that Google fronted as a minimum bid to endorse certain open standards for the spectrum being sold. This is essentially a move to shut out smaller possible competitors while also maximizing the money the auction will generate for the grade-A areas of the spectrum. In addition, any single bidder wishing to purchase the entirety of the spectrum must front a minimum of $10 billion. 'According to the FCC, nearly all of that C block aggregate reserve price will go toward a package of U.S. national licenses. This portion of the spectrum also happens to be the one with two open access conditions attached to its sale mandating that all devices be allowed to access the band and that all applications can be able to run across the network. If the reserve price isn't met, the auction will be rerun without these two conditions in place, according to the FCC.'"
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FCC Puts 4.6 Billion Minimum Bid on Spectrum Auction More

FCC Puts 4.6 Billion Minimum Bid on Spectrum Auction

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  • Not really shutting out smaller competitors (Score:4, Insightful)

    by Anonymous Coward on Tuesday August 21, 2007 @01:57PM (#20307705)
    I.e., if you wouldn't have the money to bid up and up, then you wouldn't be in the same competition anyway.

    Although, to be fair, it might force the bidding war to be shorter -- but knocking out the competition right from the start because they can't afford it doesn't really affect the final outcome. It just forces the bids to be realistic from the start.

    So much political agenda on ./ these days

    • Re: (Score:3, Insightful)

      by Stormx2 ( 1003260 )
      Well, this is a political issue. From my understanding, the government is selling rights to use certain frequencies of electromagnetic waves - a hugely important part of physics and the universe we live in. A bunch of people object to this, that the US government has some kind of automatic ownership of anything that can generate a profit unless it sells it.

      The jist is that a physics fundamental isn't something we can buy and sell.

      Do correct me if I'm wrong :)

      • Re: (Score:3, Insightful)

        by Embedded2004 ( 789698 )
        Yeah, land is just a physical matter to think the US government wants to buy and sell land. pfft.

        The jist is that a physics fundamental isn't something we can buy and sell.
        • You hit the nail right on the head there, actually. We're working in the present day here, and if the U.S.A. were to start up a new colony and start selling off the land (N.B. this hasn't happened in Iraq - it is an occupation, the US government doesn't own the land) it would be illegal (and a war crime, I think). So your example rings entirely true, but perhaps not in the way you wanted.
          • Uh. I don't follow your reasoning. Yes annexing land from another country would be illegal. Selling the physical matter within the United States is perfectly legal on the other hand.
          • So, if, hypothetically, an undersea volcanic eruption were to cause a new island to form in the Pacific, and the USA sent a warship there before anyone else, and claimed it, who would own it? If the answer is the USA, would they then be allowed to sell it to private individuals? If not, why not?
            • 'So, if, hypothetically, an undersea volcanic eruption were to cause a new island to form in the Pacific, and the USA sent a warship there before anyone else, and claimed it, who would own it?'

              It depends on where it is. But for the sake of this example lets say it pops up in international waters. If that is the case then no, according to treaties nations can no longer plant a flag and claim international territory. That said, even in the old days those claims were only worth the weapons used to defend them

      • Re: (Score:2, Troll)

        by Control Group ( 105494 ) *
        If you have an alternative method for allocating spectrum, I'm sure everyone would be interested in hearing it.

        (Note: a method which does not involve a central regulatory body is, in fact, a method based upon "he with the most broadcast power owns the spectrum")
        • Actually not completely. Wi-Fi can currently share spectrum to some degree. There are a lot of reports that with slight alterations of the receivers you can have 2 broadcast on the exact same spectrum and be able to digitally choose which one you want to listen to. But yes, for the most part whoever broadcast the loudest wins, but why not. Thats already true really, whoever has the money to broadcast loud has the money to buy spectrum from the government. And no two stations reallly want to be broadcasting

          • Re: (Score:2)

            by norton_I ( 64015 )
            wifi can share spectrum to to tight regulations on broadcast power and antenna design, and that the major protocol running over it, 802.11x has been designed to cooperate more-or-less with itself, and to avoid low levels of narrowband interference (through DSSS). If the 2.4 GHz band were anywhere near capacity with a heterogeneous collection of devices/protocols, it would completely fail. Even so, it is fairly susceptible to outside interference.

            But yes, for the most part whoever broadcast the loudest win

        • Re: (Score:2)

          by zymano ( 581466 )
          openspectrum.org

          yo you asshole.

          • Re: (Score:2)

            by Jott42 ( 702470 )
            Openspectrum still needs somebody to set the rules (protocols, power levels, certifications etc.). And there are numerous problems that are not solved yet by the people advocating this idea, the most important ones being detection of very low power transmitters, such as GPS and mars satellites, and the hidden node problem. (A is transmitting to B which is reciving. Now add transmitter C, which is much closer to B than A, and thus will drown out the transmission from A if it start transmitting also. The prob
    • Belongs to the public. The public needs to fight to regain the airwaves.

      Spectrum shouldn't be held hostage for filling government coffers.

      We could have very cheap phones for everyone. Not with ATT guy running the FCC.

      • Re:Need to take them to court. Airwave freedom (Score:5, Insightful)

        by CodeBuster ( 516420 ) on Tuesday August 21, 2007 @04:20PM (#20309945)
        Belongs to the public. The public needs to fight to regain the airwaves.

        The public never lost its property rights to those airwaves, we simply elected to rent them out to the highest bidder so that the proceeds of that auction could be used to fund the purchase other goods and services that we the public wish to conusme rather than attempting to operate them directly ourselves with all of the risks and costs that that entails. The government, acting on behalf of and in the interest of the people, is our agent in that sale. Now, you might argue that the government is squandering the proceeds or not getting the best possible price, but really we never lost control of the airwaves.

        Spectrum shouldn't be held hostage for filling government coffers.

        The government coffers are really *our* coffers in that the government uses this money to provide us with public goods that we like to consume. If the government did not receive this money from the auctions then it would have to raise the cash necessary to provide these public goods in other less desirable ways, such as raising taxes.

        We could have very cheap phones for everyone. Not with ATT guy running the FCC.

        Selling the right to use the spectrum at auction and then allowing the market with competition to decide the outcome yields the best and most fair result for everyone. You will have your cheap phone for everyone much faster, and at a much better price, from the market than you would from government control and central planning. Remember here that wireless spectrum is not entangled in "natural monopoly" scenarios with last mile physical infrastructure problems so the market is much more able to reach the optimal result more quickly than might be the case in fiber optic or cables and other utilities.

        • Re:Need to take them to court. Airwave freedom (Score:5, Insightful)

          by zymano ( 581466 ) on Tuesday August 21, 2007 @04:49PM (#20310359)
          The public doesn't own the airwaves. It's owned by corporate america because they are the only ones that can afford the ridiculous auction prices. What would happen to the average citizen if they broadcast something on unused piece of spectrum owned by the private sector? If you guessed thrown to jail, you would be right.

          The government coffers are really *our* coffers in that the government uses this money to provide us with public goods that we like to consume. If the government did not receive this money from the auctions then it would have to raise the cash necessary to provide these public goods in other less desirable ways, such as raising taxes.

          You may find it shocking but maybe our government spends money excessively just to buy votes. Some political experts do suggest this as happening. And if the government is so good with our money then lets give them 'all' of our money. That would surely solve all of our problems.

          Selling the right to use the spectrum at auction and then allowing the market with competition to decide the outcome yields the best and most fair result for everyone. You will have your cheap phone for everyone much faster, and at a much better price, from the market than you would from government control and central planning. Remember here that wireless spectrum is not entangled in "natural monopoly" scenarios with last mile physical infrastructure problems so the market is much more able to reach the optimal result more quickly than might be the case in fiber optic or cables and other utilities.

          Creating a monopoly for just 'ONE COMPANY' to horde spectrum does not equal the free market. The gov makes makes a buck and that doesn't always filter down to average Joe citizen

          A better idea is to free and democrotize our spectrum much like the internet or even better than the internet.
          • Pick yourself up a Citizen's Band radio and see how that compares with a regulated portion of the spectrum.
          • The public doesn't own the airwaves. It's owned by corporate america because they are the only ones that can afford the ridiculous auction prices.

            It is *rented* by corporate America with certain rights and privileges, including exclusivity of their right to transmit on the selected frequencies, it is not *owned* by corporate America. I don't care that I cannot personally afford the cost of exclusive access to a desirable band of public frequencies. I for one would rather have the money than be able to p

            • Re: (Score:2)

              by zymano ( 581466 )
              It is no different than people wanting municipal water,roads or electricity. There is only one resource and it shouldn't be hoarded by a single company. The public is uneducated about this and thinks that giving the monopoly over for a sum of money is a good deal but where do you think the companies get the money to pay these prices? By billing the customer. All the FCC is doing is shifting "taxes" from something the tax payer is able to notice to a bump in the price you pay for a service. It's much easier
              • The auction & the monopoly keep prices high which I am against.

                If you don't like the price then do not purchase the product. High end wireless services are not a necessity of life. The auction ensures that only the serious bidders, who in theory are best able to implement and roll out the new technologies, are given serious consideration for purchasing the spectrum. Would you want to entrust the spectrum to some low rent mom and pop shop in Peoria or one of the big corporations like Google? How woul

  • Great (Score:2, Insightful)

    by j.sanchez1 ( 1030764 )
    This portion of the spectrum also happens to be the one with two open access conditions attached to its sale mandating that all devices be allowed to access the band and that all applications can be able to run across the network. If the reserve price isn't met, the auction will be rerun without these two conditions in place, according to the FCC.

    Great. So if AT&T outbids everyone, and comes in under the reserve, then we can all kiss the open spectrum goodbye. I wonder how much the FCC charged AT

    • Re: (Score:2, Insightful)

      by Anonymous Coward
      If Google puts its money where its PR Department is, then either it'll win the auction, or someone will outbid them at a higher-than-reserve price, since the FCC set the reserve price to the amount Google had suggested it would pay for the spectrum.
      • In other words, Google put in the first bid and set the auction's floor. The only bad news here is that Google bid such a huge amount to start with; this spectrum could easily go for $10 Billion, and I wouldn't be surprised with a number higher than that. Roughly, that's 10% of Google going into just buying the rights to use the spectrum, not including building all of the necessary equipment to run it, hiring the people that will run it, and figuring out a business model to provide access to it.

        That is,
    • Wait -- can someone clarify this for me:

      Is the FCC using "reserve" and "starting price" interchangeably? Or are they two separate things (similar to an eBay auction), where there's a starting price for the bidding, and a much higher, secret reserve price?

      It sounds like the FCC did what Google wanted, and are running the auction with the interoperability and open-access mandates in place. And they're starting the price out at a level ($4.6B) that Google said they would pay, given those conditions. So that se

      • Re: (Score:2)

        by Surt ( 22457 )
        No, a bid of 4.6B, if the only bid offered, will be accepted. It is the starting and reserve price for the auction.
        The FCC did half of what google wanted (and not really the important half).

      • From actual FCC text we propose to adopt the following block-specific aggregate reserve prices to be used pursuant to this proposal: Block A, $1.807380 billion; Block B, $1.374426 billion; Block C, $4.637854 billion; Block D, $1.330000 billion; Block E, $0.903690 billion.

        So yea 4.6+ is the exact reserve and I assume starting bid.
        Its not a secret reserve, that is rarely done in the real world, just ebay.

    • Re: (Score:2, Interesting)

      by dattaway ( 3088 )
      Considering the head of the FCC is a former AT&T lobbying professional, AT&T wrote it for them at no charge!

    • Re: (Score:2)

      by tknd ( 979052 )

      Cash and Short Term Investments: 11,935.92 million as of 2007-03-31. Source. [google.com]

      Take one for the team Google!

    • Re: (Score:2, Informative)

      by tomblag ( 1060876 )
      Ars has much better info and commentary on the auction. Basically tho, Att can try to outbid google, however, there are requirements that the auction winner has to abide or they lose the spectrum.

      http://arstechnica.com/news.ars/post/20070815-700m hz-auction-whats-really-up-for-grabs-and-why-it-wo nt-be-monopolized.html/ [arstechnica.com]

    • Simple Question (Score:3, Informative)

      by COMON$ ( 806135 ) *
      Regarding open spectrum. I don't deal with wireless tech that much so this may just be a stupid question. I understand the need to regulate natural resources to avoid collisions. But in all seriousness why does the FCC get to "sell" something they do not really own? Just a few months ago the community was all up in arms about DNA being copyrighted. What is the difference here? The FCC will not regulate the 700MHz spectrum afterwards, they will not do anything with it once it is sold so why the asking
      • is certain protections of the bands.

        Of course, people who do less knee jerking and make an effort to use there heads all ready knew this.

        • Re: (Score:2)

          by COMON$ ( 806135 ) *
          who do less knee jerking and make an effort to use there heads all ready knew this.

          Evidentally that would not include you.

          What I am asking, if you would please remove your knee, is what is the company getting out of this either way the spectrum will be free to use for any application and anyone to use, why dont they just open it up?

          This portion of the spectrum also happens to be the one with two open access conditions attached to its sale mandating that all devices be allowed to access the band and tha

          • Re: (Score:2)

            by COMON$ ( 806135 ) *
            Sorry, Read FCC not FTC.

          • Re:What they are selling (Score:5, Insightful)

            by fyngyrz ( 762201 ) * on Tuesday August 21, 2007 @03:44PM (#20309359) Homepage Journal

            What you have to understand is that the purpose of the FCC is to take complete and absolute control as possible of the natural resource of the EM spectrum, and make that resource available to corporations to resell to the citizens at a profit, as well as carve off a few chunks for the government to use any way they like.

            The citizens are only allowed the tiniest possible token portions of the resource, with usage of those portions additionally limited in many critical ways. They do all this under the guise of "protecting" the resource.

            Once you wrap your head around this, everything the FCC does makes sense.

            The FCC probably qualifies as one of the most corrupt agencies of the US government in the sense that what it does is extremely disjoint from the actual interests and needs of the public, and intentionally so. The US government is supposed to serve the interests of the people, not the corporations.

      • Re: (Score:2)

        by necro81 ( 917438 )
        It is true, in a sense, that the FCC does not "own" the spectrum. According to law, the airwaves belong to the people. In order to use the airwaves, companies must negotiate the right to use a portion of the radio spectrum. But, rather than go door-to-door and ask every citizen if it is OK to use the airwaves, companies negotiate with the citizens' representative - the government. And, because access to the radio spectrum has value, the FCC doesn't just give the spectrum away, but rather tries to fetch

        • Here's an idea; auction the spectrum, but make the bids service promises rather than money. The bidder who will offer the greatest coverage, lowest cost (to end users) and greatest amount of choice in terms of connecting devices gets the spectrum. If they don't deliver on their promises, they lose it, and it goes to the next bidder.

          We tried auctioning bandwidth for 3G mobile phones in the UK, and it was a disaster. The operators had to keep bidding, or they would become uncompetitive when everyone else

      • Re: (Score:2)

        by SEE ( 7681 )
        Under U.S. and international law, the U.S. Federal Government is effectively the owner of all spectrum longer than the near infrared in the U.S. There's a certain amount of international law, codified in treaties, dealing with certain segments, and broadcasts across borders, and such. There is then the frequencies the Federal Government directly uses or has reserved for its own use (mostly military). The FCC is the agency in charge of everything not allocated under international law or for Federal use.

        Th

  • n00bs (Score:5, Funny)

    by Experiment 626 ( 698257 ) on Tuesday August 21, 2007 @02:04PM (#20307795)

    Why are they setting a minimum bid? They should just start it at $0.01 and keep saying "reserve not met" until it passes the $4,600,000,000.00 point.

  • Bad Move (Score:5, Interesting)

    by JaredOfEuropa ( 526365 ) on Tuesday August 21, 2007 @02:08PM (#20307857) Journal
    This reminds me of the auction for UMTS licenses that were held in the Netherlands a few years ago. This was back in the mad days when investors and corporations paid silly prices for cable and telco companies. UMTS was the next big thing, and companies were eager to bid for the licenses. So, politicians ended up congratulating each other on how much money they raked in for the public coffers... and companies suddenly found themselves so strapped for cash that they no longer had the money to invest in the expensive rollout of UMTS itself, or even for interim technologies such as EDGE. We were stuck in the stone age with GPRS, and when UMTS finally appeared on the market, it was years late, with lousy coverage, and the plans were horribly expensive (at first it wasn't even available to consumers; only to corporate subscribers). The auctions set back the development of our telco infrastructure by years.

    People in favour of these auctions seem to forget that companies are not in it for charity, and investors like to see a reasonable return on the money they put in. The cash for these licenses have to come from someone, and that someone is you, the dumbass consumer.

    • Translation (Score:3, Insightful)

      by Anonymous Coward
      Regulation and selling of otherwise "free" bandwith is little more then another hidden tax.

    • Re:Bad Move (Score:5, Interesting)

      by Yer Mum ( 570034 ) on Tuesday August 21, 2007 @02:31PM (#20308197)

      The same also happened in the UK.

      In European countries where they held a 'beauty contest' (operators bid less money but also had to promise to roll out services and coverage) the result was decent services from the start at cheap price for the end consumer. E.g. Norway.

    • Re: (Score:2)

      by brarrr ( 99867 )
      Hey man, GPRS is 3G here in the US! What is this silly talk about it being stone-age and that there's something new. Silly foreigners.

    • People in favour of these auctions seem to forget that companies are not in it for charity, and investors like to see a reasonable return on the money they put in. The cash for these licenses have to come from someone, and that someone is you, the dumbass consumer.

      WTF? Oh the poor, poor telecoms companies...

      They didn't have to bid that high, the only compulsion was their own. They could all have bid £0.01, but they didn't, they chose instead to add many many zeros.

    • People in favour of these auctions seem to forget that companies are not in it for charity, and investors like to see a reasonable return on the money they put in. The cash for these licenses have to come from someone, and that someone is you, the dumbass consumer.

      On the contrary, we are keenly aware of this fact. It does not matter that some companies overpaid, their licenses will be liquidated along with the rest of their assets in bankruptcy and resold to the highest bidders. This process will contin

    • Re: (Score:2, Informative)

      by leighklotz ( 192300 )
      >So, politicians ended up congratulating each other on how much money they raked in for the public coffers... and companies suddenly found themselves so strapped for cash that they no longer had the money to invest

      We had two of these fiascoes. One was Nextwave, which overbid and promptly filed for bankruptcy back in 1996, trying up spectrum for ten years, at which point they started selling their licenses to incumbents such as Verizon. Here's a summary [internetnews.com] from 2005:

      NextWave declared bankruptcy after defau

  • What use does Google plan to make of these frequencies? I can't imagine doing wifi of 700mhz.

    • Re:Use of this frequency (Score:5, Insightful)

      by tgatliff ( 311583 ) on Tuesday August 21, 2007 @02:25PM (#20308121)
      700mhz is an almost ideal frequency. Its is low enough to penetration buildings (Unlike Ghz), but is still high enough that shadowing would not be a problem like with the lower frequencies...

      To me, the company that is really missing the boat on this is M$. Their cash holdings trump anything Google can come up with and could easily buy the entire frequency map. The uses for this are endless... Iridium v2 I think are the best idea from a longtimer standpoint. They could sell low cost packages where you put a small dish on your house and get basic services for free. Then have an access point built directly into the unit... Instant national WiFi coverage!! :-)
      • We don't know that M$ isn't going to bid, there's nothing preventing them from doing so. It wouldn't suprise me to see M4 make a bid, and perhaps Apple too. But lets face it, more than likely the telcos are going to buy the vast majority of the spectrum and lock it up.
        • Microsoft would be very difficult to outbid if they *really* wanted the spectrum bad enough. It would probably take a coalition of telcos to amass enough capital to outbid them, they have $40+ billion in high liquidity short term securities (basically the same as cash) and cash. What is the market capitalization of the individual telcos like Verizon, AT&T, Sprint, etc?

        • Re: (Score:2, Informative)

          by bensch128 ( 563853 )
          If some of the wireless device manufacturors got together and put together a consortium to bid for the spectrum, I don't see how the big telcos could match the bids.
          att and verizon are big but not that big. I guess we'll see during the bid...

          actually: ignore me, from forbes 500, I see that verizon is 13th with 93b revenue and att is 27th with 63b. The closest techie is M$ with 44b (all 2006 numbers)
          So, it's not a streach to see this happen... :(

          Ben

      • Re: (Score:2)

        by jandrese ( 485 )
        Yes, because Iridium was such a massive success...

        I've actually had to use Iridium modems in the recent past and I can tell you that the service is worse than you remember it but just as expensive.
        • Iridium failed because of two reasons. First, failure of concept in that you could never build a reasonably sized cell phone that could transmit about 100 miles to reach one of the low orbiting satellites. The second reason was that their design was basically just 9600 baud modems which make them almost useless beyond talking. Also, the need for connectivitiy in the 1980's was not that high. Today having a large data pipe is becoming very important...

          In my opinion, the first company that could have a la

    • Re: (Score:2, Insightful)

      by skoaldipper ( 752281 )
      A great article [gigaom.com] explaining the reasoning.

      Effective range:

      its broadcast-attractive physics (like its ability to penetrate walls)

      Out with the old UHF, in with the new:

      analog television broadcasters to clear the 700 MHz airwaves on Feb. 17, 2009.

      And, cost:

      building a nationwide wireless network over the 700 MHz spectrum is around $2 billion versus a nationwide 1900MHz PCS that costs approximately $4 Billion.

  • The reserve bid is old news (Score:4, Informative)

    by QuietLagoon ( 813062 ) on Tuesday August 21, 2007 @02:12PM (#20307921)
    with the FCC placing a minimum bid for the C-block spectrum being offered at $4.6 billion. That, coincidentally, was the amount that Google fronted as a minimum bid to endorse certain open standards for the spectrum being sold.

    An article [arstechnica.com] from July.

    The company would like the FCC to embrace four additional conditions as part of the auction rules: open applications, open devices, open services, and open networks. Should the FCC agree to do so, Schmidt says that Google will jump in on the bidding at the FCC's $4.6 billion reserve price.
  • "In addition, any single bidder wishing to purchase the entirety of the spectrum must front a minimum of $10 billion. 'According to the FCC, nearly all of that C block aggregate reserve price will go toward a package of U.S. national licenses."

    What is a 'package of U.S. national licenses?' Does anyone know where the money from this auction goes?

    • Re: (Score:2)

      by hurfy ( 735314 )
      hehe, my exact question and no answer below yet :(
    • The "package of national licenses" refers to one of the frequency blocks being sold - it's broken up into about 8 regional licenses, but it will be possible to bid on all 8 as a "package" if you want to get a nationwide footprint (i.e. the same spectrum everywhere in the US.

      The money goes the the US Treasury, and has to be paid by June 30th, 2008, because it's already been included in the budget by the Congress. In other words, it's already been spent.

  • Backwards (Score:4, Insightful)

    by WPIDalamar ( 122110 ) on Tuesday August 21, 2007 @02:15PM (#20307977) Homepage
    If they can't get 4.6B for the spectrum, they'll remove the two open access restrictions? WTF?

    It should be the other way around... if they can't get 4.6B for the spectrum, then they'll ADD the two open-access restrictions that they didn't include. Then at least, they know Google would bid 4.6B and maximize their profits while also having a more open network.
    • Or Google can pay 4.6B and add the other two restrictions themselves? They should remove them as they said they would, otherwise they just tailors the spectrum so it could sell it to Google and I... I do not want to live a country that does that.

      • Re: (Score:2)

        by pla ( 258480 )
        otherwise they just tailors the spectrum so it could sell it to Google and I... I do not want to live a country that does that.

        I think a lot of people have missed the meaning of the restrictions Google requested...

        The restrictions apply to the buyer. They force whoever wins this block of spectrum to "play well with others", more or less.

        Personally, I think the FCC should just open the spectrum as with the 2.4GHz, perhaps with just a few more minor restrictions on (such as limiting it to ultra-low po

        • Re:Backwards (Score:5, Insightful)

          by Tacvek ( 948259 ) on Tuesday August 21, 2007 @04:17PM (#20309905) Journal
          If goggle buys this, I can be almost certain that it will be used to create a nationwide Wireless network, probably a "broadband" network.
          The problem with the current systems are that only the existing cell companies can get into the business. There is no real way for a competitor to enter the market. Further, in general only approved devices can be used on the network (although the GSM networks are the exception). The companies can dictate what the network can be used for. As a result, Cellular internet prices are outrageous, and unfair.

          So what Google would do is but the spectrum. They would standardize on a protocol. They would let companies provide services (most likely internet services) on that band. The companies offering services on that band would be required to let any devices that support the protocol to be used (likely a SIM-card like system would be used). The companies could not restrict the applications or services used on the network. Smaller companies would have a much better chance to get in on the action, as the major requirements would be an antenna on a cell tower, and a large internet connection. They would only need to provide the end users with a SIM, as the modems could be gotten anywhere. The total overhead of providing 700 MHz internet access would be far less than the traditional cell system, and thus there would be significant competition, and low prices.

          The key here is that the spectrum owner has no interest in providing the service themselves, and has no reason to sell out to the large companies. So they would have no problem allowing multiple companies to provide the service in the same area. That is not heard of for most utilities. Also, unlike cell phones, the companies competing in the local area would not conspire to fix prices, as the cost of entrance would be low enough that a new player could easily join in.

          If I am correct about that, that would be the sort of thing the government should do. That sort of regulation would level the playing field, and thus allow capitalism to work well both for businesses and for consumers. That would be the sort of regulation that is ideal. Unfortunately all too often, government regulation works to make the playing field less even, in the favor of the entrenched large companies that are already working in that sector.

      • Re: (Score:3, Interesting)

        by WPIDalamar ( 122110 )
        Problem is, it's sold in chunks. So an incumbent wireless provider can buy a single region and completely prevent any other player from having a national wireless network.
    • You misunderstand the value of open-access to telcos: it reduces the value of the bid. Removing the open access restrictions adds value for the telcos that didn't bid, and therefore makes it more likely that the FCC gets its minimum value. This is done so that if Google decides to renege on its promise (this was, after all, only a PR declaration), the FCC isn't left without an option to get at least some money.

    • Re: (Score:2, Interesting)

      by ohmypolarbear ( 774072 )

      If they can't get 4.6B for the spectrum, they'll remove the two open access restrictions? WTF?

      I agree, WTF - but not for the same reason:

      It should be the other way around... if they can't get 4.6B for the spectrum, then they'll ADD the two open-access restrictions that they didn't include. Then at least, they know Google would bid 4.6B and maximize their profits while also having a more open network.

      I think the bigger problem is the money vs. principles problem on display. With only two of the four rest

  • FCC Puts 4.6 Billion Minimum Bid on Spectrum Auction?

    I'll take two of them!
  • "The auction will be expensive, last year's auction for a much-less-attractive slice of spectrum netted the US Treasury $13.9 billion" - http://arstechnica.com/news.ars/post/20070720-goo g le-announces-intent-to-bid-on-700mhz-spectrum-auct ion-if.html [arstechnica.com]

    This spectrum will probably go for 20 - 30 billion. How much cash does Google have?
    • "How much cash does Google have?"

      The question is, how much liquidity does Google have, and how does it help their bottom line.

      All by itself, I don't see how it helps Google, but it would be nice to have that spectrum opened up to all devices so that we can finally have decent coverage without draconian device restrictions. Just a complete guess is that Google wants to "sublet" the space to smaller device makers.

      • Other way around. (Score:3, Insightful)

        by chaboud ( 231590 )
        I don't think Google needs to own this space. As long as it goes for more than the reserve, Google is flying high on whoever buys this space.

        Google's requirements just made sure that Google can step into the game in this juicy section of spectrum even when they don't win the bidding (I don't think that they're going to try very hard).

        Either way, I highly doubt that we'll see a completely free wireless mesh that only costs the initial investment of the device crop up any time soon. Your tax dollars hard at
    • None of the mobile phone service providers have enough cash reserves to even meet the minimum bid; only Google does. I suspect they aren't expecting to be paid in cash, or if so, not in one lump sum.

  • Jeez (Score:3, Funny)

    by jhines ( 82154 ) <john@jhines.org> on Tuesday August 21, 2007 @03:29PM (#20309125) Homepage
    And all I wanted was a Hz or two. Dang it all.
  • Seems to me the best way to get Microsoft interested in this bid is for Google to go public about their interest. My guess is Google doesn't even want it but wants to see M$ pony up some big $$$, influence the price and help set some conditions.

    I mean get real, if Google really did want the spectrum, it would seem to be a big mistake to telegraph their interest the way they have, especially knowing that M$ has a big interest in anything that would hamstring Google...

    • Re: (Score:2)

      by Renraku ( 518261 )
      Maybe they have no legitimate interest. They see Microsoft's overall lack of success in side markets.

      If MS dropped $30 billion for this as a knee-jerk reaction to keep it away from Google, well...they might get a third of that, total, back in revenue. That's after a few more billion to develop uses for it.

  • Ehh (Score:2)

    by bberens ( 965711 )
    They should sell it for like $1 million + 10% revenue share. $6 Billion is chump change for the value this bandwidth will create.
    • No, that's what federal telecom fees are for. That way they can sell it for $4.6B, and still get 10% revenue. Oh, and another 40% of any profit you can't find a way to hide.

  • "This is essentially a move to shut out smaller possible competitors"
    Do you think that if they had set it to much lower no one would have gone that high? Or do you think that they should place a maximum? I'd like to see how that pans out, $1 million dollar maximum, $100 minimum. That should cover every small company out there. Let's see how the bidding will go.
  • How does a huge minimum bid and minimum segment size promote anything but... well, government coffers and big business dominions? This makes sense from neither a conservative or liberal standpoint.

    I could see capping the amount a single entity could take, thus encouraging competition and opening it up to smaller players, and then the smaller players could either take it and run, consolidate amongst each other, or dangle it in front of the bigger players.

    Or I could see no limits at all and let them go for th

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