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Wireless Networking Hardware

FCC Ends 700 MHz Auction 118

Posted by CmdrTaco
from the they-aren't-making-any-more dept.
Apu writes "Having received bids totaling $19.5 billion over 260 rounds of bidding, the FCC has announced the closing of Auction 73. The Chairman's statement notes that the auction has "raised more money than any [FCC] auction has ever raised" besting the 2006 Advanced Wireless Service-1 auction that raised $13.9 billion and topping the $10.6 billion Congress estimated it would receive for the 700 MHz spectrum. The New York Times reports that "the last bid in the auction was $91,000 for frequencies around Vieques, Puerto Rico." According to the FCC, "eight unsold licenses [...] remain held by the FCC and will again be made available [...] in a future auction." This includes the "D block" which was to be shared by commercial and public safety users and only received a single $472 million bid, below the $1.3 billion reserve price. However, as previously reported, the open access provisions will apply to one-third of the auctioned spectrum as the minimum $4.6 billion bid for the "C" block was received. The names of the winning bidders have not yet been made public."
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FCC Ends 700 MHz Auction

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  • by Anonymous Coward on Wednesday March 19, 2008 @08:03AM (#22794314)
    Is that in 2008 dollars? You people realize that every time some revenue or stock price goes up in the US, while the dollar drops at the same time, the businesses are really just treading water while the people pay for the country's debt with the value reduction of their assets?
  • Re:Just as well (Score:3, Insightful)

    by Albanach (527650) on Wednesday March 19, 2008 @08:18AM (#22794414) Homepage
    Is it irrelevant? That $19 billions is going to come out of our pockets over several years and yet will be spent in 7 weeks.

    The 3G auctions in Europe raised a fortune for exchequers but the huge burden the placed on operators has crippled 3G roll-out for the best part of a decade.

    Is it wrong to question how the money raised is spent?
  • by Bombula (670389) on Wednesday March 19, 2008 @08:37AM (#22794598)
    Maybe. But the joy of pottery is still around, even though people haven't made their own crockery in Western societies for centuries.
  • by vertinox (846076) on Wednesday March 19, 2008 @08:53AM (#22794772)
    With those states (ie, the Dakotas), there aren't enough people to justify the cost. With a nationwide network, that cost is absorbed by the profits in the 10 major population states.

    What incentive would a nationwide private owner of a spectrum have to provide service to the Dakotan's when they can focus on the East and West Coasts? This is what happens to many rural communities when you have major companies like Verizon or Comcast with land line service so the same thing would most likley apply to wireless.

    Unless you dictate that the owner of this spectrum must provide service to all 50 states (including Alaska) then its not going to happen because its just not profitable.

    In all reality, if South or North Dakota had control over their own wireless then a smaller then you could see municipality ISPs for those far off places or at least small start up companies would take the risk in providing wireless broad band to sparsely populated areas.
  • by j79zlr (930600) on Wednesday March 19, 2008 @08:59AM (#22794836) Homepage
    Inflation is good because of the irresponsible actions of many that get them into debt? I research a $200 purchase to make sure that I am getting what I want yet these people can't do some research when they are making a purchase as large as a home? I am so damn sick of hearing about these poor ignorant people who were swindled. That is not the case 99% of the time, they got greedy and tried to buy more house than they could afford. Sorry but I don't see how it is my responsibility to pay for the irresponsibility of others. Where is my government check for all of the money I've lost in the market because of this mess???
  • All that means... (Score:2, Insightful)

    by Sigmon (323109) on Wednesday March 19, 2008 @09:00AM (#22794838) Homepage
    ...is that the Federal Government just instituted another tax (a $19 Billion tax) - that I must pay - in order to use the supposed 'public' airways. Used for some telecomm service - there'll be an additional tax on top of that. ....And we wonder why our wireless phone bills are so high.
  • by Marvin01 (909379) on Wednesday March 19, 2008 @09:04AM (#22794884)
    Since I can buy a microcontroller for $4US that has better specs than my original desktop computer, I hardly think that home electronic projects will go away any time soon, or indeed at all. They just might be different, just like everything else related to technology.
  • by R2.0 (532027) on Wednesday March 19, 2008 @09:24AM (#22795130)
    While I won't say that the Fed and the SEC have handled this whole situation well, I don't see this particular situation as having ANY good outcome. A run had actually started on Bear Stearns, and it was going to collapse totally within a couple of days. So their creditors would need to write off those debts. And since those debts are often held as collateral by other organizations, that puts them at risk too.

    And before going all populist with the "Good - serves them right" bit, remember that as it spreads, it starts affecting institutions closer to home - pension funds, mutual funds (got a 401k?), local depositor banks, etc. And the Federal Gov't has a legal obligation to bail some of them out.

    It's all ugly, but gone are the days of the proletariat vs. the capitalists - if you have a 401k, own any stock, have deposits in a bank, have a pension, you ARE a capitalist.
  • Re:Just as well (Score:3, Insightful)

    by Imsdal (930595) on Wednesday March 19, 2008 @09:25AM (#22795148)

    The 3G auctions in Europe raised a fortune for exchequers but the huge burden the placed on operators has crippled 3G roll-out for the best part of a decade.

    How do you figure? Are you suggesting that 3G roll-out has been quicker in other countries where the governemnt gave away valuable rights to private companies for free instead of selling them?

    Whatever an operator payed for a license is sunk cost [wikipedia.org]. The subsequent roll-out will be at whatever pace is economically feasible and will not be affected by the amount payed for the license.

  • by Anonymous Coward on Wednesday March 19, 2008 @09:34AM (#22795248)
    I research a $200 purchase to make sure that I am getting what I want yet these people can't do some research when they are making a purchase as large as a home? ... Where is my government check for all of the money I've lost in the market because of this mess???

    So you research all of you $200 purchases but you don't bother to do any research before buying stocks? I'm sorry, but blaming the economy for your poor choices in investments is just as irresponsible as the home buyers you are complaining about. If you had picked good investments then they would be going up no matter the condition of the rest of the market.
  • by lutz7755 (1046792) on Wednesday March 19, 2008 @09:45AM (#22795370)

    Am I the only one that has a fundamental problem with the fact that the FCC is even allowed to do this? Admittedly, I don't understand the ins and outs of the entire spectrum business, but how does a federal agency have the right to charge anyone anything for use of the airwaves? The cost of this is going to go right back to the users of the spectrum, not the company. And what does the FCC do with the 19 Billion dollars they raised?

    I have a hard time believing that US citizens come out better for this, in any way shape or form. And isn't that what the government is supposed to be all about? Provide a service to the people?
  • Hypocrisy (Score:3, Insightful)

    by TheLink (130905) on Wednesday March 19, 2008 @10:14AM (#22795756) Journal
    I've heard a lot of economists and "experts" (and the IMF - who are neither ;) ) say a very different thing during the Asian financial crisis in 1997. Especially the western ones.

    They were saying "no bailouts".

    I figure they wanted stuff to go bust so they could buy it all up cheap and thus gain more power and wealth.

    Hypocracy - the rule or power through hypocrisy.
  • by amliebsch (724858) on Wednesday March 19, 2008 @10:31AM (#22795956) Journal
    The first premise, if you accept it, is that some mechanism must exist to allocate ownership rights over different parts of the spectrum covering different locations, because otherwise a tragedy of the commons occurs, where having greater than one users of a frequency results in uselessness of the frequency through "pollution."

    Having established that ownership rights need to be allocated, the question becomes how to allocate them. Economically, the most sensible solution is an auction of this type, for the reason that the auction winners will be the enterprises who are able to pay the most, under the principle that the reason they are able to pay the most because their goods and/or services provide or are likely to provide the greatest value to the market, and ultimately, society. Thus, you end up with the most economically efficient allocation of the spectrum.

    Other alternatives for allocation also have problems. A lottery could easily result in relatively useless owners possessing the rights while those with a product much more highly valued by the public are denied. A political determination would result in the usual pork-barelling and outright corruption.

  • Re:Just as well (Score:4, Insightful)

    by Albanach (527650) on Wednesday March 19, 2008 @10:33AM (#22795982) Homepage
    If the funding for a Sunk Cost comes from borrowing then of course it affects future business decisions. European networks paid $129 billion for 3G licenses. Vodafone alone spent more than $30 billion. It seems unlikely that sort of money came from cash surpluses.

    In Japan, 3G licenses were free. Looking at the state of the mobile market there, and comparing it with that in Europe, then yes, I'd say that huge cost delayed roll out and by increasing user costs slowed uptake.

  • Re:Just as well (Score:3, Insightful)

    by Imsdal (930595) on Wednesday March 19, 2008 @10:49AM (#22796180)

    If the funding for a Sunk Cost comes from borrowing then of course it affects future business decisions.

    Sorry, but no. Whatever investments a company chooses to make in 3G roll-out is only based on what they can expect each investment to return. Are you suggesting that an investment with an expected ROI of x% will be made if the debt is below $y, but will not be made if it is above $y?

    Also, why compare to Japan? Compare to Sweden, where the Social Democrats gave the licenses away. It turned out that making massive investments in infrastructure in areas where only few people lived did not make any economic sense even when the operators had not paid for the licenses. Strange that, huh?

    The mobile market in Japan is much more mature, hence all the "texting like a Japanese teenager" references here and elsewhere.

  • by smooth wombat (796938) on Wednesday March 19, 2008 @11:41AM (#22796878) Homepage Journal
    have said that the risk to the market of a failing major investment bank is worse than the risk of moral hazard, in this case.


    Yes, I too have heard the same tripe sounded about why Bear Stearns could not fail and why they had to be bailed out (even if they are being bought out). The problem is, as we have now seen, someone would have stepped in to buy them and their assets anyway, so the government shoveling more money down the drain wouldn't have mattered.

    Yes, there would have been some consternation in the markets as the apoplectic seizures hit the street but that is what the free market is all about. Bear Stearns, and others, thought it was great when they were leveraging their holdings ten, twenty or even thirty times over. It was all parties and bonuses so long as their excessive risk paid off.

    However, when the dangers of their risk became real, rather than do the right thing and unwind their positions, even at a loss, they held onto their leveraged positions, hoping upon hope that the next trade would work out (sound familiar?).

    Bear tried to beat the market and ignored sound investment principles. They played with fire and they got burned. That's life. It does not matter that those who have/had their investments with Bear have money to burn (compared to the rest of us); this is not a schadenfreude moment. This is about not gaming system for the benefit of a few.

    Sure, those who hold Bears stock got hammered, but so have millions of others who held stock in now defunct companies. Where are the tears for them? How about the employees of Enron who lost, in some cases, their entire retirement savings when Lay and others manipulated markets and cooked the books. Don't they deserve to be bailed out?

    Either we are going to let the markets operate as they should, which means accepting wild gyrations up AND down, and only have intervention as an absolute last resort, or we abandon free market principles entirely and admit that the government will manipulate market conditions as best it can to promote upward swings while lessening or preventing downward falls. This notion that somehow there needs to be an orderly market is a fallacy. Markets, true markets, are not orderly. They are run on fact and rumor. The irrational investor and all that.

    I couldn't believe it when I heard it, but of all the hacks out there pontificating on this bail out, Larry Kudlow actually said on live tv that the bail out of Bear Stearns was not right. Of course he then went on to say how the Fed needs to do more, but that's another subject. He also said that as of late, the Fed has injected $850 million into the markets, trying to make adjustments. Nearly a trillion taxpayer dollars, in the form of future debt payments, have been poured into the markets to prop up those who took on too much risk and as a direct result, any attempt at saving by the average American has been crushed.

    In short, the Fed is doing everything in its power to see to it that saving is not an option. After all, if you're not earning enough interest on your accounts to beat inflation, why save it? Just spend, spend, spend. Forget about debt, it doesn't matter. Buy those Chinese made goods. Don't save for a rainy day. Exactly the same mindset that got us into this mess.

    The markets need to do what the markets will do. This nanny-state interfering is only serving to prolong this recession and making things worse.

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