Google Plans to Bid 4.6 Billion on 700MHz Band 148
NickCatal writes "The Wall Street Journal is reporting that Google plans to bid $4.6 Billion on the 700 MHz radio spectrum being auctioned off by the FCC. What is most interesting is that they are not planning on partnering with other companies to raise the cash, they are going to spend their own cash and possibly borrow some. With partners such as Sprint Nextel and T-Mobile in their 'Open Handset Alliance' is this a sign that they are willing to directly compete with the people they courted to join?"
Shocking!!! (Score:2, Insightful)
Re:Shocking!!! (Score:5, Funny)
Because if you bid $4,600,000,000.01 you get the license and not Google.
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Most regional license for few a few million. We are talking 4.6 billion here.
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f me thats a lot of money (Score:2, Funny)
Re:f me thats a lot of money (Score:5, Funny)
I think Sergey is going to sell 100 shares.
Re:f me thats a lot of money (Score:5, Informative)
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Correction (Score:2)
Re:f me thats a lot of money (Score:5, Informative)
With a market capitalization of nearly $200B, no debt, and a 22% return on equity, Google should have absolutely no problem raising cash if necessary. I suspect they will tap into their cash reserves rather than debt financing or raising capital by diluting existing shareholder equity.
The numbers are here:
http://finance.yahoo.com/q/ks?s=GOOG [yahoo.com]
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I imagine that RF spectrum is an asset that they could liquidate very easily if needed. It's not going to get any less valuable while they're holding onto it, and as long as they don't overpay, it very well may appreciate in value.
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Re:f me thats a lot of money (Score:5, Insightful)
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Re:f me thats a lot of money (Score:5, Insightful)
The FCC isn't going to do that. Now their primary function is to steal the radio spectrum from the people and auction it off to the highest bidder.
I'm beginning to think there is no point following FCC rules. If the government is going to be greedy thieving bastards with our radio spectrum, why not just become freebanders? WTF? I thought the FCC was supposed to regulate the airwaves for everyone's benefit? If they just take them away to sell them, then they are just another scheme by the corrupt goverment to separate the citizens from their rightful use of public commons and get money out of it.
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They could always decide not to (Score:2)
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How about developing communication protocols for use on certain bands. Such as a wireless networking standard. One which gives greater bandwidth and further range, instead of networking being put on the area no one wants--the 2.4GHz band shared with microwave ovens. In fact, I thought they were going to do this when they eliminated some tv channels. Then I hear this story.
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Re:f me thats a lot of money (Score:4, Informative)
The FCC shot down two of the four suggestions, but the network transparency provisions stayed in. I'm holding off on buying a new phone for a while because if I can get a device (from any carrier) on this frequency I know I'm not locked in by the technology according to the conditions of sale.
Verizon and Sprint are fighting this condition in a lawsuit against the FCC.
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maybe compete, but I don't see google (Score:5, Insightful)
Most likely it'll involve them leasing out the band to other users to prevent a monopoly. Maybe giving a discount to users of Google's cell phone tech and/or adding special features that (by owning the band) it can ensure will be available anywhere there is a tower that handles the band.
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Some carriers have privately expressed skepticism about Google's ambitions, saying it is vastly underestimating the challenges of operating a network, providing customer service and gaining traction as a new entrant in a crowded wireless market.
Forget Google! The existing carriers continue to underestimate the challenges of operating a network. I have friends spread out across many carriers where I live (Sprint, Verizon, Deathstar), and I've gotta say, the customer service still sucks mig
why? (Score:2, Interesting)
Re:why? (Score:4, Insightful)
There'll be many "rounds" of bidding. The initial bid is just to see who's interested. After that, the stakes will rise with each interested party desperately trying to squeeze more finance out of their partners/banks/owners to raise their bid.
At some point one will either not be able to raise any more ca$h and quit the bidding rounds, while the other go on. Some will realise that at the price they will have to pay, their business model breaks and they won;t make any profit.
Eventually someone will "win", but this will be a phyrric victory as the amount of money they will have to pay for a licence will be so high that they'll either go bankrupt, have to join up with some other bidders (who pulled out earlier) or not have enough monkey left to actually build the systems they wanted to implement.
Comment removed (Score:5, Insightful)
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Plus, if Verizon thinks it can out-bid Google and do something with the spectrum that its customers will be willing to pay more than $4.6B for, that's a good thing. If they turn out to be wrong and somebody else can, than Verizon's best bet is to sell the spectrum to that other company.
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Watch out, though -- you can't use the fact that they all price the same, since that would also happen in a market without price maintenance. This is true even when prices go up -- it appears that people do not buy mobile phone service because of SMS message pricing. (BTW... I can buy unlimited messages for about an additional $10/month.)
T
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And, now, that's going to be really difficult since Verizon is paying the price of locking out new competition, but AT&T, Sprint, T-Mobile, SunComm & the rest all receive the benefits
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That doesn't make sense. If it were a truly free market, there would be no government regulation.
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It is the responsibility of government to approximate these conditions as accurately as possible.
Tax offset? (Score:2)
How does it offset your taxes? When the government gets more money, they don't reduce taxes, they find new ways to waste it--or politicians find new ways to secretly line their pockets. What planet have you been living on?
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I propose a better alternative: just give it away in a lottery, but let the lottery winner sell the spectrum to whoever they want. The net effect would be about the same (unless you end up with some kooky winner who's unwilling to accept $4.6 billion), but the lottery winner would get the revenue, not the gov't.
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You are correct. I propose they start by auctioning off your body parts. ;-)
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Yeah, I hate it when I go to build something and realise that I've run out of monkey.
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Re:why? (Score:5, Informative)
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Not an Act of War (Score:5, Insightful)
The band that a company owns seems to be a completely different business investment.
Case in point, when a company 'joins' the World Wide Web Consortium [w3.org], it isn't considered unfriendly for them to go buy another T1 line for their company or even purchase software from a company who doesn't support W3C.
And the reason I hesitate to use the word 'joins' is that when a standard is truly open, you don't have to join to use it. Hell, you really shouldn't even be forced to use it forever. It's open. It's out there for anybody to use or to stop using. That's what attracts me to open standards. I haven't paid IBM or signed an agreement with Microsoft whereby if a new technology arises I have to wait for the agreement to wear off.
You shouldn't have to 'buy in' to the Open Handset Alliance and I think you're thinking of it in the wrong way when you imply that it's detrimental by not going in with other members on this auction from the FCC.
If they did a good job making the standards and you don't have to commit to it, other companies will want to use it. They aren't going to care if Google is still trying to make a profit in other realms. Just because Google made an open standard for everyone to use doesn't mean they now need to sit back on their heels and be ultra careful not to upset anyone--and the other companies know this. Hell, everyone needs to make a profit.
Not so much competing against (Score:3, Insightful)
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My bet (Score:3, Interesting)
More likely.... (Score:3, Interesting)
But if a telco chooses to "play nice" and open their network to the OCA based, presumably uber-cool handset and applications, folks may just stay with an existing provider and then both Google and the Wireless provider both get to make buckets of $$$.
$ for citizens (Score:5, Insightful)
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I want to see all this money, plus *all* of the money from the sale of the television spectrum following the HD deadline, to come back to us as a fat check to pay for one day in Iraq.
It's part of the government (Score:4, Informative)
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Iraq, I would guess.
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The FCC is indeed a federal agency, and that money will go back to the federal budget after FCC buys everything they need. My friend worked at the FCC and he said they had VERY nice hardware. And since they donate x BILLION USD back to the federal budget OMB isn't watching every nickel & dime.
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Funny, I keep seeing claims like this, but I don't recall ever taking part in any election in which I was allowed to vote on such a thing. And the FCC has certainly never asked me personally to give them permission to govern my part of the spectrum.
In fact, when I look at the history, I find that the FCC was created and handed control of the spectrum before I was born. I obviously didn't "choose" to let this happen, since I didn'
stop the spectrum tax on the airways (Score:5, Interesting)
No wonder providers lock out third party handsets. They just paid billions for the spectrum, they have every incentive to maximize profits.
What would be most beneficial to the consumer is perhaps a company that just sold mobile IP addresses and had nothing to do with selling devices. Let consumers choose their own devices in a competitive market for the bandwidth they purchase. Maybe the FCC should stop thinking about billions of short term dollars and start thinking about what's best for consumers and the industry as a whole.
Why, yes, that might work (Score:2)
A business setup not for the sake of the shareholders but for the benefit of the people. Controlled by the state to see that it encourages innovation and equality.
Why you could even use the profits to fund goverment, call it a state run industry.
You communist, and no pointing out that the original US postal system worked like this and that this is what allowed the US goverment to have low taxes since it had other sources of income.
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As I said, there is no incentive to change this today. This is why you can't get Nokia handsets from Verizon - their testing shows they don't work very well with the system Verizon is using.
Would it be nicer in a techy-geeky sort of way if
Competition Alliance (Score:2)
And Google has been planning to spend $billions on the 700MHz band to compete with them all for years.
This story isn't stupid, but the question it asks to frame it is so stupid I'm surprised I didn't see it on TV news.
The Hot FM. (Score:2, Funny)
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reading voice mail (Score:3, Funny)
Battle plans...? (Score:2)
Business stopped being that simple, oh...like maybe 1 or 2 thousand years ago.
Does the phrase 'embrace and extend*' ring a tiny bell?
No? Try looking at it this way. MS constantly wages FUD. Always - frequently with whatever legal club happens to be within easy reach. Google, on the other hand does things in a rather novel manner (TIC) via the use of something called 'logic'. It's a more mature strategy (
Mr. Cringely has been saying this for a while... (Score:2)
A free, ad-supported Google cell service with GPhones would be pretty cool for you guys over there, I guess. Some people might be a bit wary of Google's dominance, but I suppose they'll still be blinded by Google's "Do No Evil" to think about how much Google already know/control. From my point of view, I'd just like people to be aware of how powerful they are - I've not made my mind up
Ticking time bomb for the old media (Score:5, Insightful)
Google has proven that the monopoly of distribution can be broken by their network, and their applications. AdSense replaces expensive marketing and advertising departments, Blogger.com replaces the need for physical media and the costs associated. Google Search replaces direct advertising campaigns, and YouTube is trumping the cable networks in giving people a la carte entertainment at a moment's notice. I have high hopes that Google's foray into the wireless market will offer huge gains for those of us who are sick and tired of the old media cell phone technology (locked phones, expensive monthly charges, limited application support, etc).
As WiFi exploded in use, I continued to be amazed at how relatively unregulated bandwidth worked so well in all the market locales I had WiFi implemented in. Yes, I've heard horror stories by relatively few, but in my office in downtown Chicago, our WiFi network worked seamlessly with dozens of others in the same building. Up to now, I still can't find verifiable proof that other wireless bandwidth segments can't be shared by dozens, or hundreds, of providers in the same vicinity. With the advent of software radios (frequency hopping, output power changes, etc), it seems that the first person to relinquish full control of their bandwidth nation-wide will really hurt the old media strangehold in the wireless market.
My biggest fear for wireless is the push for more laws to regulate "network neutrality," which I am against vehemently. I believe that paying for access tiers makes more sense than forcing the market to all stay at a certain level of service for everyone at a flat price. It doesn't make sense to me (neither as a businessman, nor as an individual). I'm hoping to see Google offer the bandwidth in markets they can't reach in a relatively unregulated and openly competitive atmosphere. In an adjoining town to mine, Libertyville, Illinois, there are numerous WiFi Internet providers who are doing gangbusters sticking access points on leased towers and giving people in the region what they want (including even free WiFi at a throttled speed) at the price they're willing to pay. The old media companies (AT&T, Comcast, etc) have fought tooth and nail to shut down these hooligans, but the city has held its ground in allowing them to compete. My own town won't allow this to happen (although we do have a bunch of WiFi sharing groups on within 2 blocks of me), so I'd love to see a national push by a major new media company to open bandwidth for all to play with to see what the market can provide with reduced FCC rules created by the old monopolists.
My big concern is the names Sprint and T-Mobile associated with the post. I use T-Mobile for 60% of my wireless communication (mostly EDGE and voice), and AT&T for the remainder (3G), and while I'm happy, I also use unlocked foreign phones and hardware devices. My friends who use the locally provided versions of the same devices are really unhappy, and don't have anywhere near the amount of customization and freedom that I get by providing my own (expensive) devices.
I do see a big WMD for the old media ahead, ready to explode. It's called competition, and it will come from all levels: locally, nationally, internationally. I've spent more time on YouTube in the past 2 weeks than watching TV in the past 6 months. I'm prepared with my wallet to pay in advance for broadcasts I like (such as Sanctuary, which I feel isn't there yet), and I can't wait to see what foreigners with a great grasp of English start producing with the technology available. Combine that with a relatively cheap and open range of bandwidth frequencies, and the radio/tv/cell monopolists are dead.
I can't wait. Who do I write a check to at Google?
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My biggest fear for wireless is the push for more laws to regulate "network neutrality," which I am against vehemently. I believe that paying for access tiers makes more sense than forcing the market to all stay at a certain level of service for everyone at a flat price. It doesn't make sense to me (neither as a businessman, nor as an individual). I'm hoping to see Google offer the bandwidth in markets they can't reach in a relatively unregulated and openly competitive atmosphere. In an adjoining town to mine, Libertyville, Illinois, there are numerous WiFi Internet providers who are doing gangbusters sticking access points on leased towers and giving people in the region what they want (including even free WiFi at a throttled speed) at the price they're willing to pay. The old media companies (AT&T, Comcast, etc) have fought tooth and nail to shut down these hooligans, but the city has held its ground in allowing them to compete. My own town won't allow this to happen (although we do have a bunch of WiFi sharing groups on within 2 blocks of me), so I'd love to see a national push by a major new media company to open bandwidth for all to play with to see what the market can provide with reduced FCC rules created by the old monopolists.
You do not understand what network neutrality is. The issue is not whether providers can offer can offer different tiers of service for different prices. Of course they can -- they do it now and will continue to do so in the future. The question of network neutrality is whether, after you pay for a certain level of service, the ISP can vary your service based on the destination or content of a given packet. The canonical example is internet service provided by a telco choosing to block or cripple VOIP
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You do not know what network neutrality is. Neither does whoever moderated you insightful. What you described is not network neutrality, it is anti-neutrality FUD.
Network neutrality is saying that it's not fair to hold website operators hostage to give prefered "access" to the ISPs customers. The website operator
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If you're a carrier, you should have the ability to sell me a bigger chunk of your bandwidth. You should not have the right to control the content that is transmitted over the share you sell me.
Imagine a pizza-delivery company who pays the phone company to drop
Hey, Who Announces Ahead of Time... (Score:2)
I'd like to see Google win this. They are the only hope for some serious competition in this consolidating business of access to the InfoBahn (remember that term that once ca
beam ads directly to brain (Score:3, Funny)
OPEN Spectrum, OPEN (Score:2)
Besides, Google isn't evil. It's part of their corporate charter, so if Google is ever evil, you could sue their officers for malfeasance.
Good luck defining "evil".
Hopeless underpaid. (Score:2)
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The interesting thing is (Score:2)
gratis spectrum for communities (Score:2)
A sucker punch to Microsoft... (Score:2)
- Google telegraphs their upcoming $4.5B bid repeatedly over the internet.
- Microsoft thinks "whoa, these guys are our biggest competitor and if they get away with it we could be in really big trouble." They then decide to enter a surprise snipe bid of $5B (and probably have more cash reserves than Google, or at least more experience at coming up with it as needed-- Google's may be mostly in stock and take some doing to turn into a check that they can give to the FCC)...
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The german mobile auction in 2000 raised over $50Bn (at today's exchange rate). The UK auction in 2001 raised £22.5Bn ($45Bn at todays rate)
These auctions are more profitable than wars - well, for the governments involved. Not for the poor suckers who "win" them and then have to find the cash
references:
http://news.independent.co.uk/business/news/article272264.ece [independent.co.uk]> http://www.nao.org.uk/publications/nao_reports/01-02/ [nao.org.uk]
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Vodaphone admitted they overpaid in the UK auction.
What have they gained from their buy? Shit all really.
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MVNO = Mobile Virtual Network Operator
"bi doin" = be doing (I think?)
OK, let's try that, and a few more fixes:
Well, it still doesn't make sense.
Let me rephrase entirely:
Google intends to lease the
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I'm reading your post and above it there is another post with a link to goat.se and you were the one that got modded troll. Note to the moderator, it's against the guidelines to mod people troll just because you don't agree with them.