US Wireless Spectrum Auction Raises $44.9 Billion 91
An anonymous reader writes: The FCC's recent wireless spectrum auction closed on Thursday, and the agency has raked in far more money than anyone expected. Sales totaled $44.89 billion, demonstrating that demand for wireless spectrum is higher than ever. The winners have not yet been disclosed, but the FCC will soon make all bidding activity public. "The money will be used to fund FirstNet, the government agency tasked with creating the nation's first interoperable broadband network for first responders, to finance technological upgrades to our 911 emergency systems, and to contribute over $20 billion to deficit reduction. In addition, the auction brought 65 Megahertz of spectrum to market to fuel our nation's mobile broadband networks. The wireless industry estimates that for every 10 Megahertz of spectrum licensed for wireless broadband, 7,000 American jobs are created and U.S. gross domestic product increases by $1.7 billion."
Just curious who decides.. (Score:3)
Who decides where the proceeds go for public airwave auctions? I would have thought it would go to the treasury to contribute paying all the bills of the government, not just an isolated project?
Why Sell, they should Rent (Score:5, Insightful)
As spectrum is a finite resource, why sell it, instead of rent it? It goes up in value each year, so the stuff we sold years ago is now worth MUCH more than we sold it for.
And, since the frequencies are owned by the general public, why the transfer to private corporations, who then hide income offshore? Heck, if the feds put up cell towers and little buildings to house the radios, they could easily earn enough money to fund the government's basic needs for MANY years to come.
Re: Why Sell, they should Rent (Score:2)
Now that is an interesting idea. Create a marketplace for leasing spectrum to commercial market on bandwidth range,duration and Locality.
Far better than mass block allocation in perpituaty.
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why sell it, instead of rent it?
Same reason people don't renovate leased buildings. Why invest in something when it isn't yours. I certainly would be thinking twice about providing 100% coverage anywhere if there was a risk that in a few years time my investment would be for nothing. The only solution then is really long term leases, but at that point what is the difference between the lease and the sale?
Why not distribute this as a basic income to all? (Score:2)
Just like Alaska does with its "Permanent fund"?
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Because the Alaska Permanent Fund [wikipedia.org] takes a small amount of revenue from the oil recovery fees and puts it in a managed fund whose interest is dispersed to the couple of hundred thousand humans left in this mosquito infested swamp. It has a total capitalization of about 45 billion dollars, roughly the same as the spectrum sales.
However, Alaska's population is roughly 735,000, the US 316,000,000. Assuming the same long term returns, the average US citizen would get about $1.80 per year. On a good year.
Disbu
US$560 for a family of four is significant (Score:2)
There is another way to look at it. Using your figures, the total amount per US person is about US$142. That is for a ten year lease of the spectrum if I recall correctly, so we can expect a similar amount again in another decade. So, that is about US$14 per person per year during that time (well, a little more, with interest as the money if the money is received up front). For a family of four, that is about US$56 per family per year ignoring interest. That could be a month or two of cell phone service on
Re:Just curious who decides.. (Score:5, Informative)
Broadly, it is general revenue to the treasury. In this case, a chunk of it was allocated ahead of time. Congress passed (and the President signed) the "Middle Class Tax Relief and Job Creation Act of 2012." That legislation instructed the FCC to find spectrum in this set of bands to auction off, and allocated a portion of the proceeds to (a) defray the cost of moving the existing users of the spectrum and (b) building a public safety wireless network.
So, the FCC, while it conducts the auction, does so at the request of, and on the behalf of, Congress.
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Broadly, it is general revenue to the treasury. In this case, a chunk of it was allocated ahead of time. Congress passed (and the President signed) the "Middle Class Tax Relief and Job Creation Act of 2012." That legislation instructed the FCC to find spectrum in this set of bands to auction off, and allocated a portion of the proceeds to (a) defray the cost of moving the existing users of the spectrum and (b) building a public safety wireless network.
So, the FCC, while it conducts the auction, does so at the request of, and on the behalf of, Congress.
Usually it is a troubling sign for a government if they are selling off assets and still running a deficit. We see it when small local governments sell off buildings and then rent the very same building back from the person they sold it to. So that leaves the question: "Selling off the spectrum- good thing or bad thing?"
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the people dumping the money into campaigns. In this case you can clearly see that the buyers for the spectrum are the ones deciding, since every item listed will result in the government buying services from them.
"here is 40billion to buy this pipe. but you have to promises to use it to pay to deliver water via that pipe to those places where i plan to install said pipe"
Always Check the Source (Score:2, Funny)
The wireless industry estimates that for every 10 Megahertz of spectrum licensed for wireless broadband, 7,000 American jobs are created and U.S. gross domestic product increases by $1.7 billion
I estimate that for every million dollars I receive, I create 8,000 American jobs and increase gross domestic product by $3 billion. They should talk to me before spending all the money they got from this auction.
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no.. My question relates to who decides where the proceeds go. This is a public auction, licensing public airwaves. Who makes the determination where the proceeds go. The money should go to the Treasury and it's dispensation determined by congress.
All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.”
— U.S. Constitution, Article I, section 7, clause 1
“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”
— U.S. Constitution, Article I, section 9, clause 7
So who in the government approved funding for this new national response network from these proceeds?
Re:Always Check the Source (Score:5, Informative)
Congress and the President did. It's Title VI, Subtitle D of the "Middle Class Tax Relief and Job Creation Act of 2012."
http://www.gpo.gov/fdsys/pkg/P... [gpo.gov]
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Any free bands (Score:1)
Are there any free bands in that mix for the rest of us? For the likes of 802.11a/b/g/n/ac? I would say those free bands has done more.
It's a regressive tax. (Score:1, Interesting)
A mobile phone is practically a necessity. The cost recovery on such massive "investment" is nothing more than a regressive tax. Well, actually, it's also a great barrier to entry.
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Plus if you are unemployed what are you doing wandering around away from home and your land line anyway.
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Land lines are more expensive than cell phones. Why would an unemployed person have one?
And why do you assume that an unemployed person has a home?
And, if someone is unemployed and has a home, shouldn't they be out looking for a job all day, rather than sitting around hoping someone will call them? If they're sitting at home, they can't apply for jobs unless they also have internet access, which in your world must be an incredible luxury for the unemployed. Do you propose that they give out the land line
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I mean, none of us were remotely able to find and get jobs back in the dark ages of the late 90's and early 2000's. Yep, we all lived in caves, some with the luxury of landlines, and almost no internet connectivity for most.
Yep, we were all pretty agrarian, farm families at home with no hope of finding a job outside, nor communicate with anyone further than the end of the block.
Seriously, this wir
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Back then, potential employers understood that they would need to call early or late and probably leave a message. Or, they might, God forbid, decide to hire you on the spot. Now, you answer the phone when they call or they move on.
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And how do you pay for the "IP" part of that "VoIP" if you don't have a job? It makes 10000x more sense to keep a prepaid cell phone than home internet access when you're unemployed. You can also go to the library for internet access, or to apply for jobs, etc., but if you're contacted by a recruiter you need to pick up the phone whether you're at the shelter getting dinner, or at the library, or in the bathroom.
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It makes 10000x more sense to keep a prepaid cell phone than home internet access when you're unemployed.
I disagree. It's 2015, but would have said the same thing 10 years ago. You need Internet and an email address to find a job. Also without Internet, you will end up using that prepaid cell phone a lot, as it will be your only communication with the outside world.
but if you're contacted by a recruiter you need to pick up the phone whether you're at the shelter getting dinner, or at the library, or in the bathroom
When you have home Internet you will end up spending most of your job-less time there. Also if you are that poor so that you can't afford Internet (doesn't even need to be fast), then I don't see why you should be dinning at restaurants anyways as i
Yes, we should give it away for free! (Score:4, Insightful)
Yes, we should give that obviously highly valuable wireless spectrum to cell phone companies for free! Because they will pass those savings directly to us, and not horde the profits for themselves!
And more importantly ... (Score:5, Informative)
And more importantly, this correlates to a 5% increase in executive compensation, and a 2% increase in the hookers and cocaine fund.
This will also increase the pool for bribing politicians by an additional 1.5%, ensuring the best opportunities to purchase favorable legislation.
CEOs are said to be pleased with the forecasted pillaging of the American public, and look forward to raising your rates and finding new and creative ways to give you less for your money, while optimizing long-term executive compensation.
Suckers.
Unbiased estimates... (Score:3, Insightful)
The wireless industry estimates that for every 10 Megahertz of spectrum licensed for wireless broadband, 7,000 American jobs are created and U.S. gross domestic product increases by $1.7 billion."
Yes, of course they do. That's a nice press release for both the wireless industry, and the politicians they paid for.
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Great financial justification (Score:5, Insightful)
"The money will be used to fund FirstNet, the government agency tasked with creating the nation's first interoperable broadband network..."
You could just as well put the money in a pile and burn it. Heck, given the inevitable follow-on costs, burning it would be cheaper...
"...contribute over $20 billion to deficit reduction". Meaning it's going into the general fund, where it will be promptly spent three or four times over, each time with the justification that the expenditure has already been paid for by the wireless auction.
Spectrum (Score:4, Funny)
Yellow everybody. Let's hope those who lost out in this auction aren't feeling blue about it. It'd be understandable to be green with envy, sure, but I hope no-one's seeing red, because the last thing we want is for things to turn violet. Orange you glad this hasn't happened? Best just to heave a cy-an move on.
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$45 Billion is just another tax, different form (Score:4, Interesting)
$45 Billion? True, this is the amount raised. All of it has been paid to Uncle Sam.
The same amount of $45 Billion is also telecomunication companies' best estimate, a modelled amount, equal to the net present value of all their clients' prospective fees, less their expenses, to be collected in the future.
If a customer would ever ask a question, why his wireless service bill is so high, he would be given an answer that the bill includes amortization of $45 Billion of previously capitalized expenses, which companies had to pay.
The GDP increase by $1.7 B is merely an additional tax, that the parties will need to pay, and represents increase in prices that the customers will sooner or later pay.
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Re:$45 Billion is just another tax, different form (Score:5, Insightful)
Unless you can find the political will to separate highly regulated tower operators and the phone carriers (so airtime would be a utility and there would be competition with the carriers), then it's always going to be like this. It could be worse, at least there is some competition in the wireless space. It's not wireline broadband.
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Wifi only works because of the very short range it has. And more to the point, if your Wifi does not work because of interefence from someone else there is nothing you can do about it.
Re:$45 Billion is just another tax, different form (Score:4, Informative)
and that's exactly how wireline should work
government should build and maintain the fiber, and companies should lease it for any and every service, comprehensive or fractional, that the free market commands
the current american system is a fucking joke- there's no competition in wireline because the barrier to entry is too high, it's just too expensive to build the shit
so we have a monopoly. it should be the government that governs it. because letting an economic parasite drain us like a vampire for shoddy service is certainly worse than any criticism you want to level at government, and competition from google isn't coming for another 40-50 years to your town
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government should build and maintain the fiber
Not necessarily. Where I live, the physical infrastructure is owned by various private companies. There is however regulation that forces these companies to lease bandwidth to others, for a reasonable fee. This works well in practice.
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i see that as a half measure but i still approve, it is an improvement over the status quo elsewhere. how expensive is your cable bill?
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Not sure about cable, but I have a choice of 6 different companies providing internet at my address, with prices between 20 and 40 EUR/month. I picked the most expensive one, but they offer a fixed IPv4 address, and let me run my own servers, including SMTP.
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oh, EUR, euro
you guys understand the concept of a natural monopoly so much better than americans
in the usa we believe letting a rent seeking parasite siphon more money for shoddier service, and buying off our government to keep the arrangement, such as with healthcare, is "capitalism." and anyone who suggests dealing with natural monopolies as they should be dealt with: government control or heavily regulated, as you describe, is "evil socialism"
propagandized morons
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Typically the homeowners and business owners own the land, the government demands a right of way through it or above it (for pole-hung services), then leases that right-of-way to too few companies.
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additionally, no one wants their roads constantly dug up by various companies all the time, or the poles by their house an ugly rats nest of various cables
better: one cable, fractionally leased
as tech improves and one cable means much more bandwidth, government progressively upgrades the single cable, and has more bandwidth to lease
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This is the ideal, yes. Possibly with a lower bandwidth point-to-tower connection for sideband and failover.
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Monopolies create themselves. Government is needed to prevent that.
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Couldn't the government lease it to the TelCos? For e.g., a limited-time lease (5-10) years with either a fixed amount (increasing on a yearly basis) or a certain percentage of revenues generated?
Didn't think this through completely, but this might generate more cash to the government. Also, there could be some strings attached so that no actual monopolies arise...
Just a thought.
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If a customer would ever ask a question, why his wireless service bill is so high, he would be given an answer that the bill includes amortization of $45 Billion of previously capitalized expenses, which companies had to pay.
And this would be a lie. The only reason cell bills are high is because that is the price people are willing to pay.
Re:Spectrum is measured in Hz? (Score:5, Informative)
The space between 100 MHz and 165 MHz would constitute 65 MHz of spectrum. So would the space between 1 GHz and 1.065 GHz, or 1 KHz and 65.001 MHz.
According to this US government source [doc.gov], this auction was for 1695-1710 MHz, 1755-1780 MHz and 2155-2180 MHz -- a 15 MHz band and two 25-MHz bands, totaling 65 MHz.
To a first approximation, 65MHz of spectrum gives you a fixed amount of capacity, regardless of its start and end points.
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This threw me off too, because "65 million cycles per minute of spectrum" hurts my brain.
However, "spectrum" is defined as "frequency range", similarly to how you can talk about "temperature range". If today's high temperature is 70F (20C) degrees and the low temperature is 50F (10C) degrees, then today's temperature-range is 20F degrees or 10C degrees. To define the range you need to include the unit in which the end points of the range are measured.
I still want to call the temperature range "20 F-temper
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To a first approximation, 65MHz of spectrum gives you a fixed amount of capacity, regardless of its start and end points.
No, that's a zeroth approximation. To a first approximation, 65Mhz of spectrum gets you capacity linearly proportional to the frequency [wikipedia.org].
Of course, in reality there's a few more nasty surprises -- higher frequencies can carry more capacity but have much worse penetration through obstacles. Lower frequencies give better coverage at the cost of capacity. That's why shoving T-Mobile and Sprint up in the 1800+ nosebleeds means they will never get the coverage range of VZ and ATT down in the 700-800 range.
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Not according to the link you provided, which says:
In 1927, Nyquist determined that the number of independent pulses that could be put through a telegraph channel per unit time is limited to twice the bandwidth of the channel.
In this case, bandwidth would be 65MHz. The carrier frequency isn't mentioned in the Nyquist relation.
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No, that's a zeroth approximation. To a first approximation, 65Mhz of spectrum gets you capacity linearly proportional to the frequency [wikipedia.org].
I don't think so.
I am out of my depth here somewhat, so I may be completely wrong. But I think that any frequency band of a given width has the same information capacity as any other, given identical signal/noise. That's what the first equation on the Wikipedia page you linked seems to state -- there's no separate term for "base frequency" of your channel. There are fairly simple techniques for transforming a "passband" (a band starting or centered at a higher frequency) to a "baseband" signal (starting at
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Nope, reread your link. Channel capacity (at a given signal to noise ratio) is proportional to bandwidth alone. 1.000GHz to 1.065GHz is as good as 20.000GHz to 20.065GHz.
But as you say higher frequencies often have worse propagation characteristics, especially through buildings, which reduces channel capacity by reducing the signal to noise ratio.
Public goods (Score:1)
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Furthermore, nowhere is spectrum mentioned (of course, it wasn't known about at the time), so it should be covered by the 10th Amendment, and left to the states. Before someone claims that the nature of spectrum demands federal oversight due to it's perv
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How do you square selling a piece of land to private parties?
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Connecting all four points?
I love the smell of deficit reduction in the morni (Score:1)
> Sales totaled $44.89 billion
Yey! We can put off borrowing for 14 days!
> [of which] contribute $20 billion to deficit reduction
Yey! I mean 6 days!
Thanks a lot (Score:1)
So, in other words... (Score:2)
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... my job is worth 1428.57 Hz?
hertz or hurtz? sorry I couldn't pass this one up. I do what you did with the math, like what someone did in article about Apple app store of $10 billion created 627,000 jobs that results in one job of $15948.96.
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