Who's in on the 700MHz auction?

Feel free to shout it out in the comments, we know y'all are gunning for a piece. What's that? Don't quite have enough change in the couch to hit the $4.6 billion minimum bid on the 700MHz C block? How lame. Lucky for us, there are quite a few companies out there that do have that kind of cash earmarked for this and other highly desirable parts of the spectrum, which should make for some exciting bidding. Too bad FCC's auction process, which begins on January 24th, is totally blind, and with the exception of the few companies that have publicly stated their intentions to bid, we won't know much about how the auction went down until February or March. The following, however, are confirmed:

• AT&T; T-Mobile says it already has plenty.
• Cox Communications; Time Warner and Comcast aren't biting.
• Frontline; gunning for the D block.
• Google; might just do the minimum to ensure the C block is "open."
• Verizon; Sprint is busy with WiMAX.

Sounds like slim pickings, but there a bunch of wild cards out there, including satellite providers, smaller wireless carriers and even big box retailers.

[Via paidContent.org]

[Brodie @ Dec 5th 2007 1:39PM]

I've seen eBay auctions for balls of lint with more action than this 700 MHz sell off...

From day 1 Google slapped down the number 4.6 billion, and since then the FCC pretty much said that would be the reserve price on a piece of the C block. I wonder if Google had started off with a lower number, if there would be more competition. I suppose in the end if Google isn't bluffing about their bid, then more power to them.

[bradrel @ Dec 5th 2007 2:30PM]

The $4.6 Billion is based on prior auctions, not Google's "bid".

http://fjallfoss.fcc.gov/edocs_public/attachmatch/FCC-07-132A1.pdf

[Brodie @ Dec 5th 2007 2:46PM]

Bradel, I didn't realize this was the case. Interesting find. I didn't read through all 300+ pages of the report, but i'm starting to get that bored at work that I might give it the old college try. Plus for you.

[FK @ Dec 5th 2007 1:47PM]

Will they accept PayPal?

[WhoopieG @ Dec 5th 2007 2:04PM]

No, but they will accept Flooz.

[Andrew @ Dec 5th 2007 3:03PM]

Only Google Checkout, sorry.

[famousamos34 @ Dec 5th 2007 5:37PM]

This might qualify for $10 off orders over $2b at FCC.gov

[Jon @ Dec 5th 2007 1:52PM]

Do I need to offer proof that I have the money available in order to place a bid?

I'm half tempted to put in a $4.6bn bid myself. OK, I'm actually a couple of nickels short but it's presumably a certainty that I'd be outbid so I wouldn't win, I'd just get my name in the papers.

[paloooz @ Dec 5th 2007 2:03PM]

Well you're just full of good jokes today, aren't you?

[AdamY @ Dec 5th 2007 2:50PM]

I recommend consulting your attorney as far as your contractual obligations for posting a bid in an auction...

;-)

[jonathan @ Dec 5th 2007 1:56PM]

This baby is Googles.

They have the cash, the desire and the sound biz plan.

Imagine this- Google Mobile App on many phones, Google owns the airwaves, Google sells and delivers your mobile adverts, Google stock breaks $2000, since they will follow the Warren Buffett model and never split.

[AdamY @ Dec 5th 2007 2:59PM]

I hate to point this out, but you don't just buy wireless spectrum, and then poof, you can now start making cell phones that work wherever that spectrum is.

You've got to build billions of dollars worth of national infrastructure, especially if you're trying to roll out a nationwide network.

I'm surprised anyone actually believed Google was going to be doing this. They have enough trouble justifying their profitability in a Web 2.0 Bubble economy without having to deplete the entirety of the cash reserves hoping to penetrate a market (wireless) that takes years before it actually starts generating a profit...

Google was obviously never going into this auction hoping to own the Nationwide C spectrum. It's like Stephen Hawking announcing he's going to bid on a brand new Ferrari. Why? It's a waste of money to that entity. The only people this makes sense for is carriers looking to migrate from their existing spectrum. They can afford a minimal replacement cost (you've already got giant towers, switching nodes, electricity, just plug in a 700 mhz transceiver) and can use dual-band devices to mitigate the transition cost.

This is Google's 'Nam. They waged a public war, with no capacity to win the war on the merits of their own tactics or abilities, but the pressure exerted in the media and in the public (and eventually in the government) kept the spectrum open for Google to do what Google does best: Makes sure you see advertisements everywhere you go in everything you do.

Never forget that. Google does all sorts of cool things (Earth, Search, Gmail, etc.) but those things all drive G's bottom line, and their bottom line doesn't come directly from you and me, it's routed through another company who has stuff to sell us, and that company gets the money out of our pockets. They, in turn, give that $ to Google in the hopes of roping more of us into purchasing their product.

[Andrew @ Dec 5th 2007 3:12PM]

Wait, isn't the infrastructure already there with all the towers? Or am I way over-simplifying this?

[AdamY @ Dec 5th 2007 3:20PM]

@ Andrew

Bidding on spectrum is pretty much the biggest con in the U.S. Government, and makes me wonder how the hell they manage to burn through our taxes every year.

Spectrum is the right to broadcast on that frequency. All things that currently broadcast on the frequency (UHF and Analog TV signals) could perhaps be converted, but they would be purchased from the private entities that own them in a separate auction, assuming of course, that they could be used to broadcast whatever the spectrum purchaser wanted to broadcast.

The $4.6 Billion dollars is for the right to put up your own towers, and broadcast your own signal in the chunk of spectrum (in this case, various chunks of the 700 mhz band).

BYOE.

It's expensive. The FCC is essentially selling them air. Or rather, the right not to face criminal, Federal prosecution for using that air.

[Andrew @ Dec 5th 2007 3:27PM]

So owning spectrum is like...owning airspace?

[AdamY @ Dec 5th 2007 3:40PM]

@ Andrew

Basically. The spectrum is already there, the government (FCC) just decided that people can't go around using the spectrum however they damn well please, and therefore regulated it.

Now, in order to legally broadcast on that frequency (i.e. have your signals travel in that portion of the spectrum) you must have purchased that right from the FCC. Those rights typically (as you can see) go for billions and billions of dollars.

Wireless carriers typically have to buy the spectrum in "markets." That means that you can't (usually, 700 mhz C block is different, so is D, but it has strict public safety requirements to met) just buy some chunk of 1900 mhz and POOF you can now broadcast your signals on that chunk, nationwide. You buy Atlanta 1900, or Chicago 1900, and you only get "chunks" of that spectrum. Then, it's up to you, now that you have the right to broadcast in that spectrum without punitive legal action (taken by the FCC) to put up the equipment that can in fact broadcast there.

700 mhz C is choice nationwide (i.e. I buy C block spectrum, I can put up towers anywhere* that broadcast in that spectrum, and I'm okay) spectrum, which is great for phone service because it's a big, powerful, signal that can go through thick structures (walls typically) and can handle really basic tasks (like sending simple voice communications, phone calls, I'm assuming SMS, and all those other simple goodies) but falls short when it comes to delivering "Next-Gen" type services.

However, if you're a 50 million strong phone company, and half your customer base just talks on the phone, you can unload THEIR needs into that 700 mhz band, giving them acceptable performance, while you continue to free up the other spectrum you own and being implementing your 3 and 4G networks.

[Andrew @ Dec 5th 2007 6:25PM]

So it really isn't even reasonable to think Google will buy this thing and emerge as a leading carrier in any short order.

That's fair enough. Thanks for the info, you're really well informed on this.

[Big Dog @ Dec 5th 2007 2:10PM]

Apple should win it and give the deathrape to ATT

[Grizz @ Dec 5th 2007 2:44PM]

Death-what?!

[AdamY @ Dec 5th 2007 3:01PM]

@ Grizz

No, not "Death- anything", he's got a lisp, he said "de ath rape." ;-)

[abadtooth @ Dec 5th 2007 2:14PM]

It would be cool if Google gets it :)

[shanoboy @ Dec 5th 2007 2:18PM]

So who gets the cash that is paid from the winning bidder for the rights to the spectrum? The feds?

[zebcarlson2007 @ Dec 5th 2007 2:26PM]

Of course, because they need the cash for those $50,000 dollar hammers.

[kjb434 @ Dec 5th 2007 2:37PM]

Just like every other spectrum in the US, the FCC is pay for the rights to use it. Just like every broadcast radio and TV station having to pay every year to keep their license.

[ark_v2 @ Dec 5th 2007 2:32PM]

This is going to be exciting. Nice! Go google!

[conor.galligan @ Dec 5th 2007 2:33PM]

Forgive me...what's the point of the 700 MHz range? Does it have inherent benefits? Are the frequencies currently used inadequate?

[kjb434 @ Dec 5th 2007 2:42PM]

It will be vacated by Analog broadcasts when Digital TV becomes standard. The lower Mhz frequency has the potential to penetrate walls and to reach much further from broadcast towers. The lower MHz channel will allow for widespread data access.

Just like 900Mhz home phones are much better in range and quality than 2.4Ghz phones, the 700Mhz will allow whoever buys it a lot of power and reach for whatever they want to use it for.

[AdamY @ Dec 5th 2007 3:09PM]

Everything above is correct, however, there's also another nifty morsel:

The C block is a nationwide spectrum.
http://arstechnica.com/news.ars/post/20070815-700mhz-auction-whats-really-up-for-grabs-and-why-it-wont-be-monopolized.html

Being nationwide spectrum means you circumvent the need to purchase spectrum in individual markets, if I'm reading the stuff correctly. The 700 mhz frequency gives you better penetration, but at the expense of speed. It'll be great for phone calls, but pretty crappy for 'wireless broadband.'

However, all the companies own spectrum in the higher bandwidths, and anyone winning C, could, conceivably, unload their voice and low-end data into that spectrum, and use their higher frequency spectrum to roll out 4G technology, most likely LTE.

~Adam

[Jon @ Dec 5th 2007 2:49PM]

Anyone know what can actually be done with this 700mhz doo-dad?
What does it actually mean to Joe consumer?
What kind of data speeds could be expected?

[AdamY @ Dec 5th 2007 3:13PM]

http://arstechnica.com/news.ars/post/20070815-700mhz-auction-whats-really-up-for-grabs-and-why-it-wont-be-monopolized.html

The C block is nationwide spectrum in the 700 mhz band, which gives you high level penetration, but low bandwidth speeds. It won't be used to roll out 3G or 4G technologies, but can be used to maintain legacy systems or traditional low-bandwidth needs, while the higher frequency spectrum owned by these wireless companies can begin to be converted into 4G (LTE or XOHM) technology.

It's going to have little bearing on Joe Consumer. Building out spectrum is notoriously slow, and despite the marvelous technological achievements that are sure to come from this, from Joe Consumer's perspective, it's going to appear as the "magical wheel of progress" just doing it's thing. ::shrug:: Things get faster, and they tend to get faster at a comprehensible rate. Joe C. figures it's about time that we've had 3G for a while, we should have 4G any day now, without any real understanding of what happens or where it comes from. They just assume Jesus did it. Or magic. Whatever.

You won't notice a difference, just that slowly newer devices will seem faster, and you'll think "About damn time."

[Aganack @ Dec 5th 2007 2:53PM]

I thought Verizon had shed it's WiMax plans for the GSM supported G4 network

[!!! @ Dec 5th 2007 4:49PM]

It is. It's just Engadget lacks decent copyeditors to clarify their statements. (Hint hint)

[Kerry Saylor @ Dec 5th 2007 2:56PM]

So, is any of this 700mhz bandwidth available to the general public? I'm thinking more in line with personal two-way radios - can I go out and buy just a fraction of a frequency to use for my personal benefit? FRS radios are too congested to use reliably - and many other bands are getting pretty congested as well. I don't need the entire 700 bandwidth - just 700.0125 specifically, for example.

[AdamY @ Dec 5th 2007 3:16PM]

No.

Only to corporations who can pony up the dough to bid for it. I suppose if Billy G. wanted 700 mhz spectrum so he and Ballmer could play walkie talkie nationwide, they *could* do it, but it makes little sense.

Entry bid for the premium spectrum (C Block), broken into various chunks is $4.6 bln.
I can only imagine that the other, less premium blocks, will take a substantial hit, but nothing that puts it in the realm of the consumer.

Besides, what do you really need nationwide spectrum for anyways?

[AdamY @ Dec 5th 2007 3:16PM]

No.

Only to corporations who can pony up the dough to bid for it. I suppose if Billy G. wanted 700 mhz spectrum so he and Ballmer could play walkie talkie nationwide, they *could* do it, but it makes little sense.

Entry bid for the premium spectrum (C Block), broken into various chunks is $4.6 bln.
I can only imagine that the other, less premium blocks, will take a substantial hit, but nothing that puts it in the realm of the consumer.

Besides, what do you really need nationwide spectrum for anyways?

[Frankenstein Black @ Dec 5th 2007 3:14PM]

Hum, let’s see now. Scenario; I just got hired as a consultant to provide advice to one or both of the Satellite TV companies. My advice? Get in there man! Why? Well here are the big four:

1. Use a terrestrial repeater system with that newly acquired spectrum to service the millions of potential customers that don’t have proper S by SW line of dish sight.

2. The need to diversify (just like the telecoms who are busy encroaching on your “turf”) by offering “real two way” internet service (not that Sat DOWN twisted pair UP abomination) and VoIP telephony.

3. The current mobile content delivery system leaves much to be desired. The automotive dish systems are, well, cumbersome to say the least. Use those terrestrial repeaters to bolster the service. Don’t sit back and let a merged Sirius/XM (if it happens) use their Back-Seat service to further blunt your growth into the mobile space.

To summarize: The spectrum auction gets you:
1. Millions of new customers that don’t have “line of sight”.
2. The ability to offer “real” internet ISP and VOIP services.
3. The ability to efficiently deliver viable in-vehicle content.
4. ??

Hire me and I will gladly articulate the hidden 4th item. Talk to you soon :^)...

[Scoottie @ Dec 5th 2007 3:23PM]

Can we please forget wireless even exists and use this money for something usefully like fiber to ever house. If identity theft is high now it will only get worse when you send your data over these airwaves that anyone can intercept.

[jdog @ Dec 5th 2007 3:53PM]

The problem with google winning this auction is not the open-source nature of their "plan"....it's the TOS. Think about it - Google already retains data on your web searches by IP address for something like 18 months. Now they just released a version of google maps (mobile) that triangulates your position based on cell data, not GPS. If they truly do have a form of their service that's ad-supported, do you really think it'll be completely benign? You may be getting Domino's ads when you walk past one, Nike ads when you go past a Foot Locker. How much intrusion are you willing to accept? And, more to the point, how much data are you willing to let ONE COMPANY collect on you? They could GIVE service away, and I wouldn't take it if the TOS resembles anything like this idea - smells like too much Big Brother for my taste.

[Kurtis @ Dec 5th 2007 4:32PM]

Then don't take it, and shut the hell up. If you were forced to use their services, or if they actually were doing illegal things with your data, then you can complain about it. But since all of google's services are completely optional, and they aren't doing anything sketchy/illegal with you data, shut the hell up.

[jdog @ Dec 5th 2007 5:20PM]

oh just giving food for thought Kurtis, many seem wowed by the possibilities, yet unaware of the law of unintended consequences. You are similarly obliged to follow your own advice.

[Joshua Walters @ Dec 5th 2007 5:43PM]

Its as good as Verizon's.

They are the only company foolish enough to buy "Open Spectrum".

Google will bid, but they wont buy. They have no reason. They know Verizon NEEDS the extra spectrum to be able to expand their network.

Since its required that it be open, Google will just piggy back off of it. There is no reason for them to pay for it.

Verizon on the other hand has the know how and probably the equipment to get it up and running. They could use this to enhance the range of their phones (an extra spectrum cant hurt) and possibly be able to speed up their mobile internet service (I have no idea how fast the frequency is).

[iamjfarrell @ Dec 5th 2007 5:50PM]

How long would it take to have these spectrum up and running and providing service?

[Kevin @ Dec 5th 2007 6:52PM]

It's been said and said again. The Spectrum Is Already There. The only thing these companies would be paying for is the right to use it.

It's just like an apartment. You pay your rent, you can live there. It's up to you to buy furniture (infrastructure, transmitters, etc.) and invite people over (get customers to use it).

[iamjfarrell @ Dec 5th 2007 8:00PM]

Thanks for telling me what I already know. What I am more curious to know is how long do you think it would be till I can buy a phone and make a call on the 700MHz network?

[Datacide @ Dec 5th 2007 7:22PM]

I'm going to do my best to secure funds to buy a range in the matching action here in Canada for my startup (bluecable.ca - undergoing redesign). Anyone who has knowledge in the cellular industry up here want to help me out? We don't really have that many cellphone companies to choose from...

[iamjfarrell @ Dec 5th 2007 7:50PM]

How long until we can use this? would it take as long as the nextel/sprint merge?

[blomster @ Dec 10th 2007 9:33AM]

@iamjfarrell: Feb. 18, 2007

[blomster @ Dec 10th 2007 9:35AM]

Whoops! Feb. 18, 2009

[Joe Anstine @ Dec 6th 2007 2:50AM]

I AM.

[blimus @ Dec 6th 2007 8:12PM]

I think this is sheer gameplay, they're feigning disinterest to they and hide their real strategy ... which is no-doubt to compete in the auction but keep the price below 4.6bn