I was confused about the anonymous bidding process chosen by the FCC as it auctions off our hope the 700mH spectrum. So, I asked Harold Feld, who kindly wrote back with the following explanation (used with permish, of course):

Anonymous bidding: Until now, the FCC has published at the end of each
round who bid what for every license. This is called an “open”
auction format. When the FCC created this format, it was thought that
maximizing the information available to bidders would maximize
efficiency of the auction and thus maximize revenue.

After more than ten years of FCC auctions, it has become obvious that
the theory is completely, utterly and horribly wrong. What open
bidding does is allow parties to signal each other and to target new
entrants for attack. Through open bidding, the largest incumbents
exclude new entrants and divide the licenses among themselves cheaply.
The smaller players go along, because they survive by avoiding
direct conflict with the bigger players and also like to exclude new
entrants.

Under anonymous bidding, the FCC only provides the amount of the
highest bid on each license at the end of the round. Thus, everyone
can see what bid they must beat, but they do not know who has bid on
the license. Nor can they see other bids besides the winning bids,
which can be used for signaling. This makes it much more difficult
for incumbents to rig the auction in their favor because they cannot
coordinate attacks on new entrants and they cannot enjoy the benefits
of a reputation for retaliation.

Greg Rose has done two important studies on anonymous bidding. The
first was a ten year longitudinal study of FCC auctions for the Center
for American Progress (with Mark Lloyd). The other was two studies on
last summer’s AWS auction for New America Foundation.

Here are links to the studies:
Initial post on anonymous bidding
Post with link to CAP study
Post with links to AWS studies

Combinatorial bidding, which the FCC approved for the 6 REAG licenses
in the “C” Block, is a way to minimize the “exposure risk” and
encourage people to bid more aggressively. Here’s the theory.
Suppose I want to build a national footprint, but I’m afraid I won’t
win all the licenses necessary. I am therefore afraid to bid at all,
because I may get stuck with licenses I don’t want and have to sell
them at a serious loss.

With combinatorial (or “package”) bidding, I am only required to pay
for the licenses if I win the entire package. If I don’t win the
whole package, all my winning bids are rendered null and void. So I
can now bid agressively without fear and am encouraged to enter the
auction and try for a national footprint.

The big potential new entrants, like Google and the DBS companies,
wanted package bidding. So did AT&T and Verizon. We at PISC
supported it because it encourages a national new entrant and doesn’t
make it that much easier for the incumbents, who are likely to win
anyway.

I rely on Harold’s blog, as well as his other writings, for help understanding the complexities of this stuff… [Tags: fcc harold_feld 700mh wifi ]

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Susan Crawford has an excellent analysis of Google’s teaming up with Sprint. In sum, Sprint is pushing for WiMax, and Google seems to be hedging its bets on the 700mH spectrum auction which it is very likely about to lose. Susan considers why Google isn’t pushing for the same degree of openness with Sprint as it is for the Internet 700. [Tags: susan_crawford google sprint wimax fcc ]

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David Isenberg blogs a map of broadband availability in MA, put together by the Boston Globe. Keep in mind that this map defines broadband as 1 megabit, which is five times higher than the ludicrous definition promulgated by the FCC, but is many times slower than what’s taken for granted in much of the developed world. [Tags: broadband net_neutrality fcc savetheinternet ]

Megan Tady writes about why it’s so hard to get information like that…including the FCC’s reticence.

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In response to my posting about the desirability of structurally separating businesses that connect us to the Internet from businesses that provide content and services over the Internet, Esme Vos, of MuniWireless.com, in an email reports some good news from Europe:

Viviane Reding, European Commissioner for Telecommunications, has already said that the Commission will seek structural separation in the next EU round of telecom regulations. In addition, the Commission sued the German government for allowing Deutsche Telekom to exclude competitors from its new fiber optic networks. The German government believes DT deserves a regulatory “holiday” to allow it to recoup its investments in fiber.

[Tags: structural+separation delamination esme+vos ]

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Harold Feld, who knows more about this in his little finger than 100 of the smartest little fingers you care to pile up, thinks AT&T’s “tepid expression of possible interest in a Frontline ‘E Block’ license” is big news, “on par with support from Senator John Kerry and Presidential candidate John Edwards.” Says Harold:

That looks pretty tame, until one considers the speaker and the context. In spectrum lobbying terms, this is roughly the equivalent of Iranian President Mahmoud Ahmadinejad saying that, under the right circumstances, he would accept an invitation to visit Israel and meet with Israeli Prime Minister Ehud Olmert.

Frontline is bidding for some of the 700mH spectrum so it can act as a wholesaler, opening up the band to whatever businesses want to participate. This is a gazillion times preferable to selling it all to the incumbents who will continue to freeze out competitors and thus freeze out all innovations that are not theirs and that do not support their particular business model. AT&T now says it’d consider bidding for a spread of spectrum even if it were required to act as a wholesaler and open it up to all comers.

Harold speculates that AT&T sees this as a way of getting the national coverage it wants. It would rather have coverage at the price of openness than cede it to cable.

David Isenberg has created a transcript of the snippet available of John Kneuer — Bush policy guy — at Supernova. The bit David had available started immediately after I asked him the first question. Since he posted it, the entire video has gone up on the Supernova site.

Meanwhile, the Washington Post has run a scary op-ed opposing open access from two guys who have taken money from the the telecom trade association. I know two industry insiders who are going to be receiving some very expensive single malt whiskey from some powerful friends! [Tags: 700mh telecom net_neutrality john_kneuer supernova2007 supernova harold_feld at&t david_isenberg wapo]

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The 700 mH range of the public airwaves is coming up for auction. It’d be nice if it got used for the public good. There’s a good discussion at Slashdot. [Tags: 700 slashdot fcc open_ spectrum wifi ]

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Fon (Disclosure: I’m on the board of advisors and have stock options in the company) has just announced that it’s done a deal with Time-Warner. This is a big deal for Fon. And I hope it’s a step forward in providing low-cost wifi everywhere.

When you sign up for Fon, you get a wifi router from them that provides public and private access. Anyone who comes across the public signal can use it for $3/day ($2 for days after that). If you provide public access, you can use anyone else’s Fon public signal for free — free roaming. It’s a clever idea, but in the US the biggest stumbling block has been the fact that to offer public access, you have to violate most ISP’s terms and conditions. But now not Time-Warner’s. I assume also that T-W will be doing some marketing of Fon. (I also assume that Time-Warner gets a cut of the per-day fee for Fon users. As Martin Varsavsky, Fon’s founder, has been saying from the gitgo, Fon expands broadband use in ways that can benefit the broadband suppliers.)

I like open, free wifi. My own wifi router is un-WEPped. But I also like the incentive system Fon has in place to encourage people to provide public very low-cost wifi access. So, I like today’s news about the Time-Warner partnership. [Tags: fon wifi broadband]

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For something I’m writing (for free), I want to make the case for the benefits of having a “wifi blanket,” by which I mean, loosely, making wireless Internet connectivity so common that we can rely on it being available just about anywhere we are in this country. Depending on how it’s implemented, that might work out to coverage as broad as the reach of TV or cell phones, or, say, cheap or free connectivity available to 90% of the population. (I’m making up this number.) And it doesn’t have to be wifi. If it’s WiMAX or open spectrum or something else, I don’t care, so long as it’s cheap or free, truly open, crosses economic strata, and is so common that we take it for granted.

For now ignore the costs and the practicalities. If such a thing were accomplished, how might it affect us? What opportunities would it open? What sort of economic stimulus might it provide, especially if we assume that a wireless blanket would stimulate the growth of wifi phones (or combo phones), which be more general purpose Internet devices. What might the blanket do for education? Politics? News and entertainment? Marketing? National security? Do you have any statistics you’ve found or made up? Pointers to actual research? Wild-ass speculation? Science fiction scenarios? Paranoid plots? Bring ’em on! [Tags: wifi net_neutrality telephony ]

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Susan Crawford gives a talk about our inability to communicate outside this room

Imagine there’s an easy-to-assemble toll booth. We drive into the gray world of the Land of Low Expectations. We’re getting what the current providers give us.We can then go to the Land of Glittering Generalities that attempt to maintain the incumbents in power.

How do we get reason back? “Communications regulation should be about optimizing human communication.” We have to persuade people that economic growth comes from new ideas, that the Internet is the greatest source of new ideas we’ve ever seen and that the telecom policy has to put the Internet at its core. We should claim that the Internet is different. “People are very uncomfortable when we say that, but we have to say it.”

To help reason, we should be showing pictures. E.g., a chart of the market plummeting recently, and a chart of the weakness of the US economy. “If the rate economic growth in the US over the next 45 yrs were to increase by 0.5% per year, it could resolve all of the budget difficulties associated with the aging of the Baby Boom generation” with plenty left over. So, how do we continue growth in the US? “We need more meta-ideas about the generation of new ideas.”

Aha! The internet – a source of new ideas.” It’s group-forming attributes and the chance to fail quickly are vital, too.

Policy outcomes: Universal service. Divestiture, separating services from content [i.e., the people who supply bit transport should not provide content.]

We need to professionalize, with better comparative data to show the effect of the Net on economy, the effect of Net neutrality, etc. And we need serious leadership.

We’re running out of time. The future of the Internet hangs in the balance.

[SC for FCC!]

[Tags: fcc susan_crawford net_neutrality f2c ]

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FCC Commissioner Jonathan Adelstein begins by playing harmonica with Howard Levy. Really. [As always, the following paraphrases, abbrevites, omits, and gets wrong.]

[I’m sitting next to Susan Crawford who is blogging away. Hers will be the post to read on this.]

Then he touts the E-Rate program. But “we lack a coordinated vision for success…We need to provide for all of our neighbors. This has to be a greater national priority than it is now.” A national strategy should have benchmarks. Update the current FCC definition of “high speed” as 200kb [which is laughable — dialup is 56k]. Have standards for expressing what rates customers are getting. We need meaningful competition. “We can’t let the broadband market settle into a comfortable duopoly…” We should worry about consolidation. The Congress should use tax incentives to bring access to under-served areas, and more [can’t keep up]. We should invest in basic R&D. Be creative and flexible. We need to preserve the creative freedom of the Net. “You’re all reinventing democracy, how we share music…” We need to preserve the Net’s openness. The AT&T merger brought about an agreement about Net Neutrality that isn’t the end of the story but at least refutes the notion that NN can’t be defined.

Q:(frankston) The FCC and the Net are incompatible. The Net is what we can get by connecting our home networks from the edge. The FCC defines it in terms of services instead of in terms of bits.
A: We took a step with the AT&T merger….
Q: No, you treat it as a service. We don’t need the phone companies to run the Internet.
A: We need an infrastructure. There’s a balance here. We need to be realistic.

Q: (isenberg) The chat was wondering how much power you have.
A: I’m one of five commissioners.

Q: (brough) What about cognitive radio opening up spectrum?
A: I was going to talk about that but cut it for time. Maybe I made the wrong choice. Software-defined radio is one of the most exciting developments I’ve seen and maybe the most revolutionary in spectrum use. We need to find ways to enable them to reach their full fruition. Our engineers are examining the ways they can work. It’s a way of doing more with less because, as someone said, G-d isn’t making any more spectrum. Of course, we have to be concerned about harmful interference, but in general I’m very high on it.

Q: (JH Snider) Please elaborate on what you said about the carrot-stick approach. The FCC has been 99.99% carrot. In the past few years, the FCC has given away $50B in spectrum allocation. Look at what you did with the MMDS band. You gave it away to Sprint and they haven’t built anything. Eight years later they may actually build it out. Where’s the stick?
A: It’s so much easier to give away carrots. Politicians like to do that. It’s happened time and again in spectrum policy.

Q: (Elisha McDonald): Is the definition of Net Neutrality workable? How is it enforceable?
A: It’s a baseline and opens up the possibility of having a rational discussion without sloganeering. The Chairman testified that he will enforce it, and he’s told me that too. [Joe Plotnick from the chat: “They haven’t enforced ANY PRIOR merger conditions, as Kushnick has thoroughly documented.”] [Tags: fcc net_neutrality spectrum ]

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