Google's Great American Wireless Auction 'game' annoys US lawmakers

Several US lawmakers are annoyed that Google was allowed to "game" the recent 700-MHz wireless auction. Speaking today on Capitol Hill, during a hearing of the House Subcommittee on Telecommunications and the Internet, multiple Congressmen complained that the FCC's auction rules didn't force the world's largest search engine …

[Pooper Scooper]

Who cares?

If Google had been the top bidder, they would have won the spectrum, and they would have done something with it. Verizon stepped up because they were willing to pay more than Google was.

It doesn't matter if Google just cared about triggering the open access requirement. They made a binding bid, they got beat out, and they decided not to make another bid.

It's called an auction, and this is how it works. Doesn't matter one whit what your motives were. In the end, it's all money.

[Anonymous Coward]

So,,,

US lawmakers are annoyed that Google did something which their own rules for the auction both allowed and encouraged.

Am I the only sane person left?

[Paul Crawford]

Google have sense

They did exactly what any sensible capitalist organisation would do, they played the rules to there (legal) advantage. Had they won the spectrum at a lower cost, they would have done something with it, but they just did not want it as much as Verizon.

The whole bidding process is designed to do exactly this.

At least Google has more sense than the UK's 3G bidders who paid stupid amounts of money for their license and thus were financially crippled to actually implement a system afterwards.

If you want more 'public good' for your nation you don't offer spectrum simply to the highest bidder with minimal constraints, and presume that the 'market knows best' (think sub-prime loans here).

Whether the UK's Ofcom learns from this remains to be seen, after all, the treasury is looking desperate for cash just now...

[Chris Beach]

...wait...what?

The lawmakers are annoyed at Google? Didn't the lawmakers, sitting in the telco's pocket, put this arbitary trigger in the auction in the first place?

It's a pretty stupid way of deciding policy after all!

If the FCC had done as Google and many others recommended, and make the US airwaves a little less monopolized then this would never have happend.

[Joel Stobart]

whos the daddy?

From my point of view - good on you google. You won the American government billions, made the airwaves open; all at no-cost to yourself.

Just as a side note it appears that Cliff Stearns is the US phone industries poodle (from a mere google search). He has tried to legislate[2] for American telcos, and receives ample (financial) support in return[1]. I think these statements are just Verizon moaning that they had to pay more than they wanted; for a product more open than they wanted.

- Joel

"Verizon Wireless, which bid more than $8 billion in Auction 35, urged the FCC to acknowledge that winning bidders have the ability to opt out of their bids earlier this year when it became clear that licenses were not going to be transferred to winners in a timely fashion. In the U.S. House of Representatives, Congressmen Cliff Sterns (R-Florida) and Rick Boucher (D-Virginia) introduced legislation requiring the FCC to allow winning bidders to opt out of their bids; " - [2] Sep 2002

[1]: http://findarticles.com/p/articles/mi_m0PJR/is_/ai_110308259

Telco PAC Donations To Stearns, 2002

Verizon Communications $2,000

Source: FEC

Telecom Equipment & Services PAC Donations To Stearns, 2002

Verizon Wireless $6,000

The figures represent 2001-2002 PAC contributions and are based on data released by the FEC on Monday, June 9, 2003.

[2]: http://investor.verizon.com/news/view.aspx?NewsID=374

[I. Aproveofitspendingonspecificprojects]

Open Government

The USA has something that dictatorial regimes do not like: A freedom of information process that works. The government of chimpanzees that have control at the moment don't want anything to further such distribution of freedoms.

But it was canny enough to get someone not too close to home to hurl shit at the fans. Disinformation is a mighty tool when used on the internets. If you can't close them shame on him can't get shamed on again him...

Or something like that..

[dervheid]

Dear Bracken

No, there are a few more of us left.

Nice move from Google, I can see why the US "lawmakers" are all steamed up, they were well outwitted.

Mind you, a ten-year-old could probably outwit the majority of them when it comes to anything to do with technology.

That goes for most politicians (just in case there was anyone in any doubt about the 'statement of the obvious' above)

[Anonymous Coward]

"prevailed in the C Blcok"

C-Block: def. the inability to place the letter c in the correct location.

[Anonymous Coward]

No but Verizon and AT&T care

They placed there bods and won, now they want to change the rules.

They don't want to implement the open standards why would they? So instead they will have whined/paid the people in power to do something about it.

[IR]

Okay

So they are annoyed that Google was outbid, even though someone was willing to pay more than them? Would they have preferred that Google had won with the lower amount, even though Google never intended to win? They took a risk and it paid off, not costing them a penny, that is what the free market is about and exactly what they want.

[James O'Brien]

(......) Title my ass post says it enough

Im at a loss here. First our govt. cant get enough money (read taxes out the ass) then it blames a corporation for playing a game? Um....i may be drunk and sounding like an idiot but WTF? I personally (as an American Citizen (still looking for a sponsor to get me into the UK, if only for the good beer :) )) support Google in this endeavor, cause without them who knows how low the bids might have been. I mean shit knowing Verizon and AT&T this could have been locked as theirs (granted Verizon has the whole open thing going on right now, so kudos to them) But damnit, people wonder why I dont vote. Bush is an idiot and shouldnt have been elected to clean the john let alone Pres.

I hate this country sometimes.

/mines the orange jumpsuit with "Guantanamo" on the back. (I'll miss you all)

P.s. Reg I know swearing is a means to not be posted but damnit someone has to when you have an idiot like this in the White House. (not the hooker club either :) )

[James O'Brien]

@SELF

I need to stop posting comments when im hammered

/mines the one with the handcuf KJHKSAJDIIN WESKKJHD HELP ME KHJASDLKJHFDIOUSDK<WSMEBNR@#$Z%^Z^^@

[yeah, right.]

Also...

when I bid at an auction, I tend to first sent a maximum price I'm willing to pay before I go in. Otherwise, it might get really expensive for me. This was an auction. Google offered to pay a certain price. It was a real offer, with real money backing it, and they would have paid if they had won. Their offer was trumped. They elected to not pay more... that's how an auction works. That's how ALL auctions work.

Did these idiots leave their brains behind when they were elected, or are they just corrupt little sock puppets for Verizon? Has to be one or the other.

[Spleen]

Not surprising

On the rare occasions when an individual benefits from state incompetence, the state always blames the individual. See child tax credit clawback, whining about tax avoidance, etc.

[Anonymous Coward]

Doing no Evil...

Personally, I think that Google did a damned good thing with this.

The likes of Verizon and AT&T would never of opened up the spectrum, otherwise.

Shame it required Google to fix this problem by gaming the system - The FCC should have simply mandated it from the beginning irrespective of the price paid.

[Anonymous Coward]

Businessmen will be businessmen

Not so much a suprising result, since who would want to foot the bill of rolling out this new network architecture? Well, so far Verizon and AT&T proved they were willing to take the workload (hardly unsuprising, since they are in the business already).

If Google were to take the plunge and accept the responsibility of working in this area, then it would be a cost that far exceeds the initial bid price. In fact it would probably lead to them piggybacking off of another providers services (enter AT&T and Verizon?).

So the result is that Google ensured open access, without having to pay the cost of deployment (+Google) and Verizon got the ownership of the airwaves, enhancing their already wide coverage and network infrastructure (+Verizon).

Seems the only people that feel left out are the government (no additional business costs to attribute to Google) and AT&T (do they really want control of this spectrum anyway?).

I guess it comes down to whether or not Verizon are in the best position to afford the rollout cost. Obviously they are (hah?), otherwise they wouldn't have bid.

[Nick Drew]

So...

They're miffed that Google bid up the price beyond the $4.6bn trigger point, rather than letting the other bidders win it more cheaply? Methinks they're getting greedy, presumably thinking that if Google had played 'for real', they might have won even more money? And did they make any mention of the potential for getting around the full C-Block auction by bidding for separate areas of the country (as explained in another Reg article)?

Oh, and finally, what tf is an 'entree'? I presume they meant 'entrant', unless they're going all laa-di-daa in their spelling... Frickin Americanglish.

[Ginger]

Google running a network

Without the open access clause on the C-Block Google would have had to have outbid Verizon for its model to work, and would then have realised the cost of running a network and some of the justifications for the closed access models that are in place across the world.

Paris, because she's just dumb enough to think that mobile networks run themselves for free.

[Greg]

Half of the above comments are plain stupid

can you please all stop criticizing wrongly for no other reason than feeling clever?

Half of the comments above are basically "why are they upset of what happened? they got what they should have expected".

Yeah, they did. And?

Why wouldn't they be upset?

They're right to be upset. They put rules, didn't understand what would happen, and it did happen. they're upset. Normal.

That's not to say they're criticizing google (quite the opposite, the article cites the guy saying the contrary), but they're upset by their own lack of clairvoyance.

But I guess it feels really good posting here something along "morons, they should realize it's their fault". Trouble is, they do realize it, article is quite clear about that fact.

This was completely aside any opinion I might have on the actual process

[Anonymous Coward]

Don't they follow standard practice here?

It's called role-playing. When deciding if rules are a good idea you imagine you're the interested parties and ask what these rules mean to you. Then it becomes obvious what that cause means to Google.

[Shabble]

The system doesn't work

The US government seems to want it both ways - on the one hand they want to let the markets regulate themselves... but on the other hand they want to favour certain companies over others and impose poorly thought out restrictions on certain areas of certain industries.

Either Google is a big company that has been allowed to mess up the system because US government is too weak to regulate properly, or the the US government was hoping to deny the companies the ability to supply the consumer with the best services. Neither scenario is ideal!

For a capitalist economy to work properly we need a system that ensures fair treatment for all corporations (to prevent monopolies and encourage competition) and a minimum level of protection for the consumer (to prevent price-fixing cartels, restriction of service provision etc). It seems like the US currently fails on both counts.

[yeah, right.]

@Bracken

I think it's a job requirement to leave thought and ethics behind when becoming an American (or, for that matter, any other country) politician. Must be in a manual somewhere they're given when they get their first campaign contribution.

I wonder how much Verizon paid these puppets to start rattling cages in their attempt to have the "open spectrum" portion of the auction ruled invalid?

[Anonymous Coward]

The Telcos are pissed

Haha, the telcos are upset because they got caught flat footed and their lobbyists are complaining to their staff...er, I mean the lawmakers.

There are some things I don't agree with FCC Chairman Martin, but this time I agree with what he said.

[dervheid]

so, Greg...

do you HAVE an opinion you wish to share with the rest of us

Or are you just here to WHINGE about ours?

[Greg]

@dervheid

"do you HAVE an opinion you wish to share with the rest of us"

Actually I do. But does it really matter? Most posts above don't state any opinion either, they just say "they should have known those morons" (which is true but is hardly an interesting point).

I feel the congressmen who are wondering if they got gamed are wrong. They in fact did not get gamed (though it seems they've forgotten why they did this in the first place).

Congress is there to ensure the auctionning of a public ressource benefits the pubilc.

For that, it can bring money to government, or it can pave the way for nice applications that will make everyone happier, or it can do both.

Congress recognized that open access was A Good Thing for the society and that's why they required it as a clause for the auction.

They also recognized that the value of the block was lower with this clause since it would make it harder for a would-be monopoly to deep-fuck the customers, hence that would-be monopoly would be willing to pay less for a lesser privilege. And paying less is A Bad Thing.

Thus, they pondered both sides, and ended up saying that if they could still get at least 4.6 billion, they would get lots of money AND open access, and that would be better on both points.

And it worked exactly as they hoped: they got the money they wanted to ensure as well as the open access. It's good for the country for both reasons.

So in the end, the point, for me, is not "should they be upset if they didn't see it coming?", but rather "how can they have already forgotten that they got not only what they deserved, but also what they in fact conscisouly and cleverly asked for?".

I simply guess that those who are upset are not those who were at the origin of the clause, and they hadn't understood the original, now fulfilled, intent.

[Anonymous Coward]

@"prevailed in the C Blcok"

Cute, but I liked the bit about how Google could have

" ... become a new entree. ... "

Presumably that means they could have been served on a large plate surrounded by a thin drizzle of sauce just before the main course?

[dervheid]

Dear Greg (2)

Opinion;

a personal view, attitude, or appraisal. (one defenition)

I do believe that, in fact, the majority of these posts contain the "opinion" of the individual making said post.

I do agree, also, with most of your 'opinion' on the subject, and with the varied inputs suggesting that the 'victorious' parties in the auction are now rather pissed at the prospect of having to go with the open access, and would like to see that clause withdrawn. Whether or not that happens, only time will tell, but I believe that if the maxim "money talks" is appled here, it's voice will be VERY LOUD!

On the other hand, being a Brit, this really has no direct bearing on me, but it seems to be yet another possible indicator of how powerful the telco's may have become (I'm thinking of the current BT/Phorm 'tests' going uninvestigated here.)

If you're lucky, and I DO MEAN LUCKY, your legislators will develop the balls to tell the whingers where to go, but I wouldn't hold my breath if I were you.

BTW, one n in "auctioning", one s in "resource"

[Anonymous Coward]

Cliff Sterns...

... You have been added to my list of evil assholes fucking up America.

[Anonymous Coward]

opinions

opinions are like poopholes - everyone has one and everyone elses stinks (your own being too far away to smell - bar some terrible affliction.)

My opinion? O well - that's life.

Although having a "If the price reaches blah then we'll make it open" was pretty retarded. I mean... it's an auction for god sake.

That's like saying "You may bid on this crate of beer, but if you pay more then ten pounds then you must share your beer!" Ehhh if I pay more for my beer I must share it? What the hell kind of rule is that damn it!

Now if it was "If you pay less then five pounds you must share the beer" then it would make sense... although it all seems rather stupid - they should have said that either a: it has to be open regardless or b: you can do what you like with it - we don't care.

[Eride]

Isn't the Government supposed to...

Look out for the needs of its citizens? Google may of gamed the system but they did it to society's benefit. If anyone should be looked at with scorn it should be the very politicians responsible for the system that requires a company like Google to play the system to do what is necessary.

[Edward Pearson]

Re: Sneaky Bastards

Some questions get asked, a few backs get scratched, and all of a sudden it's ruled that google's bid was illegal and open access disappears in a PUFF of smoke.

Thats the American way.