Tales of the Sausage Factory

Chutzpah, Thy Name Is Wireless Incumbent.

So here we are in the middle of the most intensely competitive auction ever. As you can tell looking at the recent postings by fellow Wetmachiner Greg Rose this auction has dramatically pushed up the amount of money paid by bidders for licenses and has created more intense competition for a broader group of licenses than previous auctions, strongly suggesting that — as Greg and I predicted when we first started pushing anonymous bidding in March 2006 — anonymous bidding eliminates all kinds of targeting, collusion and retaliation that typically held back smaller bidders and allowed larger bidders to pick up licenses for a song. An utter smashing success (at least from the perspective of those who favor using auctions for distribution of licenses), right? Who could have a bad word to say about it?

Answer: All the people who hate anonymous bidding BECAUSE it eliminates the ability to signal, retaliate, and collude and thus makes the auction more competitive. i.e. The incumbent wireless licensees (other than Verizon, which wanted anonymous bidding to avoid being targeted).

More below . . . .

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Tales of the Sausage Factory

FCC Last Call Part II: Cyren Call Sings Again

They should have named the damn thing Phoenix Call, given how often this idea keeps getting resurected. OTOH, it better suits the nature of the beast to name it for creatures whose enticing song lured sailors to their deaths than for one of my favorite characters in Harry Potter.

As I wrote before on the Public Knowledge Blog, Cyren Call wants the FCC to give it 30 MHz of spectrum for free from the returned broadcast analog spectrum set aside for auction. Technically, Cyren Call wants that 30 MHz allocated to a “Public Safety Trust” that would then partner with a private sector organization, but it amounts to the same thing. In exchange, Cyren Call promises to build a nifty national broadband network that would be available to public safety entities when they need it. In order to finance the network without raising taxes or imposing costs on the public safety community, Cyren Call would operate the remaining 99.999% of capacity as a commercial venture. What a bargain! Of course, Cyren Call would kep any profit over and above actual expenses, to give it incentive to run the network “efficiently.”

I wish I did so well from doing good.

You would think that when public safety entities would get suspicious of a proposal that sounds horribly like: “DEAR PUBLIC SAFETY ENTITY. I OFFERING TO YOU MANY MEGAHURTS OF SPECTRUM. CONGRESS RECENTLY PASSED A LAW TO MAKE SPECTRUM AVAILABLE TO COMMERCIAL SECTOR, BUT I THINK YOU SHOULD HAVE IT.” But while Cyren Call has encountered the harsh response from the incumbent wireless harpies, over 1300 “HONEST TRUSTWORTHY PUBLIC SAFETY ENTITY” commentors supported the Cyren Call proposal. Unsurprisingly, most supporting comments from public safety folks emphasized that the part of the proposal they really, really liked was the part about getting even more spectrum.

But Kevin Martin, who seems to be having a “celebrate the incumbent telco harpy” meeting this month, has thrown in an interesting apple of discord. The FCC proposes to create a system similar to Cyren Call, but on the 24 MHz already assigned to public safety rather than grabbing yet more spectrum (you can read the full Order here. In other words, the FCC seems to be saying to the public safety community “O.K., so do you all think this proposal is so wonderful when it doesn’t bring you another 30 MHz of prime spectrum?” Of course, it helps that this plan parallels a plan proposed by Verizon Wireless back in September, which is remarkably simlar to the Cyren Call plan but in the spectrum already allocated to public safety and inserting the words “Verizon Wireless” in every place you had the words “Cyren Call.”

More below . . . .

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Tales of the Sausage Factory

Appears that Rose and Lloyd (and me) were right . . .

A month or so back, I reported that Greg Rose and Mark Lloyd had written a study for the Center for American Progress concluding that incumbent wireless providers used spectrum auctions to block the mergence of new competitors. Then came the AWS auction, with its legion of bidders. “A ha!” Declared the Wall St. Journal and others in the anti-net neutrality, anti-regulatory, pro-spectrum property camp. “Look at how the market-based policies create competition! No need for regulation here!”

Turns out, not so much . . . . Either for new spectrum entrants or for broadband competition.

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Tales of the Sausage Factory

The GAO Makes the Case for Community Broadband

Not that you would know it either from the headline or the general coverage, but the the Government Accountability Office, Congress’ investigative arm, issued its own report that makes a strong case in favor of community-based broadband and against more regulatory goodies for the incumbent telcos and cable cos. Not that the GOA intended to make that case, and they word their conclusions carefully. But dig down into the actual report and you find a lot of good stuff beyond discrediting the FCC’s rosy numbers on broadband penetration and competition.

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Tales of the Sausage Factory

Anonymous bidding and not so anonymous shakedowns at the FCC

Say what you like about Martin in other areas, but he is (so far) sticking to his guns on whether to require anonymous bidding for the upcomming AWS spectrum auction. MAP has actively supported this proposal, because it will make the auctions work better and facilitate entry by minority owned businesses and new, disruptive competitors (I’m stuck with them by statute, so I may as well try to get them to work right).

In perhaps the most telling evidence that anonymous/blind/sealed bidding (in which the identity of the bidder is not disclosed during the action) is a good idea, every incumbent (except VZ Wireless, which has been “targeted” in certain auctions) is lobbying fiercly against it. My favorite little tidbits of when the Sausage Factory turns nasty below.

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