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- 01-09-2008, 05:15 PM #31Mark McIntyreGuest
Re: NEWS: Frontline Wireless bombs out
John Navas wrote:
>
> Nonsense. You're beating a dead horse.
So tell us, does the process you propose work in practice? Did it work
last time? Has it ever worked? By worked I mean to the public benefit.
I invite you again to look at the UK's 3G auctions.
› See More: NEWS: Frontline Wireless bombs out
- 01-09-2008, 05:17 PM #32Mark McIntyreGuest
Re: NEWS: Frontline Wireless bombs out
Dennis Ferguson wrote:
> Mark McIntyre <[email protected]> wrote:
>> John Navas wrote:
>>> Not so:
>>> * Auctioning spectrum ensures the most efficient use of that spectrum.
>> Not really - the 3G auction in the UK is a case in point. The spectrum
>> is sitting empty, and likely to remain so, because nobody was interested
>> in buying the overpriced services the auction "winners" wanted to sell....
>
> That's not right. Not only do at least 4 of the 5 wireless operators
> in the UK now provide 3G services (and one of those operators, Three, only
> has 3G spectrum)
I'm not sure the industry agrees with you. 3G is widely regarded as a
niche market, certainly not work the several billions that were paid for
it.
- 01-09-2008, 06:29 PM #33John NavasGuest
Re: NEWS: Frontline Wireless bombs out
On Wed, 09 Jan 2008 23:13:19 +0000, Mark McIntyre
<[email protected]> wrote in
<[email protected]>:
>John Navas wrote:
>> On Wed, 09 Jan 2008 16:30:18 +0000, Larry <[email protected]> wrote in
>> <[email protected]>:
>>
>>> Aaron Leonard <[email protected]> wrote in
>>> news:[email protected]:
>>>
>>>> You lost me at "Illuminati".
>>
>>> You need to come out from under that rock more often.
>>
>> That we don't have government of real "illuminati" is precisely the
>> reason for getting government out of the way as much as possible.
>
>That's a neocon argument. That you don't have a govt of real illuminati
>is precisely the reason for getting better advisers, not leaving it up
>to a host of vested commercial interests.
It's actually a free market economics argument, backed by a great deal
of confirming evidence.
>On the one hand you don't want dumb-as-bricks politicans making the
>decision based on campaign funds contributions and misunderstood
>articles in the Times, on the other hand you don't want sharp-as-pins
>capitalists making the decision based on how much cash they can winkle
>out of the dumb public before the bubble bursts.
I actually do want companies to be motivated by profit instead of by
regulation.
--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>
- 01-09-2008, 06:31 PM #34John NavasGuest
Re: NEWS: Frontline Wireless bombs out
On Wed, 09 Jan 2008 23:14:31 +0000, Mark McIntyre
<[email protected]> wrote in
<[email protected]>:
>John Navas wrote:
>> On Wed, 09 Jan 2008 13:37:37 -0500, News <[email protected]> wrote in
>> <[email protected]>:
>>
>>> Mark McIntyre wrote:
>>>
>>>> The reality is that the upfront cash rule
>>>> sets a barrier to participation and allows those who /are/ in to pay
>>>> less as there's less competition.
>>
>>> While making it appear to conform to institutional "free market" policy.
>>
>> In fact it does conform to free market economics.
>
>By placing a barrier to free engagement on equal terms?
By inhibiting abuse of the system.
The terms are in fact equal. Anyone is free to raise as much capital as
they can justify.
Trying to correct for financial differences would be meddling in the
market.
--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>
- 01-09-2008, 06:32 PM #35John NavasGuest
Re: NEWS: Frontline Wireless bombs out
On Wed, 09 Jan 2008 23:15:56 +0000, Mark McIntyre
<[email protected]> wrote in
<[email protected]>:
>John Navas wrote:
>>
>> Nonsense. You're beating a dead horse.
>
>So tell us, does the process you propose work in practice? Did it work
>last time? Has it ever worked? By worked I mean to the public benefit.
Spectrum actions have a good track record, a major reason their use has
been continued and expanded.
>I invite you again to look at the UK's 3G auctions.
They worked quite well, some buyers remorse notwithstanding.
--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>
- 01-09-2008, 06:34 PM #36John NavasGuest
Re: NEWS: Frontline Wireless bombs out
On Wed, 09 Jan 2008 23:17:29 +0000, Mark McIntyre
<[email protected]> wrote in
<[email protected]>:
>Dennis Ferguson wrote:
>> Mark McIntyre <[email protected]> wrote:
>>> John Navas wrote:
>>>> Not so:
>>>> * Auctioning spectrum ensures the most efficient use of that spectrum.
>>> Not really - the 3G auction in the UK is a case in point. The spectrum
>>> is sitting empty, and likely to remain so, because nobody was interested
>>> in buying the overpriced services the auction "winners" wanted to sell....
>>
>> That's not right. Not only do at least 4 of the 5 wireless operators
>> in the UK now provide 3G services (and one of those operators, Three, only
>> has 3G spectrum)
>
>I'm not sure the industry agrees with you. 3G is widely regarded as a
>niche market, certainly not work the several billions that were paid for
>it.
My own take is just the opposite. Otherwise they'd be shedding their 3G
spectrum instead of promoting it heavily.
--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>
- 01-09-2008, 06:41 PM #37NewsGuest
Re: NEWS: Frontline Wireless bombs out
John Navas wrote:
> On Wed, 09 Jan 2008 23:14:31 +0000, Mark McIntyre
> <[email protected]> wrote in
> <[email protected]>:
>
>
>>John Navas wrote:
>>
>>>On Wed, 09 Jan 2008 13:37:37 -0500, News <[email protected]> wrote in
>>><[email protected]>:
>>>
>>>
>>>>Mark McIntyre wrote:
>>>>
>>>>
>>>>>The reality is that the upfront cash rule
>>>>>sets a barrier to participation and allows those who /are/ in to pay
>>>>>less as there's less competition.
>>>
>>>>While making it appear to conform to institutional "free market" policy.
>>>
>>>In fact it does conform to free market economics.
>>
>>By placing a barrier to free engagement on equal terms?
>
>
> By inhibiting abuse of the system.
>
> The terms are in fact equal. Anyone is free to raise as much capital as
> they can justify.
Up front; show your bankroll.
No mid-auction teaming to maximize the public's take.
Decidely sub-optimal.
- 01-09-2008, 06:51 PM #38GeorgeGuest
Re: NEWS: Frontline Wireless bombs out
John Navas wrote:
> On Wed, 09 Jan 2008 14:22:10 -0500, George <[email protected]> wrote
> in <[email protected]>:
>
>> Cubit wrote:
>>> Spectrum is infrastructure. It should not be taxed.
>>>
>>> That having been said, I don't have a scheme for fair allocation.
>>>
>> Why not a lottery?
>
> Because it would fail to ensure the highest value use of a limited
> resource. You could easily have some idiot win that wanted to run
> wide-band morse code.
>
So whats the problem? If they did the market forces would put them out
of business if they made such a choice just the same as if someone
"purchased" the spectrum and chose to run wide-band Morse code.
>> Lets say we put a system in place where only responsible bidders can
>> apply. This would be very similar to what is used for large construction
>> projects where the concept of responsible bidders is used. In order to
>> bid on a large project a contractor must show they have experience and
>> resources.
>
> You must not have much experience in construction -- that kind of
> government involvement is rife with abuse, waste, and outright fraud.
> No thanks.
I have, I didn't say it should be run like a construction job but only
taking the concept of responsible bidder.
>
>> The winner would not be required to "buy" the spectrum which is really
>> just a disguised pre-paid tax on its future users but only a nominal
>> application fee to cover the cost of the lottery.
>
> A one-time license fee is not a tax.
>
Sure it is, it is just a matter of semantics. If the government "sells"
spectrum it gets a prepaid lump sum that can only be recovered by the
successful bidder by charging a recurring incrementally higher fee for
their service. If it quacks like a duck...
- 01-09-2008, 09:42 PM #39John NavasGuest
Re: NEWS: Frontline Wireless bombs out
On Wed, 09 Jan 2008 19:51:39 -0500, George <[email protected]> wrote
in <[email protected]>:
>John Navas wrote:
>> Because it would fail to ensure the highest value use of a limited
>> resource. You could easily have some idiot win that wanted to run
>> wide-band morse code.
>
>So whats the problem? If they did the market forces would put them out
>of business if they made such a choice just the same as if someone
>"purchased" the spectrum and chose to run wide-band Morse code.
The spectrum might still be locked up. Makes no sense.
>> You must not have much experience in construction -- that kind of
>> government involvement is rife with abuse, waste, and outright fraud.
>> No thanks.
>
>I have, I didn't say it should be run like a construction job but only
>taking the concept of responsible bidder.
Same problem.
>> A one-time license fee is not a tax.
>>
>Sure it is, ...
We'll just have to agree to disagree.
--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>
- 01-10-2008, 05:32 AM #40NewsGuest
Re: NEWS: Frontline Wireless bombs out
John Navas wrote:
> On Wed, 09 Jan 2008 19:51:39 -0500, George <[email protected]> wrote
> in <[email protected]>:
>
>
>>John Navas wrote:
>
>
>>>Because it would fail to ensure the highest value use of a limited
>>>resource. You could easily have some idiot win that wanted to run
>>>wide-band morse code.
>>
>>So whats the problem? If they did the market forces would put them out
>>of business if they made such a choice just the same as if someone
>>"purchased" the spectrum and chose to run wide-band Morse code.
>
>
> The spectrum might still be locked up. Makes no sense.
>
>
>>>You must not have much experience in construction -- that kind of
>>>government involvement is rife with abuse, waste, and outright fraud.
>>>No thanks.
>>
>>I have, I didn't say it should be run like a construction job but only
>>taking the concept of responsible bidder.
>
>
> Same problem.
>
>
>>>A one-time license fee is not a tax.
>>>
>>
>>Sure it is, ...
>
>
> We'll just have to agree to disagree.
>
In other words, George is right.
- 01-10-2008, 08:59 AM #41John NavasGuest
Re: NEWS: Frontline Wireless bombs out
On Thu, 10 Jan 2008 06:32:01 -0500, News <[email protected]> wrote in
<[email protected]>:
>John Navas wrote:
>> We'll just have to agree to disagree.
>
>In other words, George is right.
Is that the best you can do? How childish.
--
Best regards,
John Navas <http:/navasgroup.com>
"A little learning is a dangerous thing." [Alexander Pope]
"It is better to sit in silence and appear ignorant,
than to open your mouth and remove all doubt." [Mark Twain]
"Being ignorant is not so much a shame, as being unwilling to learn."
[Benjamin Franklin]
- 01-10-2008, 01:46 PM #42Dennis FergusonGuest
Re: NEWS: Frontline Wireless bombs out
On 2008-01-09, George <[email protected]> wrote:
> Cubit wrote:
>> Spectrum is infrastructure. It should not be taxed.
>>
>> That having been said, I don't have a scheme for fair allocation.
>>
>>
> Why not a lottery?
>
> Lets say we put a system in place where only responsible bidders can
> apply. This would be very similar to what is used for large construction
> projects where the concept of responsible bidders is used. In order to
> bid on a large project a contractor must show they have experience and
> resources.
>
> The same could be done here. Prospective operators would need to meet
> qualifications to enter a lottery run by a disinterested third party.
>
> The winner would not be required to "buy" the spectrum which is really
> just a disguised pre-paid tax on its future users but only a nominal
> application fee to cover the cost of the lottery.
If you mean by the last sentence that making companies pay for their
spectrum allocation will increase prices for their customers, then
have you noticed how much cheaper the US cellular operators, who
got their spectrum for free, are compared to the PCS operators who
had to pay for it? No? This is, of course, because no matter how
much the original spectrum cost the prices charged to customers by
the operators will always eventually be those that maximize the
operator's income, i.e. as much as the market will bear. The operator
won't invest in spectrum or other assets if he doesn't think he
can get a return on that investment but in the end the return he
gets will be determined by how much customers are willing to pay
for the service the operator builds, not by how much the operator
invested building it. It is up to the operator to manage this
risk.
It is a fact, however, that a lot of the US 800 MHz cellular
spectrum is not controlled by the same company to which it was originally
allocated. Most of these blocks have changed owners through mergers
or acquisitions. Some blocks have changed owners several times.
Each of those mergers and acquisitions involved an exchange of money,
or equity, which put a market value on the assets of the company involved.
One of those assets is, of course, the company's spectrum licenses, without
which a wireless company would have little or no value at all. So when
Verizon acquired GTE, or Cingular acquired AT&T Wireless, we don't find
it surprising at all that they spent a considerable amount of money to
acquire the spectrum assets. In fact the thing we would find very
surprising is if GTE or AT&T Wireless instead offered to give away their
spectrum licenses for free to avoid "taxing" Verizon's and Cingular's
future users. Those spectrum licenses are valuable; if you are smart
enough, owning them can allow you to make money, so you'll pay to
own one and want to be paid to transfer ownership of one you already
own.
So seeing as spectrum is traded at market prices all the time, why
would you want the first transfer, from the government to a company,
to be at anything other than a market price? No matter what the
first price is, all subsequent transfers of ownership of the spectrum
will be at market price anyway, so if the first owner pays less than
market price for the spectrum you'll just be giving that first owner
a benefit, for nothing, that they'll reap when they sell the spectrum
or make money by owning it. Giving the spectrum away, by lottery
or however, is essentially welfare for corporations, and while I'm
sometimes in favour of welfare for individual people who need it I
really don't think welfare for companies, no matter how worthy they
seem, is appropriate. If an operator who wants to enter the market
and build a network after the government allocations have been
made needs to pay full price to do so, I don't think it is fair
that those that happened to be there at the time of the government
allocations get a freebie (I also don't think it is a coincidence
that the two biggest, richest companies in the US wireless market
are, at their core, companies which received a considerable amount
of cellular spectrum from the government for nothing; it is hard
for later-comers, who need to pay for what they get, to compete
with free).
So while I don't mind placing all the regulations and conditions of
use of spectrum you think might be good for consumers up front, so
they can be factored into the price, I think the first sale of
spectrum still needs to be made at market prices just like all subsequent
sales of the same spectrum will be, to avoid giving companies a big
benefit just because they happened to be there first. The only problem
is how to determine what the "market price" for the spectrum should be,
and that is what a well designed auction is supposed to do. If companies
pay too much for spectrum at the auction compared to what their customers
are willing to pay for services which use the spectrum (the complaint
I'm hearing about the UK) that isn't a failure of the auction but
rather a failure of the business judgement of the participants. Businesses
take risks, these are the same risks that companies who enter the market
later by buying existing licenses take, and I don't think the
government should be protecting those who happen to be at the
original auction from the risks that later arrivals in the same
market will need to take. I think auctions are necessary for
fairness, while "free" is inherently unfair to everyone (consumers,
taxpayers, competitors) other than the companies which get the
freebie.
Dennis Ferguson
- 01-10-2008, 03:22 PM #43John NavasGuest
Re: NEWS: Frontline Wireless bombs out
On Thu, 10 Jan 2008 19:46:10 GMT, Dennis Ferguson
<[email protected]> wrote in
<[email protected]>:
>On 2008-01-09, George <[email protected]> wrote:
>> The winner would not be required to "buy" the spectrum which is really
>> just a disguised pre-paid tax on its future users but only a nominal
>> application fee to cover the cost of the lottery.
>
>If you mean by the last sentence that making companies pay for their
>spectrum allocation will increase prices for their customers, then
>have you noticed how much cheaper the US cellular operators, who
>got their spectrum for free, are compared to the PCS operators who
>had to pay for it? No? This is, of course, because no matter how
>much the original spectrum cost the prices charged to customers by
>the operators will always eventually be those that maximize the
>operator's income, i.e. as much as the market will bear. ...
You were fine up to the "i.e." (and in much of the rest of the material
I snipped), but economics research shows that profit maximizing in a
competitive market actually causes prices to fall towards marginal cost,
as can be clearly seen in the actual history of prices for mobile
telephone service. Raising prices to increase margin is more than
offset by reduced volume as customers turn to substitutes. In addition,
up front costs are _investment_, which tends to actually appreciate
given the scarcity of spectrum, not the operating _expense_ reflected in
prices.
--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>
- 01-10-2008, 05:50 PM #44Mark McIntyreGuest
Re: NEWS: Frontline Wireless bombs out
John Navas wrote:
> On Wed, 09 Jan 2008 23:13:19 +0000, Mark McIntyre
> <[email protected]> wrote in
> <[email protected]>:
>
>> That's a neocon argument.
>
> It's actually a free market economics argument,
That's what I said. And I notice you ignored my point about this being
why governments need to have better advisers.
> backed by a great deal of confirming evidence.
Horse's gonads. Luckily however this isn't alt.politics.flames so I
really can't be bothered to discuss why "free market economy" is an
oxymoron, especially in the US. Do feel free to read up on GATT,
tarrifs, the WTO and Antigua sometime though.
> I actually do want companies to be motivated by profit instead of by
> regulation.
Right - so you agree you want companies to be motivated by how much
money they can make out of us, not by whether the public good is served
and whether society benefits. Capitalism at work again. For some
definitions of work.
- 01-10-2008, 05:53 PM #45Mark McIntyreGuest
Re: NEWS: Frontline Wireless bombs out
John Navas wrote:
> On Wed, 09 Jan 2008 23:14:31 +0000, Mark McIntyre
> <[email protected]> wrote in
> <[email protected]>:
>> By placing a barrier to free engagement on equal terms?
>
> By inhibiting abuse of the system.
Weasel words. By placing the barrier in place, the market is skewed in
favour of those who can afford to lose the fee.
> The terms are in fact equal. Anyone is free to raise as much capital as
> they can justify.
Classic captalism - everyone is free to dine at the castle, all they
have to do is raise enough cash to buy a suit of armour and horse.
> Trying to correct for financial differences would be meddling in the
> market.
Which is what is being done by placing a barrier to entry.
I'm wondering if you understand much about market theory?
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