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FCC Pulls Back On Free Broadband Auction

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oh dear oh dear

fracturedpsyche

Jun 6, 2008, 11:19 PM
now some lucky company doesn't get to offer free service to the customers! it doesn't surprise me that the FCC (read: unnecessary governement interference) expects FOR PROFIT companies to give away free service to consumers, but if any of the companies i invest do, to be sure i'll take my money elseware. i would be appalled by the idea, if i thought that any company with the resources to make this work would be dumb enough to gor for it. i mena, is nobody paying atteniton to the number of municipal wi-fi's that are being shut down? heres a little hint: TAX PAYERS ARE TIRED OF PAYING FOR THIS KIND OF NONSENSE!
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maokh

Jun 6, 2008, 11:24 PM
25MHz is enough for jack squat AND they have to give it away AND buy $N million/billion worth of spectrum AND deploy a massive network with an eventual 95% footprint.

If this actually fruits into a real sale, i smell another freeinternet.com / netzero.com and subsequent failure of said business model.

I wonder if any of those domains are for sale? 🤣 someone could get a head start already.
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fracturedpsyche

Jun 6, 2008, 11:33 PM
🤣
hilarious. and for the very bright ones who feel compelled to point out the success of google as a free service, i'd like to suggest that wireless users generally avoid ad-based content like it's the plague. oh wait that would be most consumers. and google really is a little (a lot!) different than good old broadcast television and FM radio, both of which make money mostly from advertising revenue. for example, companies pay google to place their info in the top results of a search for xyz. hence, people are not putting up with advertising to use the product, like television.
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AlltelHub

Jun 7, 2008, 10:43 AM
being on cellphones, website search tools and such. It didn't hurt them when they went public either. I would wager that their ad revenues are dwarfed next to their royalty revenues. The Android is coming...
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nextel18

Jun 7, 2008, 4:24 PM
It is actually a good idea but no one commented on it because they are dealing with the purchases as well as other operational events. When they will talk about it again, shortly, I am sure there would be opportunities that are more interesting. “...expects FOR PROFIT companies to give away free service to consumers” Google. That is all I have to say.
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algorithmplus

Jun 8, 2008, 12:03 PM
But Google isn't the same. Google didn't have to build thousands upon thousands of wireless towers and distribute wireless equipment to make their wireless towers, which cover 95% of the population, usable. No for profit company currently has built a network that covers 95% of the U.S. population, so why would a new for profit company that won't carry pornography build that in such short a time without collecting revenue from consumers?

My guess is that year or so into it, they would say the idea isn't profitable and sell out to a company they had chosen even before the auction.
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nextel18

Jun 8, 2008, 7:55 PM
Well they didn’t have to built out thousands of towers and other related to the telecom industry, however, they had to built code from scratch, infrastructure for their network, and search related technologies which all have patents on them. check out how much they spend on R&D, TAC, and capital expenditures. They have a 70 20 10 policy where 30% or so goes to R&D. TAC they usually spend $500m per quarter and capital expenditures usually $600m per quarter. check out recently for TAC they spent, for the last quarter they reported, $1.49B, and capex they spent $840m. Therefore, it might be different industries of course but they all spend a lot of money on their networks, infrastructure and other costs.
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fracturedpsyche

Jun 8, 2008, 10:00 PM
but the point is that this model of free internet service doesn't work for for-profit companies. again, look at all the municipal wi-fi systems that are being shut down. the only free internet offerings that work are for comapnies like Panera Bread where the customers use the wifi and buy coffee or something. but the customer has to come into their store to use it.
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algorithmplus

Jun 8, 2008, 10:03 PM
fracturedpsyche said:
but the point is that this model of free internet service doesn't work for for-profit companies. again, look at all the municipal wi-fi systems that are being shut down. the only free internet offerings that work are for comapnies like Panera Bread where the customers use the wifi and buy coffee or something. but the customer has to come into their store to use it.

But it's actually not free, as Panera Bread absorbs the cost of the internet. It's free to Panera's consumer, but it's not free to Panera.
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fracturedpsyche

Jun 8, 2008, 10:10 PM
Rightly said.
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crood

Jun 9, 2008, 10:54 AM
More accurately, it's built into the price of their products. The customer still pays for the access when they buy a sandwich.
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algorithmplus

Jun 9, 2008, 5:58 PM
That's a better way of putting it. The Panera customer doesn't pay for the service directly based on price.
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nextel18

Jun 9, 2008, 6:06 PM
Doesn’t matter how it’s paid because consumers would buy the food and beverages so if they indirectly pay for it then so be it but they are using a number of ways to not charge Wi-Fi to others. Starbucks and Google are both having Wi-Fi. In Boston, we have free Wi-Fi also. so again, if they pay for it any other way like buying foods or beverages anyway then so be it because people are hungry or thirsty and if they get that free internet as an extra functionality then that’s what they are going to do. so they are going in there not for the free Wi-Fi so much as for the food, goods or beverages.
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nextel18

Jun 8, 2008, 10:16 PM
I did not say that it would work but it can be done. Google is doing it in their HQ with free Wi-Fi. A few other companies like juno and NetZero at some point charged a few dollars sometimes it was free for a certain amount of usage because they were using advertising to pay for it. also this other company I forgot their name asked the FCC if they can do the same but the FCC declined due to some other reason. Therefore, it can be done, but the business model would probably fail unless there was a decent pricing structure or term over the 10 years.
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algorithmplus

Jun 8, 2008, 10:01 PM
It's definitely not the same. Google could access the internet, and with the bandwidth they had, have instant access to millions and millions of users. Said company would not. I would hate to think of how much advertising would be required to provide free wireless broadband internet access to, statistically speaking, the entire U.S. Population. Unless it's limited to a few megabytes or minutes per month with the rest a paid service.
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nextel18

Jun 8, 2008, 10:18 PM
It still can be done, but it would probably fail. Advertising is a big business so if you can attach it to many business models you will do well.
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algorithmplus

Jun 9, 2008, 6:00 PM
nextel18 said:
It still can be done, but it would probably fail. Advertising is a big business so if you can attach it to many business models you will do well.

I think the correct term is "may" do well. There is no guarantee that by attaching advertising to something your business will automatically succeed.
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nextel18

Jun 9, 2008, 6:03 PM
Well check out the companies that use advertising for business. Google, Yahoo etc.. they are all doing well. Other companies are starting to incorporate advertising in their business model to allow for lower in pricing.


Of course, any business model might fail but with advertising, it is too easy to make a lot of money in however they have to execute.
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