All Things in Moderation

Morning Report

5 Responses

1. 

   markinaustin, on February 17, 2012 at 8:25 am said:

   It is not transparent to me from this article what exactly is happening. The article has at least one material misstatement in it, causing me to distrust the rest of the content.

   I am guessing that:

   1] unused tv bandwidth is being auctioned to the highest bidder. Q: are these “sales” or “leases”? Q: can Canadians bid? Chinese? Iranians?

   2] it is expected that the purchasers will implement more broadband and more accessibility to the public. Q: why more broadband – is that the highest and best use? Q: why more accessibility? Q: why would the various purchasers cooperate with each other about anything?

   3] some on both sides think this is a big potential job creator/growth stimulator.
   Q: why? Q: what would have to happen for this auction to lead to significant growth in the economy?

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2. 

   Kevin S. Willis, on February 17, 2012 at 8:47 am said:

   Mark: Broadband is the most versatile use of the spectrum, since it can be used to send and receive any kind of content. While any use of the spectrum would, at this point, be digital, making as much of it broadband as possible makes it much more flexible as to what it is used for, immediately and in the future. This flexibility makes the most economic and practical sense, to me.

   I don’t see how it would innately provide more accessibility. Accessibility is a matter of access points in most places where access is limited. Even in large metropolitan areas with crappy access, it’s because government regulation and the costs of clearing regulatory hurdles makes it difficult to add additional access points. Accessibility can be improved with more access points. Generally, we are still not terribly close to the point where we must have additional bandwidth for improve accessibility.

   Presumably, some of the bandwidth being auctioned could have much further reach, and improve accessibility in that manner—but it would still require the providing of access points within range, and I suspect existing FCC regulations regarding radio interference would prevent consumer devices from being able to successfully broadcast back to distant access points, even if technically possible. But I’m not technically savvy enough to be sure what the access range of available spectrum would be.

   As regards to job growth: I’m not sure, but I don’t think it can hurt. It’s better to get the bandwidth available in being used in the marketplace than not, so some job growth is likely just because it’s available. It’s like if we could wave a wand and double the size of the Interstate system. Since we waved a wand, construction didn’t add many jobs, but eventually a few extra gas stations and restaurants would pop up, just because it was there. But would it rapidly lead to profound job growth? I’m dubious. But it’s better that it be available as not, and an auction can raise good money. Companies with access to money—AT&T, Comcast, Apple, Google, etc—stand to benefit from owning a big chunk of broadcast spectrum. And they’ve got a lot of money. And they’d get something valuable for the money. Auctioning as soon as possible seems to be a win/win to me.

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   • 

     markinaustin, on February 17, 2012 at 8:55 am said:

     Thanks, Kevin. That all makes sense.

     If anyone has a clue about my other questions, please chip in. I am especially interested to know if we are selling term leases or rights in perpetuity, without reservation.

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     • 

       novahockey, on February 17, 2012 at 8:58 am said:

       I have a friend who works on spectrum issues at the FCC. I’ll send him an email and post what I hear back.

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3. 

   jnc4p, on February 17, 2012 at 9:12 am said:

   Good piece from Ezra Klein on why “evil” Wall Street is so good at recruiting top tier talent.

   “Column: How Wall Street takes advantage of the Ivy League’s failures
   Posted by Ezra Klein at 10:22 AM ET, 02/17/2012 ”
   …

   “The bigger draw, explained a recent Harvard graduate who majored in social science and went to Goldman Sachs for two years, is what Wall Street is selling to potential applicants.

   “It’s about squelching anxiety in general. It checks the job box. And it’s a low-risk opportunity. It’s a two-year program with a great salary and the promise to get these skills that should be able to transfer to a variety of other areas. The idea is that once you pass the test at Goldman, you can do anything. You learn Excel, you learn valuation, you learn how to survive intense hours and a high-pressure environment. So it seems like a good way to launch your career. That’s very appealing for those of us at Harvard who were not in pre-professional majors.”

   In other words, Wall Street is promising to give graduates the skills their university education didn’t. It’s providing a practical graduate school that pays students handsomely to attend. Sometimes, the enrollees end up liking their job in finance, or liking the lifestyle that it affords them, so they stick around. Sometimes, they don’t. Either way, Wall Street is filling a need that our educational system should be filling.

   So it seems universities have been looking at the problem backward. The issue isn’t that so many of their well-educated students want to go to Wall Street rather than make another sort of contribution. It’s that so many of their students end up feeling so poorly prepared that they go to Wall Street because they’re not sure what other contribution they can make.”

   http://www.washingtonpost.com/blogs/ezra-klein/post/column-how-wall-street-takes-advantage-of-the-ivy-leagues-failures/2011/08/25/gIQA7FTnJR_blog.html

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