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Proposed Spectrum Auction Could Net $36 Billion, Study Finds

Arik Hesseldahl — Tue, 15 Feb 2011 12:45:35 +0000

Last week President Obama outlined a plan to auction off a big swath of wireless spectrum currently in the hands of TV broadcasters for over-the-air programming that could be repurposed toward creating a national wireless broadband network. The president said the auctions would raise about $28 billion, which would be enough to cover the costs of the $19 billion network he’d like to build, with the remainder going toward deficit reduction.

Today the the CTIA, the wireless industry trade organization, got behind the president’s plan in a big way, and suggested that the proposed spectrum auctions could bring in billions of dollars more than the president said. Using data from 13 prior spectrum auctions as a model, the organization today released the findings of a study conducted in partnership with the Consumer Electronics Association saying that an auction of 120 MHz worth of spectrum could produce revenue in the range of $36 billion to $48 billion.

The study also found that only in the top 30 markets in the continental United States will TV stations actually have to exit certain spectrum ranges to clear up sufficient spectrum for wireless broadband. In most cases, TV broadcasters will probably be satisfied with incentive auctions that give them some portion of the proceeds raised from the auctions. In a few cases it will be trickier, and the study suggests a few options like channel-sharing and repacking. Broadcasters outside the top 30 markets should not have to give up any spectrum, the study says.

The point of the study, CTIA president Steve Largent told me, is to help nudge Congress toward passing a law that will allow the Federal Communications Commission to hold incentive auctions that can help spur TV broadcasters who currently have the licenses for the spectrum. So far, broadcasters have signaled that they’re not yet entirely willing to go along with this plan. “We think this can be relatively painless for the broadcasters, but it’s still going to take a lot of work at Congress and at the FCC to get it done,” Largent said.

That the wireless industry would be getting behind Obama’s plan is no surprise given their exploding spectrum needs for data services, so there is a bit of a grain-of-salt element to the study’s findings. However it’s also a solid signal that the wireless carriers are willing to bring serious cash to bear for spectrum, which is, generally speaking, good news for all concerned.

Broadcasters are understandably taking a cautious line. In a statement issued last week in response to Obama’s speech in Michigan, Dennis Wharton, executive vice president of the National Association of Broadcasters said, “Let’s not forget that broadcasters returned more than a quarter of TV station spectrum to the government less than two years ago, and that much of that spectrum has not yet been deployed. NAB is not against the President’s plan. We will work to ensure that incentive auctions remain truly voluntary, and that broadcasters who don’t volunteer to return spectrum–and the millions of viewers that we serve–are held harmless.”

Nokia Stops Christmas From Coming

John Paczkowski — Tue, 14 Dec 2010 18:03:49 +0000

A colder, more brutal winter than usual for Nokia’s Finnish workforce. The company is sacking 800 employees in its home market as part of its effort to “accelerate the company’s transformation towards a leading mobile solutions provider.”

Nokia says the cuts have been on the table since October, when it announced a personnel restructuring during its Q3 results. And indeed it has. From a press release issued that month:

“Altogether, the planned changes are expected to result in a reduction of up to 1,800 employees globally, as activities are planned to be discontinued and integrated. Nokia will begin applicable consultations with employee representatives about these plans.”

News of the layoffs comes on the same day that Nokia said it will miss another shipping deadline for its new E7 smartphone. That device, which will run the next iteration of the company’s Symbian OS, was expected to launch this year. Now its debut has been postponed until early 2011.

Condé's Cuts Come to Vogue

Peter Kafka — Wed, 14 Oct 2009 20:32:31 +0000

As expected, Condé Nast executives are swinging the layoff ax around the fabled magazine publisher. Today’s cuts are at Vogue, where I’m told at least six people have been let go from one of the company’s best-known titles.

There will be more to come at the publisher, which shut down four magazines last week and is trying to bring down costs at its remaining titles by 25 percent. “Everybody’s tense and anxious here,” says a still-employed Condé Nast worker. “A terrible environment. We know the layoffs are coming but don’t know how many or when.”

Statement from Condé spokeswoman Maurie Perl:

We announced last week when we closed the four titles that there would be companywide expense cost reductions and some workforce reductions in association with the 2010 budget process. These Vogue layoffs are part of that and we have no further comment on the subject.

A reminder: Vogue’s September 2007 issue was supposedly the biggest in magazine history, and its production has been chronicled in a documentary you can see in theaters today. But Vogue’s September 2009 issue’s ad count was down more than 50 percent compared with the previous year.

Sprint Leaves the Networking to Ericsson

John Paczkowski — Thu, 09 Jul 2009 18:00:41 +0000

[ See post to watch video ]

Kindle Now Only $299 More Than iPhone Kindle App

John Paczkowski — Wed, 08 Jul 2009 22:10:09 +0000

Amazon hasn’t said how many Kindles it has sold since launching the device in 2007, but it may soon be selling quite a few more of them. The company today dropped the price of the six-inch Kindle to $299, $60 off of its previous price. That’s certainly not a dramatic reduction, but it may be enough to drive consumers who’ve held off on purchasing the device to reconsider.

That said, even at this reduced price, the Amazon Kindle still costs $299 more than Kindle for Apple’s iPhone, which I’ve found to be a compelling way to read books. After six or so novels, I have no complaints about eye strain, screen size or glare. And honestly, I think I’m reading more now than I ever did before simply because I always have the book I’m currently reading in my pocket.

Anyway…

Today’s price cut makes you wonder if this presages a similar reduction for the Kindle DX, which at $489 could really use one. A bit too early, I suppose, since Amazon (AMZN) hasn’t yet announced pricing for subscriptions to the Washington Post (WPO) and New York Times (NYT). We’ll see, I guess.

Tech Job Cuts Upgraded to "Appalling" from "Gruesome"

John Paczkowski — Mon, 06 Apr 2009 19:30:01 +0000

The first three months of 2009 were brutal ones for the high-tech industry–from a job loss perspective, the worst in seven years. Challenger, Gray & Christmas on Monday said high-tech companies sacked some 84,217 employees in the first quarter, a 27 percent increase over the previous quarter and the steepest reduction the firm has seen since the Great Dark Time of 2002. It’s also nearly five times the 17,345 jobs lost in the same period a year ago. (Click on table below to enlarge.)

An ugly metric, and one that’s likely to grow worse in coming months. Challenger says job cuts have risen five straight quarters. What’s to stop them rising for a sixth? No idea.

“Unfortunately, no industry appears to be immune in this recession,” CEO John Challenger said in a statement. “Even the health care sector, which has consistently added jobs throughout the downturn, is starting to see those gains shrink.” That said, the firm doesn’t see things getting as grim as they did in the 2001 recession. At that time employers announced an average of 145,467 total job cuts each quarter. With only 84,217 cuts announced in the most recent quarter, we’ve still got quite a way to go before we hit that number. Course, we’re also off to a great start…

Tech Job Cuts Upgraded to "Appalling" from "Gruesome"

John Paczkowski — Mon, 06 Apr 2009 19:30:01 +0000

An ugly metric, and one that’s likely to grow worse in coming months. Challenger says job cuts have risen five straight quarters. What’s to stop them rising for a sixth? No idea.

Swedish File-Sharers Mull VPN (Virtual Pirate Network)

John Paczkowski — Thu, 02 Apr 2009 16:54:30 +0000

If Sweden’s Intellectual Property Rights Enforcement Directive was crafted to scare the hell out of the country’s Internet population, it seems to have had the desired affect. Swedish Internet traffic dropped by a third on Wednesday after the law, which allows copyright holders to force ISPs to divulge the IP addresses of computers sharing copyrighted material, was implemented and five audio book publishers rushed immediately to use it.

“The majority of all internet traffic is file sharing, which is why nothing other than the new IPRED law can explain this major drop in traffic,” Anti-piracy Agency lawyer Henrik Pontén told Metro. “This sends a very strong signal that the legislation works.” Christian Engstrom, vice chairman of the Pirate Party, a group seeking copyright law reform, agreed, but said the decline is likely to be only temporary. Once the public realizes that the odds of being busted for file-sharing are low, Internet traffic will return to normal levels again. “Today, there is a very drastic reduction in internet traffic,” Engstrom told The BBC. “But experience from other countries suggests that while file-sharing drops on the day a law is passed, it starts climbing again. One of the reasons is that it takes people a few weeks to figure out how to change their security settings so that can share files anonymously. We estimate there are two million file-sharing [computers] in Sweden, so even if they prosecuted a 1,000 people to make an example of them, for an individual user it is still a very small risk.”

[Image credit: Chart courtesy Royal Pingdom]

Report: Microsoft May or May Not Announce Layoffs

John Paczkowski — Fri, 02 Jan 2009 11:00:01 +0000

With the economy continuing to sour and consumer tech spending slowing, speculation is running rampant that Microsoft may soon join the sad conga line of tech companies announcing layoffs. According to an unsubstantiated, poorly sourced report currently making the rounds, Redmond is steeling itself for a massive Jan. 15 staff reduction–one that would affect some 15,000 employees–about 17 percent of Microsoft’s global workforce. Quite a deep cut–if it were to happen. Though there’s not much reason to believe it will. After all, the source of the report is a site whose name begins with FUD (fear, uncertainty and doubt). Microsoft (MSFT) has refused to comment on its claims. And, frankly, it’s difficult to see the company taking the scythe to 17 percent of worldwide operations–even in this lousy economy. “Unless Microsoft’s business has been absolutely crushed in the past two months, there is no reason for the company to suddenly cut this much cost,” writes Silicon Alley Insider’s Henry Blodget. “The only way we could see Microsoft laying off this many people is if the company decided to eliminate business units. And if Microsoft did decide to restructure its business, it would likely sell rather than shut down divisions.”

Over at Mini-Microsoft, the Redmond insiders who frequent the site’s comments are incredulous over the layoff rumors, insisting that they are baseless. Costs will be cut, they say, but they will be cut through attrition and reduction in open headcount. “For the last time folks–THERE ARE NO LAYOFFS HAPPENINGS IN JANUARY,” writes one Mini-Microsoft commenter. “Beyond Jan…well we dont have a crystal ball–but if the economy doesn’t improve and the company misses targets–it would get uglier for everyone–from no raises/no bonuses to (maybe) cutbacks/layoffs… but then, those are the rules of the game in corporate America.”

Newest Unpleasant Ad Numbers: Mortgage Ads Down 62 Percent

Peter Kafka — Tue, 02 Dec 2008 17:18:53 +0000

Your grim advertising stats for the day: Financial advertisers pull back in 2008, and another ad agency predicts a spending decline for 2009. In other news, the sun rises in the East, and sets in the West.

It’s no surprise, obviously, that financial advertising has slowed down in the first three quarters of 2008. The surprise is that it’s only been a 10 percent reduction (so far), according to Nielsen.

There are also some interesting breakdowns: Mortgage and loan companies spent 62 percent less (of course). But credit service companies increased their spend by 22 percent, and investment service companies boosted their spend by six percent.

Here’s Nielsen’s list of top 10 financial advertisers (click chart to enlarge): Note that Bank Of America (BAC), one of the comparative winners during the meltdown, has cut its spend by 30 percent so far this year–slightly more than teetering Citigroup’s (C) 26.5 percent cut. Previously left-for-dead ETrade (ETFC), meanwhile, bumped up its spend by 24.5 percent.

Want more unpleasantness? OK. Comes now yet another ad executive to tell you that next year will be very unpleasant for anyone looking to make a living off of advertising revenue.

U.S. advertising spending will drop 5-8 percent next year, says Steve Lanzano, chief operating officer of MPG North America, a unit of French advertising conglomerate Havas SA. Lanzano predicts that sports advertising, long considered one of the most impervious to downturns, will get roughed up as well:

Even television sports, which have become more popular with advertisers since audiences tend to watch the events live rather than recording them, will suffer from the broad pullback in marketing spending, said Lanzano.

Lanzano estimated 9 to 10 percent of spending on broadcast sports comes from financial services and automotive, both industries that have been in turmoil. ‘That’s a lot of money moving out,’ said Lanzano.

‘Because of the hits in the categories that support sports–whether it’s financial or automotive or retail–I think they might take a little more of a hit than they would in other recessionary periods,’ he said.”

OK. Let’s break the glumness up a bit, shall we? If you’re looking for a cheap laugh, head to the Hollywood Reporter’s take on the Nielsen numbers. Then feast your eyes on the unintentional, yet very successful contextual advertising placed to the right of the story (which is where I borrowed the image currently at the top of this story).