Google et al. Want 700 MHz Auction Opened Up

The 700 MHz spectrum could give birth to the much-anticipated third pipe, but phone and cable lobbyists are currently pressuring the FCC to sell companies like AT&T and Verizon our airwaves — in a flawed auction process — so they can hoard this valuable spectrum and stifle competitive alternatives to their networks. Google and other would-be providers are not taking it lying down. They want the FCC to mandate that whoever wins the auction be required to sell access to those airwaves, at wholesale prices, to anyone wanting to provide broadband Internet service. They also want anonymous auctions to prevent the giant incumbents from manipulating the results against small players (as they have done in the past).

Comments

Generalized Economic Rent Tax

[Baldrson]

The way spectrum is currently utilized, it is like land. Although it doesn't have to be this way, reality dictates that until proper technologies for spectrum utilization are put into place, that spectrum be treated like land:

The users should rent it from the government that is enforcing their property rights over this natural resource.

This is a principle called "economic rent".

Milton Friedman has declared such taxation the "least distorting" kind of tax.

The way to set the rental agreement is to determine the liquidation value of the "land", and then charge a rent on it equal to the interest rate on short term US treasury instruments.

As with any rental agreement there would be other terms but the basic idea is that such resources enjoy liquidation value changes that are primarily a result of the economic environment -- meaning economic externalities drive the liquidation value -- and allocation of externalities is a social function.

Make the FCC try something new...

[Doppler00]

Why not just leave the spectrum completely open to the public like 900MHz and 2.4GHz? Although, require that the spectrum must use intelligent radio devices that comply to a single standard (through IEEE for example).

Save Our Spectrum (?)

[mgoren]

Is this related to the Save Our Spectrum coalition? I believe that group is asking for the following:

• establish a service rule for broadband services operating in the 700 MHz band that protects the consumer's right to use any equipment, content, application or service on a non-discriminatory basis without interference from the network provider.
  
• allow third-party access to spectrum owned by other companies. This "open access" plan to include wholesale access to networks would enable more competitors to offer services
  
• institute anonymous bidding in auctions to lessen the possibility of bid signalling and bid rigging that studies found to have taken place in prior auctions.
  

Also, what about open spectrum? Does it work well in practice? Would that be a better solution? (though I know it's a moot point for the upcoming auction.)

You can keep your money.

[twitter]

The FCC has intentionally let the market collapse to a false competition between a local cable company and a local phone company. Very few phone companies have come through with their promisses so Cable is really the only option most people may have. Cable everywhere has blocked ports and intentionally low upload speeds. The US 16th in the network world and falling fast.