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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).
FTFA:
"The 700 MHz auctions will not give birth to the much anticipated third pipe if the licenses are auctioned to the very same vertically integrated telephone and cable incumbents that dominate the wireline market."
Reading that leads me to believe that "telephone and cable incumbents that dominate the wireline market" are the first two pipes.
Pipes of course referring to internet connectivity.
You have to have a pipe to connect to the tubes... (couldn't resist)
Ramen
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.
Seastead this.
Why wouldn't [Google] simply outbid the competitors and sell the space themselves?
The "competitors" can collude and form a much larger bidder than anyone else. They drive the price up where real competition advances but leave prices low for themselves elsewhere. If bidding is anonymous, it will be harder for people to collude and everyone will have to pay what they think the airwaves are worth.
There are still problems with the proposals. The first is that the incumbents won't treat their competitors fairly, even if forced by law to share. They will screw them over and pay whatever fees the government levies but then pass the costs back to you and me. The second problem is that the incumbents can overbid because they know there will be no real competition and they can charge whatever they like in the long run. These are not shortcomings of a free market, they are failures in regulations for a scarce resource which some say is not scarce afterall. It's ultimately a failure to share equitably.
How much do you really want to pay for your airwaves? I want mine free. The FCC should change it's mission to the above mentioned report and enforcing peaceful co-existence. The only problems with spectrum would be accidental disruption, which can be fixed, and willful disruption, which should be punished.
Friends don't help friends install M$ junk.
- 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.)Yeah, I've been trying to get my wife to go for that for a while, but she's afraid of getting Santorum all over the place.