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Study: Limiting Bidding On Spectrum Could Cost Billions
itwbennett writes "According to a study (PDF) by the Georgetown Center for Business and Public Policy, restricting the ability of Verizon Wireless and AT&T to bid in upcoming spectrum auctions would drive down the bidding during the auction, and could cost the U.S. treasury as much as $12 billion. Even a partial restriction of bids by Verizon and AT&T could have a significant impact on auction revenues, said Douglas Holtz-Eakin, a co-author of the Georgetown study. Matt Wood, policy director at digital rights group Free Press, fired back, saying 'No one is talking about completely barring AT&T and Verizon from the incentive auction. Sensible people are talking about making sure that more than two companies have a chance at obtaining spectrum. The fact that these duopolists hired economists to parrot the companies' own talking points isn't really that newsworthy.'"
How is cellular spectrum allocation done in other countries, and how many carriers do they have? Knowledge of any other country is appreciated. I've long wondered how it would be in cellular with an old Ma Bell (AT&T pre-divestiture) style monopoly. Part of me likes the competition idea, but with spectrum so limited and cellular infrastructure so expensive to build, it seems awfully wasteful. It's not quite a natural monopoly, but it verges on it.
Managed spectrum is in no way "free market." It is a public resource, administered by the government, and naturally constrained. There is only flexibility in demand - supply is firmly fixed.
As such, the value is not only what an entity is willing to pay, but also in what benefit the public will gain for allowing their resource to be used.
A true free market attitude would be to support a spectrum commons.
"National Security is the chief cause of national insecurity." - Celine's First Law
Here is a simple way to make telecoms move on the spectrum they are sitting on: make the lease non-permanent.
If each lease lasted, say, 15 years, and had to be rebid, say, 5 years before the lease expires, the incentive to sit on spectrum would diminish greatly. The prices that companies are willing to pay for spectrum might diminish somewhat, but not utilizing spectrum would start costing real money, and new competition would have a chance to enter the market every now and then.
The problem with the current system is that obtaining a lease to spectrum gives companies a permanent monopoly on the spectrum forever, which decreases the incentive for competition. The spectrum is a sunk cost and delaying utilization of it is merely a loss of revenue, but not a direct cost.
m
That was my first thought; maybe the better thing to do is create more competition in the market instead of allowing Verizon and AT&T to fuck us even harder. Like someone else said; the consumer is going to pay for the spectrum in the long run anyway; why not lower the cost of it (or lease it as another suggested) and lower everyone's phone bills. The less money we have to spend for cell service the more that goes to other businesses (ie. taxes; which would probably make up that made-up $12 billion figure eventually).
-SaNo
The best outcome would be a government run national cellphone service, run as a not for profit. Add unlocked phones and free tethering and you've got a winner. I know Americans are allergic to government run anything, but it works well for roads.