At 09 Jan 2008 07:43:34 +0000 John Navas wrote:

> >This was setup by the big boys to keep the little guys from
> > bidding....same
> >as Broadcasting. Big corporations with BIG, DEEP pockets full of money
> > for political hacks to be paid from is all Washington is about.
>
> Not so:
> * Auctioning spectrum ensures the most efficient use of that spectrum.


How so? One could easily argue that money taints the process. Suppose, for
example, a future cash-strapped administration decides the x# of billions
another cellular band would bring in trumps it's current "profitless" use by,

say, the military?

Secondly, the auction payment is a barrier to actually deploying a service,
since a company's resources are squandered by buying the spectrum before
the first dollar is spent on actual infrastructure. This also drives up
the cost of providing service, which utimately costs the very consumers
who, as Larry points out, actually own the spectrum in the first place.)

This can also stifle competition- it's in the best interests of, for example,

AT&T and Verizon, to buy the spectrum to lock out additional future
competitors like Google, Comcast or Echostar from upsetting their current
practical duopoly. A more consumer-friendly FCC might enforce tighter
spectrum limits to foster competition (I still can't believe they allow one
company to control both 800-band cellular licenses in some areas!)


> * Up front cash is just prudent auction practice, to avoid disruption of
> the auction process by those that can't really afford to bid.


True- as long as you're having an auction, there's nothing wrong with
requiring a "deposit" to sit at the table. ;-)