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It never ceases to amaze me that we allow our FCC to sell leases for so little. Instead of demanding companies share revenue or provide basic services for all f

It never ceases to amaze me that we allow our FCC to sell leases for so little. Instead of demanding companies share revenue or provide basic services for all for free, we allow this type of theft under colour of "fair governmental auction". I feel the opposite -- why are the leases so expensive? Billions of dollars paid to the government for spectrum is a hidden tax since it's paid by consumers. Much better would be to sell them for the cost of administration of the sale, but only upon approval of a business plan that weighs the value to consumers in awarding the bid. So instead of selling to huge telcos that can afford to pay billions of dollars, it could be sold to a much smaller company that may provide a better value to end users.

deleted 7y ago
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rayiner 7y ago
The tax on consumers is appropriate because cell users should pay for the opportunity cost of removing the spectrum from other possible uses. As to government review of business plans—the market is better at deciding what business models bring “better value to end users” than the government. We used to have exactly the model you suggest—the FCC would grant spectrum licenses based on its view of “the public interest.” It was a disaster—resulting in our current situation where huge amounts of spectrum are locked up in low value uses like over-the-air TV.
- Johnny555 7y ago
  Over the air broadcast TV provided great value to consumers (and still does -- lets me watch local TV without needing to buy cable). The problem with broadcast TV is that the technology at the time meant that the spectrum had to be dedicated to TV and can't easily be phased out for other uses -- the cutover to digital TV was a huge ordeal. That's no longer the case, different users can share the same spectrum today.
ubercow13 7y ago
If the lease was cheap, what would force the owner to price their services any cheaper? No one can compete with them anyway as they own the spectrum
- Johnny555 7y ago
  Their approved business plan - that's the entire point of having a business plan review, not just picking the highest bidder. If they say they are going to sell wireless broadband at $xx/mbit to consumers, they need to follow through or lose their spectrum allocation, so there's no incentive to lie.

deleted 7y ago

[deleted]

rayiner 7y ago

The tax on consumers is appropriate because cell users should pay for the opportunity cost of removing the spectrum from other possible uses. As to government review of business plans—the market is better at deciding what business models bring “better value to end users” than the government. We used to have exactly the model you suggest—the FCC would grant spectrum licenses based on its view of “the public interest.” It was a disaster—resulting in our current situation where huge amounts of spectrum are locked up in low value uses like over-the-air TV.

Johnny555 7y ago
Over the air broadcast TV provided great value to consumers (and still does -- lets me watch local TV without needing to buy cable). The problem with broadcast TV is that the technology at the time meant that the spectrum had to be dedicated to TV and can't easily be phased out for other uses -- the cutover to digital TV was a huge ordeal. That's no longer the case, different users can share the same spectrum today.

ubercow13 7y ago

If the lease was cheap, what would force the owner to price their services any cheaper? No one can compete with them anyway as they own the spectrum

Johnny555 7y ago
Their approved business plan - that's the entire point of having a business plan review, not just picking the highest bidder. If they say they are going to sell wireless broadband at $xx/mbit to consumers, they need to follow through or lose their spectrum allocation, so there's no incentive to lie.