Company Says Spectrum Auctions Don't Work, So Just Give It Some Airwaves Instead

from the nice-try dept

Different countries' telecom regulators take different approaches to handing out wireless spectrum. Some use so-called beauty contests, where interested companies file proposals for the airwaves in question, and the regulator judges them on some set of criteria and gives out licenses. In the US and many other places, regulators use auctions, selling off licenses to the highest bidder. The FCC's auction system can get quite complex, with all sorts of different licenses for different areas and different amounts of spectrum, and discounts for smaller companies and bidders. While we wait for a complete overhaul of the spectrum allocation process, in many cases, auctions are a "least worst" solution. The FCC plans to auction off some 700 MHz spectrum this summer, and its properties make it very desirable for wireless broadband providers. Part of this spectrum has already been allocated for public-safety use, and some companies are trying to use that angle circumvent the auction process and grab more spectrum for lower prices, or even free. The general idea is that they would build a nationwide network and lease capacity on it to operators and service providers, and earn revenue from that. They'd then also charge public-safety groups for access to the network, but would give their traffic priority on it, particularly during emergencies. There have been other, similar proposals for other spectrum in the past, including one group who wants a 15-year license for some 2100 MHz spectrum for free, then promises to offer free ad-supported service across the country, and to pay 5% of the revenues from a faster, paid service to the government. While we're skeptical of any plan that promises to build a nationwide wireless network, then offer free service, given the huge costs of building such a network, we noted at the time it was nice to see people exploring alternatives to spectrum auctions.

Now, the company behind that proposal, M2Z, is back with an in-no-way-at-all-biased survey it says shows that spectrum auctions don't always work. While that point is pretty clear -- just look at the NextWave fiasco for proof -- it's also pretty clear that this study really can't be regarded as an unbiased, objective view of the topic. While spectrum auctions certainly aren't perfect, it's hard to see simply giving away spectrum to anybody that puts together a plan and gets some VC as an ideal method, either. In any case, this all highlights the interest in and need for a reexamination of the FCC's spectrum allocation policies, and in particular, a look at how creating a much more open, flexible market for spectrum (including opening more unlicensed spectrum) could be beneficial.