- Auctions
shut out worthy providers and new entrants via timing issues, awkward
or prohibitive partitioning of market areas, very large upfront
payments, abuse of
auction preferences and discounts, use of "shell" companies as bidders,
hoarding, inability to finance
acquisition due to uncertainty regarding future value, and preemptive
bids
by entities seeking to forestall wireless competition
- Spectrum isn't fungible due
to frequency specificity of equipment. (Even cognitive radios must be
certified on each band and are generally
limited to a particular region
of the spectrum)
- Because spectrum isn't
fungible, neither the FCC nor any third party can "make" a healthy market.
Market will fail even after a
"big bang" auction (as
proposed by Farber
and Faulhaber)
- LARIAT's
analysis has consistently shown that even at FCC's minimum bid (5
cents per MHz per person), auctioned spectrum is so expensive
that a savings
account has better ROI than broadband operation on auctioned spectrum
- Just as
public roads with many licensed drivers enable competitive delivery
services,
nonexclusive licensing allows creation of robust
markets for many services
that use spectrum,
maximizing public benefit
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