Study: Limiting Bidding On Spectrum Could Cost Billions 140
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.'"
Re:Those who would trade a bit of freedom... (Score:4, Informative)
No, my assumption is that someone other than AT&T/Verizon/T-Mobile being awarded the spectrum does not automatically equal public good.
It still takes a fortune to build the infrastructure to support a wireless network. The argument being made here is that if one of the big providers were to acquire the spectrum, they'd take the cost out on their customers.
Surely y'all aren't naive enough to believe that whomever acquires the spectrum *isn't* going to do the same. They still need to be competitive, which means they still need to make money, and so they're still going to charge rates that are within the ballpark of AT&T and Verizon. If they're significantly lower, then yes, it may force AT&T and Verizon to adjust their prices downward, at least in certain markets (I seriously doubt that any other likely purchasers are going to become players on a national level).
Or, more likely, AT&T and Verizon adjust their prices to actually be lower, stealing the competitors customers, strangling their revenue, and eventually putting them out of business. AT&T and Verizon can afford to absorb a short term loss to deal with a competitor. Once said competitor is no longer an issue, prices go up again.
You don't think this happens? You've never witnessed what happens when a Wal-Mart moves into an area that previously had none.
In order to actually compete with AT&T and Verizon, you need to offer a superior product and superior service, at a better price. Good luck.