Wireless Spectrum

You gotta love how the free market works when left alone by the Government!

Just as Frontline and others are demanding that the government has to intervene in the 700 MHz auction to "create" a third broadband pipe, the free market finds another way to solve these market problems without the Government.

One of the most significant developments in the spectrum world today was not the hot air at the Senate Commerce Committee hearing, but what happened in the free market -- DirecTV and Echostar signing agreements with Clearwire to sell their WiMax broadband service.

The cover story in the Wall Street Journal today "A fight over what you  can do with your cellphone; Handset makers push free features for which carriers pay for" was obviously perfectly-timed and placed by open access/net neutrality proponents trying to influence the Senate Commerce Committee hearing today on the FCC's 700 MHz auction.

• The article offers a list of complaints for net neutrality supportive Senators to browbeat competitive wireless carriers with.

What the article ignores is the broader and essential context of this issue and debate.

I was glad to see a heavyweight group of economists systematically debunk Frontline's economic gymnastics to try and justify a sweetheart spectrum deal for Frontline at the expense of the American taxpayer.

• For those who want to get into the details and understand the defensible economic arguments surrounding the 700 MHz auction, I recommend the white paper of Wharton's Gerald Faulhaber, AEI-Brookings Robert Hahn and Criterion Economics Hal Singer "Should the FCC depart from over a decade of market oriented spectrum policy?" 
• My favorite part is where they cut through Frontline's economic misdirection and focus on the real bottomline impact of Frontline's proposal -- the government regulating away potential competitors to Frontline so it can capture a huge windfall by snatching extremely valuable spectrum way below its market value.

Remember, there is nothing "neutral" about trying to shaft the American taxpayer!