Those networks rely on publicly owned airwaves, so the public has the right to put whatever conditions they want on those licenses.
That said, I really hate our spectrum auction system. Going forward, I would prefer use restricted unlicensed bands... I think Europe's model is better than ours too.
Sure, but let's not forget that the wireless carriers paid billions of dollars for that spectrum, and once they purchased those airwaves, they became private. As for spectrum auctions, they are the solution favored by economists for dealing with scarce public resources. The idea of creating property rights in spectrum and auctioning them was proposed by none other than Ronald Coase: http://www.ft.com/intl/cms/s/0/bfffd9fa-e9e2-11de-ae43-00144.... Obviously the current spectrum auctions fall short of the ideal--it should be possible to use purchased spectrum for any use not just specified uses, but they're much better than what we had before.
I favor using unlicensed bands for a lot of things,[1] but for cellular, dedicated bands auctioned to the highest bidder are probably the way to go.
Appreciate the the response, the Werbach paper looks interesting. My point was just that wireless communications do rely on public assets in a significant way.
Wouldn't unlicensed bands that are dedicated to cellular vastly improve coverage for customers? Rather than the auction, tax payer money could be invested into building the network infrastructure and the carriers could lease access at cost (similar to many other utilities today). I can think of a number of advantages:
* Cell providers compete more on price.
* All devices are portable to other providers.
* All hardware uses just one radio.
* Above items then result in better device battery life.
From the perspective of a cellular customers and a business reliant on consistent internet connectivity, this would be a boon... From a carriers perspective, they benefit from the existing inefficiencies and besides, it would deeply cut into their monopoly profits .
> My point was just that wireless communications do rely on public assets in a significant way.
The whole point of auctions is to take a public asset, compensate the public through the auction process, then make it private and let the market manage it. At that point, it's no longer public.
> From a carriers perspective, they benefit from the existing inefficiencies and besides, it would deeply cut into their monopoly profits .
The cellular carriers aren't monopolies. At three or four major carriers, there's much more competition in that space than in, say, the search engine space or the consumer operating system space, or in the mobile operating system space. Moreover, those profits are what motivate companies like AT&T and Verizon to spend tens of billions of dollars a year investing in infrastructure that becomes rapidly obsolete.
Look at our other public infrastructure. It's decrepit. Amtrak still has lots of cars built in the 1970's. Our power companies are running century-old coal fired power plants. You think there's the public will to spend tens of billions of tax dollars each year upgrading cellular infrastructure to keep pace with technology? Once public wireless infrastructure was built, it'd be a fight to just get enough funding to merely maintain it, the same sort of fight we're having with rail infrastructure, water infrastructure, etc. E.g. many rail routes are slower today than they were in the 1960's, because the infrastructure has been allowed to deteriorate.
There's an article on the front page today that gives you an idea of how well our "other utilities" work: http://www.newyorker.com/magazine/2014/08/04/swim-swam-swum ("Grzybowski sampled again, and the C.F.U. count in the river exceeded 24,196, the highest possible measurement. 'Pretty much raw sewage,' he reported.")
Verizon's quarterly profits are a fraction of those of Google, which is a single Internet company. If you had to pick a place to be on the value chain and profitability was your only metric, infrastructure is a bad place to be.
