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The Technology Liberation Front

The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
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Buying or pacifying?

Started by TLF · 3 months ago

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  • The price of $4.6 billion for the C block seems arbitrary; as always, the FCC faces the economic calculation problem. How can the government know the true market value of the spectrum without market pricing signals, before the auction has occurred? $4.6 billion is just an estimate, and I would be interested to know how exactly the FCC came up with that number. If the value of the block turns out to be less than $4.6 billion, then the reserve pricing scheme will let the owner decide whether to allow any application or service. And if the 700mhz spectrum is worth more than the reserve price, open access rules will still artificially depress the value, meaning taxpayers lose. The FCC is finally figuring out that open access rules mean less money in government coffers, so at least there’s some chance that whoever wins the auction will have real ownership rights. But instead of setting a reserve price, the FCC should abandon these restrictions to make sure the spectrum is put to its most economically valuable use. And if the FCC's goal is to pacify Congress, there's no better way than to generate as much revenue as possible from the upcoming auction.

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