If Spectrum Prices Are Falling, Blame The Government
However, it's worth wondering if the FCC's way of handling licenses doesn't also hold things back -- not just the amount it takes in from the auction, but the state of the US wireless landscape. The FCC breaks the licenses up into cellular market areas -- meaning they cover only a particular city or area -- rather than selling regional or national licenses. While such an approach does allow for small, locally or regionally focused companies to grab spectrum, it also forces companies looking to create nationwide networks to bid in hundreds of individual auctions, rather than competing for a single nationwide license. Such licenses could offer a lot of benefits, like using coverage requirements to stipulate broader buildouts, and they could also swell the government's coffers a bit more. The situation now has operators bidding on individual licenses that aren't typically worth much except as a part of a greater whole, attaching a significant amount of risk to each one. If operators could mollify that risk by knowing before an auction starts that if they win, they'll come out with everything, it could loosen their pursestrings. Of course, the entire idea of spectrum allocation and how it's handled in the US are due for a rethink, not just how the FCC carves the country into licenses. Update: As pointed out in the comments, the FCC is taking something of a hybrid approach with the AWS auction, selling a set of licenses split up into 734 market areas, then two sets split into 176 economic areas, then three sets split into six regional areas. Still, the point remains that the complex and often inefficient methods of spectrum allocation the FCC uses could use some re-examination.