The Federal Communications Commission has single-handedly turned government spectrum auctions into a soupy quagmire. It all started with the entrepreneurs spectrum auction in 1996 that was designed to give smaller players a chance to buy into the land rush for wireless services. They went hog wild with their bidding, then promptly went bust. The FCC cancelled the licenses and resold the spectrum for $17 billion earlier this year. But a court later ruled that NextWave Telecom, one of the bankrupt small guys, could in fact keep its licenses as assets. Now the FCC has pledged to appeal the case to the Supreme Court. Why didnt the FCC wait for a ruling before proceeding with the reauction? Some would say because it has a raspberry-size brain. The government now has multiple winners for the same spectrum, and will probably have to return most of the money to the second bidders. Meanwhile, the bulk of mobile phone licenses sold in 1996 remain unused.
The Federal Communications Commission has single-handedly turned government spectrum auctions into a soupy quagmire