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U.S. wireless spectrum policy clearly isnt working and until its changed, cell phone users will pay higher prices and competitive providers will be prevented from entering the market.
The most recent PCS reauction is a case in point: License winners spent nearly $17 billion on the spectrum. One analyst, who asked not to be named, took a stab at how much New York City customers will end up paying for that spectrum, estimating that users could be tapped for $3.50 per month for the next five years. New Yorkers would probably prefer to spend the extra money on additional, useful services.
Meanwhile, operators in some European countries are about to go broke due to the huge sums they pledged for new spectrum. Some groups fear these operators will be left far behind those in countries such as Japan and some Scandinavian nations that received licenses for relatively small amounts of money and can move full steam ahead with investments in infrastructure and services.
The most ironic part of this situation in the U.S. is that, regardless of the pricey distribution process, we dont have additional spectrum for operators to acquire in the future. The Federal Communications Commission and the National Telecommunications and Information Administration recently concluded studies showing that it would be prohibitively difficult to share spectrum or ask current users to move from frequencies that are being considered around the world for 3G.
While the search for usable spectrum isnt over yet, its likely that soperators will be forced to make due with what theyve got or force-fit next-generation networks into less than ideal spectrum.