The Dish/T-Mobile merger and the first rule of Spectrum Club

[Commentary] The first rule of Spectrum Club is… get spectrum as quickly as possible into the hands of someone who will put it to its highest-value use. So long as spectrum gets into the hands of firms that can effectively and quickly put it to use, the consumer benefits are roughly the same no matter who wins spectrum at auction. Conversely, delaying this process even by a few months -- for instance, by designing complex rules in an effort to maximize the revenue raised by an auction, or by jury-rigging the results to ensure politically favorable outcomes -- can have substantial costs for consumers.

The recent AWS-3 auction demonstrates what can go wrong when the FCC violates this first rule of spectrum auctions. Curiously, the pending Dish/T-Mobile merger presents the FCC with an opportunity to make things worse in an effort to correct its auction design mistakes.Sadly, political convenience and necessity often trump this first rule of spectrum auctions. Every day that passes without approval of this merger is a day that consumers are denied the benefits of increased competition and that consumers are unable to use the incredibly valuable AWS-3 spectrum.

[Gus Hurwitz is an assistant professor at the University of Nebraska College of Law]