Or to phase that another way: There is a lot of spectrum. But very little spectrum that is suitable for mobile phone usage. When a resource is finite and valuable, it gets expensive.
If you want a "real" solution that would allow startups to play in the ballpit? Pass new national laws which split the cellular companies into two organisations, one that offers consumer services, and another which exists to maintain/install/upgrade the physical cellular network (and who then resells access).
It actually makes little sense to have competing and exclusive cellular infrastructure. The infrastructure should just be like a public resource, like a road, and the cellphone companies should be like shipping companies, utilising a public resource (the road) to sell a service (shipping stuff).
I'd be all for the government using eminent domain to seize every single cellphone tower in the country, and then reselling access to them to every cell phone company equally. But it isn't very capitalist...
So there is a lot of theoretical economic work on how to allocate limited rival resources like spectrum (and water). The consensus is that the efficient way to do it is auctions. I have quibbles with certain assumptions in that research,[1] but for stuff like cellular spectrum (where the owner can achieve extremely high utilization), auctioning to private companies is probably quite close to efficient. It would be more efficient if we got rid of restrictions on use and transfer.
Yes, that does mean that you end up with mega-corps providing your cellular service. But the same is true for say retail. Amazon will eat the whole industry. Physics as well as economics strongly favor mega-corps. Startups have advantages, but specific and narrow ones.
An alternative would be to split wireless companies into 1) infrastructure companies and 2) companies that sell actual products to end users. The infrastructure companies would be allowed to bid on limited shared resources (= the spectrum), but a requirement for this would be that they would need to provide fair, reasonable and non-discriminatory access to the resources to other companies.
This is similar to the approach that some countries used when privatizing railroad companies: Instead of creating a new private company that's effectively a monopoly, they created one company that provides the infrastructure and another company that runs the trains. This allowed new private companies to enter the market, as they were allowed to use the resources under the same conditions as the former monopoly.
Are we happy with mega-corps providing our wifi service? Our bluetooth service? These are also using limited rival resources. Under an auction system, we'd be paying rent on this spectrum (through expensive closed devices, or time-limited licensed systems) to guarantee non-interference.
I personally would be less than pleased to have to pay extra on an ongoing basis just to have a wifi router in my home, or a wifi radio on my laptop. Extending private property rights into what is currently a commons would seem to imply that though.
One infrastructure company wouldn't work so well. You'd need at least two, preferably 3, with the ability for the resellers to quickly and easily switch.
Here in New Zealand we have three providers, but we have national number portability. This means I can switch networks with no fees (unless I have a contract with a termination clause) and no number downtime. It helps competition a lot.
If it was a single infrastructure company, all cell companies could use the same towers. This would remove the competition of when/where you have cellular access due to location.
Number portability is already possible here in the US, and so long as I am not on a contract I can switch without fees.
> Pass new national laws which split the cellular companies into two organisations, one that offers consumer services, and another which exists to maintain/install/upgrade the physical cellular network (and who then resells access).
That was the shape of the cellular networks in the UK in the early days of mobile telephony, IIRC.
How do you see the consumer services competing on anything but price, speed, and usage without breaking net neutrality? How do you see a "shipping" future for cell phone companies any different than the FedEx/UPS duopoly?
How do they compete now where they exist markets with good coverage? Most major US cities have complete coverage from the big three, so they must be competing on things other than coverage.
Sure, this will even the playing field for coverage, but it won't even it for anything else (customer services, device financing, cost, et al). Plus actual network costs have little relation to what companies can charge, since all cellular companies over-sell their network.
I'm sure with this there will be companies that offer terrible customer service, and price their offering dirt cheap. That's fine. But most consumers will want to find a happy medium between the quality of service Vs. the cost.
Or to phase that another way: There is a lot of spectrum. But very little spectrum that is suitable for mobile phone usage. When a resource is finite and valuable, it gets expensive.
If you want a "real" solution that would allow startups to play in the ballpit? Pass new national laws which split the cellular companies into two organisations, one that offers consumer services, and another which exists to maintain/install/upgrade the physical cellular network (and who then resells access).
It actually makes little sense to have competing and exclusive cellular infrastructure. The infrastructure should just be like a public resource, like a road, and the cellphone companies should be like shipping companies, utilising a public resource (the road) to sell a service (shipping stuff).
I'd be all for the government using eminent domain to seize every single cellphone tower in the country, and then reselling access to them to every cell phone company equally. But it isn't very capitalist...