Operators need to buy spectrum, usually from governments, in order to build their networks. How do governments price spectrum? They have an auction, so the guy who is willing to pay the most money is also going to get the most spectrum. Verizon won an auction back in 2008 for some of that invisible gold, but instead of using it to build their network, they decided to just hold onto it so that no other company could use it to compete against them. Now Verizon wants to sell the spectrum they bought in 2008 and buy some new spectrum from a consortium of cable companies. The FCC is furious at the idea. They want to know why Verizon bought spectrum just to take it off the market, and they also want to know how the spectrum purchase they’re about to make will impact the market.
Should you be surprised that a multibillion dollar company is acting shady? Not really, it’s just business as usual. Governments around the world have recently started selling spectrum with clauses attached. Take Germany for example. Anyone who bought spectrum in the 800 MHz band had to first deploy said spectrum in rural parts of the country so that folks who don’t have access to broadband can finally get connected. The spectrum that Verizon bought in 2008 had a clause that said it had to be used by June 2013. What would have happened if June 2013 had passed and Verizon hadn’t used it? We don’t know, but we would hope that the government would’ve simply revoked Verizon’s access to those particular blocks.
Will the sad state of affairs in America ever change? Yes, once penetration exceeds 100%. Just look at Europe, where you can get unlimited everything for less than $40 per month and have coverage pretty much anywhere you are. That’s because there’s so much competition. The way the game is currently setup in America, competition is limited, so it’s not as effective at causing rapid change, but just give it some time.