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Can Dish Blow Up the Spectrum Market?

I have written about wireless telephony for many years now, and this claim of spectrum's inherent value and scarcity is a con. It takes billions of dollars of investment to make spectrum valuable, to produce a service with a nationwide footprint. This is over and above the cost of buying the spectrum from the government. It's supposed to be public property, not private.

Meanwhile, a WiFi system just requires radios that transmit on the licensed frequencies. Current standards let you create a 100 Mbps network in the comfort of your own home for about $60. That's 10 times the bandwidth commonly available 10 years ago.

Also, innovation continues inside WiFi. This week Sonos delivered new speakers that integrate with all your music sources through WiFi, notes TheVerge.

There are many things equipment makers have done over these 10 years to make this happen. They have improved encoding technologies. They have gotten more spectrum, in higher frequency bands, and combined the bands for use by their equipment. Lower-power radios mean smaller cells and more re-use. It's much more efficient to make these improvements from the network edge than at its center. That's another way of saying it's a lot cheaper to buy a new WiFi router than upgrade a nationwide network.

This is a truth of the market; it's science and economics. Ergen is threatening to make this plain to everyone unless someone lets him in on the oligopoly, unless he's given a seat at the table. Google, Microsoft and the makers of WiFi routers all plan to point this out as the FCC proposal moves forward.

But you already know.

At the time of publication the author had a position in MSFT and GOOG.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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