From today's FT:
Sir, A point buried in “Scrambled signal” (July 1), your excellent analysis of Europe’s telecom market, should not pass without some comment. Europe did indeed have a global lead on GSM in the 1990s.
But it is hard to see how the sector could have responded to the next wave of technological challenge from the US when, as the article notes, governments screwed €100bn out of the sector by rent-seeking spectrum sales. HM Treasury, if my memory is correct, was in the vanguard.
David Fisk, Laing O’Rourke Professor in Systems Engineering and Innovation, Imperial College London.
I hope he knows more about systems engineering and innovation than he does about economics, about which he clearly knows nothing. Every planned £1 of future spending reduced the bids by £1; so a) the price paid will not have materially affected total investment - it was planned investment which reduced the price paid; and b) on the whole, the telecoms companies are profitable and pay dividends.
Rather more worryingly, I did a quick Google search on "spectrum auctions" just to gen up, which led to Wiki, which tells us that the US government has collected about $60 billion so far in their various auctions.
Adjusted for exchange rates and population size, the US government probably collected as much as the European ones.
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