CNN started a weeklong series today on the spectrum crunch. What I found interesting was the number of comments to the first post. In a way, I wanted to say, “I told you so.”

My cursory review of the comments found that consumers had no sympathy for disciples of 4G. Customers who swore that they only used their phones to (shudder) make phone calls were critical of consumers who spent too much time on the networks posting pictures, texting, and socially networking with friends that for half the monthly subscription price they could have lunch with.

I, along with one other commenter I read, raised the issue of this is what you get when you are afraid of consolidation. I repost my comment to CNN here for your review.

Slowing down inevitable price increases can only come about in one of two ways. The first way is unacceptable, which is to regulate prices. Wireless access to broadband, while increasingly important for commerce, is not a utility. Additional regulation in wireless will bring about greater inefficiencies in terms of service delivery. Wireless firms would have to create new service niches in order to subsidize rates for consumers who could otherwise not afford increased prices.

The second option is to allow more consolidation. Consolidation creates the economies of scale necessary for keeping rates down. Economies of scale means lower cost per unit of service provided. Bigger firms help to deliver this type of scale. This is why denying the AT&T, T-Mobile merger was a big mistake.

The Minority Media and Telecommunications Council’s Latoya Livingston wrote an insightful blog post on how increasing available spectrum can help entry into the digital economy. Check out her post here.

Ms. Livingston’s article raises two important points. One, why is the FCC afraid of allowing a market strategy such as consolidation do the work that it is not equipped to do? Second, why does the FCC not recognize that growth in the wireless sector does not necessarily mean having a certain number of carriers in the sector?

If you want wireless services produced and distributed at lower costs, you need to allow for scale whenever possible. As wireless services improve with the additional spectrum, entrepreneurs will bring innovative products that enhance the use of wireless networks.

It’s okay to let the market stumble and find itself. We can’t afford to have the FCC trying to hold the industry’s hand every step of the way.

HR 3630, the payroll tax extension, passed the House by a vote of 293-132 and the Senate by a vote of 60-36. The measure now goes to President Obama for his signature. While the bill lets AT&T and Verizon bid on broadcast television spectrum given up voluntarily, the FCC will have flexibility to add terms and condition to spectrum obtained by the two largest carriers.

It looks like Congress may be headed to signing off on a payroll tax extension. Unfortunately for broadband consumers, the package includes allowing the Federal Communications Commission the flexibility to impose on large carriers, such as AT&T and Verizon, conditions designed to ensure competition should carriers win bids for broadcast spectrum.

Allowing larger companies to bid is the appropriate approach this legislation should take. I’m still not comfortable with a regulatory agency creating conditions that ensure competition. If those conditions were to give Sprint and T-Mobile, two companies that have taken mismanagement to a new level, some additional advantage, you may as well keep more efficient and better managed carriers from bidding for spectrum.

Bruce Mehlman points out in recent blog post that the FCC cannot have it both ways. It cannot label an auction process as competitive and then support an egregious barrier to entry by allowing some companies to bid on spectrum and leaving others on the sideline.

A participant in a free market enters with a willingness and ability to sell or buy goods and services.

Should spectrum go to the entity indicating through the highest bid, that they have the capacity to purchase and use spectrum?