I get your sarcasm in that you clearly seem to think that everyone just wants to lock everyone else in differently, but at least, the other envisioned use for this spectrum was, in fact, similar to WiFi today. Unlicensed use by spec compliant devices.
I don't think you can reasonably argue that 2.4ghz/5ghz wifi would have been better off being auctioned off.
In fact, wifi would be even better had it had more spectrum to work with.
It seems like such a hands off approach to spectrum that is meant to cover a larger area could lead to a situation where it's defacto assigned to whoever deployed in an area first, because deploying additional infrastructure makes no sense due to congestion.
Ideally, the FCC. By licensing the spectrum to smaller providers with guarantees for service (e.g. we connect X customers in Y years or forfeit the license) and at very affordable rates (or free).
Except the new management at the FCC doesn't seem to be at all concerned with making things better for the average citizen...
Spectrum auctions were a good model when the FCC started doing them. Today we have the technology for devices to mediate spectrum use among themselves (maybe following very high level regulatory guidelines). To use an analogy: you don't "allocate road" to cars. You let drivers figure it out themselves against a background of rules for dealing with conflicts (e.g. Right of way).
Who are these people, who might "help free people from the iron grip of broadband non-competition"?