There is nothing natural about a monopoly (or in this case, oligopoly) ordained by government. And that is the problem that should be addressed directly. Current government policies create an absurd amount of artificial spectrum scarcity.
Edit: Obviously I wasn't clear here -- I should have been straightforward rather than going with a clever turn of phrase. I meant to say, as a point of accepted definition, that government-granted monopolies are not 'natural monopolies.' Natural monopolies are monopolies that occur 'naturally' in the market because of conditions or extreme capital requirements.
http://en.wikipedia.org/wiki/Coercive_monopoly
[Edited]
We may just be disagreeing to disagree at this point. I'll let you have the last word here.
This is a one-sided description and a false dichotomy. A non-regulated natural monopoly can be just as suppressive as a government enforced-coercive monopoly. A regulated natural monopoly does not also require the creation of a government-enforced coercive monopoly.
The inefficient private solution stayed the adoption of a publicly administered one.
Municipalities also have natural incentives to provide sweet-heart franchise agreements -- it's generally too expensive to do otherwise once the infrastructure is in place, often partially subsidized.
http://en.wikipedia.org/wiki/Natural_monopoly
And that is the problem that should be addressed directly. Current government policies create an absurd amount of artificial spectrum scarcity.
Liberalizing spectrum allocation policy -- or opening the airwaves to anarchy -- wouldn't solve the problem that wireless telecoms is a very strong natural monopoly.
Regulation of this sort is the same as partial nationalization, and has the same effect to a measured degree. When people anticipate that the returns on their winning bets will be 'moderated,' or that they will have to set business policies for the 'greater good,' they will in the future make less risky bets or put less capital at risk.
Natural monopoly. Not the same thing.
The cellular industry has seen massive consolidation and reduction in consumer choice over the past 15 years -- the existing 5 national wireless carriers (AT&T, Verizon, Sprint, T-Mobile, U.S. Cellular) are comprised of literally hundreds (if not thousands) of formerly independent regional carriers. Cingular itself started as a conglomeration of 100+ regional carriers, before a few more mergers made Cingular into the new AT&T.
This is not a particularly strong testament to consumer choice and competition in the face of a natural monopoly.
So can I have the right to broadcast my own GSM signal in the 900 MHz range, or a perpetual sweet-heart franchise agreement with my local municipal government to run last-mile internet to my neighborhood's houses?
These are natural monopolies we're dealing with. My options are constrained to carriers that have been granted guaranteed access to public airwaves by the FCC. The carriers then use technical (carrier locks), legal (contracts), and social (difficult cancellation processes) means to lock consumers in.
The carriers then collude with handset makers to restrict consumer choice further by locking handset features, and restricting the applications that they run. There are ways around this (such as buying third party unlocked, unrestricted phones), but carriers and handset makers leverage their government-backed market position to discourage consumer adoption.