By Tara Seals

How would the competitive landscape change if the government no longer looked at wireless spectrum auctions as cash machines?

Things would be pretty healthy, actually, according to Rod Ullens, CEO at VoIP number provider Voxbone. “Mobility is defining telecommunications going forward,” he said. “But the regulatory attitude towards spectrum is hampering innovation and competition.”

Ullens argues that if spectrum were cheap enough for any provider to snag a bit of it, consumer choice would naturally explode, ending the almost monopolistic state of affairs we deal with today. He likens it to the CLEC model on the wireline side: “It’s easy to be a CLEC,” he said. “You sign up, pay some, but not a huge amount of money and get interconnected, and you’re in business.”

It’s a well-worn idea of letting those that “want to address niches are able to just that,” he added. And ultimately, that’s been good for consumers – and a good check to incumbents, who have been forced to consider a range of new-entrant threats on the wireline side. Result: a range of really innovative blended services and the snowballing embrace of IP and network migration, which translates into a proverbial rising tide. However, “that’s a model that wireless regulation prevents, because spectrum is prohibitively expensive,” noted Ullens.

Consider the 700MHz spectrum auction in the United States in 2008. While the goal was to establish a competitive nationwide carrier that could take on the hegemony of AT&T Inc. and Verizon Wireless, ultimately those two incumbents ended up the big winners, having the money to outbid everyone else. “Telecom is all about regulation,” Ullens contends. “Who wins the competitive battle boils down to who has won the regulatory ones.”

In fact, there are just four main facilities-based nationwide carriers in the U.S. The FCC has finally come to that realization (newsflash?), and in late August launched an official enquiry into the state of competition in the domestic wireless industry.

At issue is whether the control that Verizon Wireless, AT&T, Sprint Nextel Corp. and T-Mobile USA have is consolidated enough to negatively impact consumer choice and fair pricing. Senator Herb Kohl, chairman of the Senate Judiciary subcommittee on antitrust, says together they own 90 percent of the market.

The enquiry is looking into a variety of areas including spectrum, networks, devices, applications and business models. Meanwhile, a separate report will also determine the ease of entry for new players into the market.

One issue the FCC will be plumbing is handset exclusivity. In the past few weeks, rural carriers and associations have argued that the Big 4 have locked up access to high-end devices through exclusive deals, like AT&T with the iPhone, Sprint with the Palm Pre, T-Mobile with the G1 and myTouch Android handsets, and Verizon with the BlackBerry Storm. Often the big carriers don’t offer service in remote areas, leaving consumers there high and dry when it comes to the latest productivity tools.

Another issue under scrutiny is whether the big carriers are essentially price-fixing when it comes to services like texting, which has increased 100 percent in price within three years, to 20 cents per SMS message across the board.

These are concerns that extend globally. “In Europe they’re enforcing caps on roaming charges and SMS gouging,” said Ullens. “They wouldn’t have to do that if they simply enabled the market.”

The alternative? If governments stopped chasing the enormous amount of cash generated by such spectral bidding wars, more players could gain access to it. Simple premise, simple benefits. A cheaper price tag means less risk too. And, a more diverse collection of offerings for various consumer and business markets would spring into the market, presumably.

Of course, an MVNO model could also be used, but attendant to that are network control issues and congestion concerns. As the 3G wireless data crunch rolls on, it’s clear we need additional facilities, not more players using the existing ones.

“The spectrum access issue is one of the most important and interesting discussions to have in wireless right now,” Ullens contended. “We’ll see if regulatory bodies want to participate in it.”