The FCC appears to be headed in the direction of auctioning off airwaves to bidders who agree to offer “free” national wireless services. Imagine that—companies are going to pay for airwaves and then make them free. Well, of course they aren’t. They are going to subsidize the “free” services with something else—maybe it will be advertising, maybe it will be a cross-subsidy from a premium they got on the airwaves but they aren’t devoted to the free service.

Either way, the FCC shouldn’t be deciding on the business models for the Internet or anything else for that matter. Lots of smart investors and entrepreneurs have placed the wrong bets on business models for the Internet. Fortunately, the markets make them bear the costs of their mistakes and others to come up with better models. The Internet economy needs flexibility, not FCC imposed sclerosis.

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