es based on a "beauty contest," not an auction, but the United Kingdom put five licenses up for auction. With all the existing networks wanting to preserve their position and new bidders able to use this as a vehicle to enter the market, bidding was fierce. Winning bidders offered more than $100/pop for the license alone-the five British licenses together netted about $35 billion! Germany's auction, which followed soon afterwards, was similar, bringing in $47 billion. Figure 6.2 shows these bids and how they compair to others. This was good for the taxpay- ers, but the "winning" bidders soon realized that they had a huge monkey on their backs. Could they afford these licenses and the new networks that they were intended to support? Other countries' subsequent auctions did not net such incredible results, as the industry's hangover began to become obvious. The Netherlands held an auction that got relatively little response-there were enough licenses to go around for the incumbents, SO only about $2 billion was raised. Italy's auction raised only about a third as much as the United Kingdom's. The regulators' reaction? To investigate the bidders to see if there was collusion [6]. How could sanity break out when it was their turn to receive an insane windfall? "2.5 G" Technologies Suffice for Most Users The move to 3G mobile networking was not only stifled by absurd license auc- tion bids but by a more fundamental business reality: There was little demand for its services that could not be met more cheaply via other means. For the 107.2 Figure 6.2 Mobile license bids in several countries during the boom (copyright Elsevier Sciences). The Great Telecom Meltdown GSM network operators, 3G meant a whole new network: New frequencies with new base station radio equipment backed up with a new supporting infra- structure, supporting new terminals. North American TDMA operators recog- nized that their technology was at a dead end, and they generally looked to move ahead with the GSM world. CDMA operators had a more graceful e