ring the original C auction.38 I therefore use $1.50 per mega- hertz POP as the long-term "equilibrium" price of spectrum. With current technology, a cellular licensee uses 30 megahertz POPs of spectrum for each potential person reached by its signal. Assuming that the industry can enroll a present value of 60 percent of the people it reaches and that these subscribers are shared by five national carriers, these 30 megahertz POPs of spectrum will deliver an expected 0.12 subscriber. Thus the licensee must purchase 250 megahertz POPs per expected sub- scriber. At a price of $1.50 per megahertz POP, the cost of spectrum is $375 per subscriber. Network Expenditures Between 1985 and the end of 2002, wireless service providers spent a total of $126.9 billion on capital facilities to deliver cellular services. 39 This is a simple sum unadjusted for inflation or depreciation. Some early facili- ties have obviously been replaced by now. In 2001-03 carriers spent $56.2 billion on capital facilities and attracted 49.2 million additional sub- scribers. 40 Thus they spent about $1,150 per additional subscriber enrolled, but a substantial amount of this expenditure was likely directed to upgrad- ing their network and replacing old assets. At most, the cost of building a (2G) network capacity at today's standards is likely $800 per subscriber. The Rapid Growth of Wireless Telecommunications Table 7-3. Market Values of Independent Wireless Carriers, December 2003 AT&T Wireless Nextel Sprint PCS Subscribers (millions) Market capitalization (billions of dollars) Long-term debt (book value in billions of dollars) Total market value (billions of dollars) Market value per subscriber (dollars) 1,986 2,843 1,428 Source: Company reports; www.finance.yahoo.com. a. June 2003 estimate. Customer Acquisition Costs Each carrier reports its current cost of acquiring customers through its marketing operations. In the second quarter of 2003, these costs averaged approximately $350 per new subscriber.4 In addition, the carriers must invest in ma