The UK government hopes to pocket at least £78m from the proceeds of a spectrum auction for broadband wireless local loop licences, but has ignored all the advice from the industry in going ahead with the scheme.
Such proceeds are small beer compared to the £22.5bn jackpot it received from auctioning third-generation (3G) licences earlier this year, however, although the potentially damaging effects could still be the same.
User groups predict that service prices will rise and that coverage for areas off the beaten track will be poor or non-existent if the bids hit the funny money stakes. But the Department of Trade and Industry chose to carry on regardless.
Within 24 hours, however, the UK's premier fixed wireless operator, Atlantic Telecom, said it would not take part.
Admittedly, Atlantic is already flush with spectrum licences to operate in the lower frequencies, so it is reasonable to ask why it would want to pay up to £4m apiece for any more. But its refusal to play ball dents the credibility of the auction.
This has not dissuaded the Germans, however, who managed to top the UK's 3G licence windfall with a total value of £31bn in bids. But the money markets are beginning to worry about the implications of such profligate spending and have started marking down telcos' credit ratings.
3G auction and free calls
The situation does not seem to have worried Italy, however, which is pressing ahead with its own 3G auction. Bidding is due to start in October, at the same time as the UK's fixed wireless sell-off.
But the potential pain for Italian consumers has been mitigated somewhat. Shortly before the Italian timetable was announced, voice and data service provider Tiscali launched a free internet telephone service for users of its Flatzero internet access offering.
Tiscali claims that this is the first European service of its kind, and while users will initially only be able to make free domestic calls, it may be extended to international calls over time.
The firm's claims may warrant closer examination, however, because in the immortal words of BT's Sir Peter Bonfield, there's no such thing as a free phone call.
And whether service providers buy or build their own networks, it all costs money - especially where BT is involved.
This truism was something that Freeserve discovered when it launched its new asymmetric digital subscriber line (ADSL) service, for which it will charge a meaty £40 a month plus a £150 installation fee.
The fee has already been slammed as being too pricey for most consumers to consider: a view that Freeserve appears to confirm when it admits that the £35 it has to pay to BT per ADSL line will need to fall before a mass market for the service is likely to develop.
Building networks of any size is not cheap - a fact that is sure to dog 3G service providers already having to foot their respective spectrum licence bills. Buying a network, if it's anything other than raw fibre between major cities, can also clean out the coffers.
How much is a network worth?
One of the problems telcos face is how to determine what is a fair price to pay. This issue is an old chestnut, especially when it relates to networks that customers use as opposed to simply a network node or a point of presence.
So it would appear that regulatory action is needed. A case in point is Oftel's recent bludgeoning of BT into providing fixed-rate prices for internet service providers that use its cables, instead of per-minute billing.
But if the packetised, always-on world that we are constantly promised is to become a reality, the pricing issue will only become more acute. ADSL, for one, is currently being charged for at a flat rate instead of for connection time.
But ADSL providers could well find out that flat-rate fees simply attract power users who stay online indefinitely and swamp the system with their traffic.
Problems here are partly caused by the inability of current systems to scale to the required levels, and as such require money to be thrown at them. But one potential solution could be to charge users for the traffic - that is the packet-count - that they pump into the network.
Greedy users who clog the pipes would be penalised with a whacking bill, but one which is fairly determined by the amount of traffic carried, rather than by uptime.
But implementing such a scheme would require complex and sophisticated kit that, in itself, would add to the cost of providing services. So the promise of cheap, next-generation communications based on the internet model seems more hollow than ever. And that goes for fixed wireless access as well.
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