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Tom Hazlett's papers are a good introduction into the orthodox view of spectrum economics: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1583098.
Low-value broadcast television is a by product of auctioning spectrum and maximizing profit. If something is a public good, it isn't in the publics good to maximize the profit. The fitness function of the whole thing is flawed. In what measure of efficiency does the duplication of poor cellular service and capability rank? How far into the future will such byzantine structures exist?
Broadcast television spectrum wasn't allocated by auction. It was allocated by government bureaucrats deciding what was most important.
> If something is a public good, it isn't in the public's good to maximize the profit.
It's in the public's interest to maximize the economic revenues generated from the resource.
In order for a bidder to offer the highest bid, they have to be providing the cheapest or best service, otherwise they can't afford the bid.
I could see if the FCC were auctioning off the entire spectrum you could get into trouble, but if they are auctioning off parts, then there is competition and those offering the highest value to customers can afford to pay the most.