Policymakers should be on top of the spectrum auction cash cow, maximizing the opportunities for … [+]
In 1993, Congress established the world’s first spectrum auction authority, empowering the Federal Communications Commission (FCC) to conduct bidding for radio frequency licenses. The innovation has exceeded expectations, earning Nobel prize recognition in 2020 and bringing $230 billion in revenue to the Treasury. The FCC has conducted over 100 auctions with the recent C-band earning more than a record $90 billion. These monies have been used for taxpayer relief, the FirstNet public safety communications network, and funding to the Department of Defense and other agencies.
Policymakers should be on top of the spectrum auction cash cow, maximizing the opportunities for market-based allocation and earning revenue for public coffers. After July’s 2.5 GHz auction, the spectrum pipeline is empty. Credit is due to FCC Commissioner Brendan Carr for raising the issue last year and Senators Wicker and Thune for asking FCC Chair Rosenworcel for its plan.
Spectrum auctions are a wild success; why are they not prioritized?
Not everyone is on the same page. Many policymakers think that Big Tech companies should get access to scarce spectrum resources for free. The 6 GHz proceeding was a giant giveaway to Big Tech; which had it been auctioned, could have raised at least $20 billion.
The rollout of licensed wireless services is disruptive to some established players in the broadband industry. If people can get their home broadband through the air, there is not a need to bring a wire through the ground to the office or house. The growth of fixed wireless access to more than 7 million broadband subscribers attests to this shift.
More largely, the Executive Branch under both parties has failed miserably to lead on spectrum strategy to optimize allocation for federal and commercial uses. The management of federal spectrum has changed little in a century with two-thirds of America’s airwaves held by agencies, many of which resist efforts for spectrum transparency and greater efficiency. Failing the needed Presidential leadership, Rosenworcel has taken the lead to rebuild a cooperative relationship between FCC and NTIA, the two agencies tasked with managing our nation’s spectrum resources.
What needs to be done
Congress must act quickly to reauthorize the FCC’s authority before it lapses on September 30, 2022; a short-term (12-18 month) extension should be enough time to build the spectrum pipeline, ensure the auction authority for the coming decade, and engage spectrum stakeholders.
Importantly the FCC’s authority needs to be clarified and protected from other federal agencies which attempt to hijack FCC auction and related spectrum activities. There are a litany of embarrassing incidents, including the recent, unseemly action by the Federal Aviation Administration (FAA) to demand that mobile operators delay the rollout of 5G indefinitely (even to ground planes) because of no standardized altimeters. The US failure made it a laughingstock compared to the likes of Japan, France, Norway, and some 50 other countries which rolled out 5G without drama.
The US needs leadership in both Congress and the Executive to modernize spectrum policy to reflect the needs of the US as one of the world’s leading wireless economies, which brings in hundreds of billions of dollars annually, millions of jobs, and connectivity to nearly every area of life. While the US has leadership in this domain, other countries – notably Japan and China – allocate more spectrum for commercial wireless services. If we take the so-called global competition seriously, it’s time for a spectrum policy meet this ambition.