Free markets, not tinkering bureaucrats, should decide spectrum auction outcomes
America’s tech sector remains unrivaled around the world — a true bright spot in our otherwise stagnant economy. That’s the message I took away from the Consumer Electronics Show last week, where I met some of America’s best and brightest tech leaders and innovators.
For this sector to drive U.S.-based prosperity, Congress must pass spectrum reform legislation to end the FCC’s decades-long mismanagement of this vital resource. In short, mobile users need more spectrum. As Nobel Prize-winning economist Ronald Coase first demonstrated more than 50 years ago, the best way to allocate the nation’s airwaves is through free and fair auctions. That’s why the House Republican plan for voluntary incentive spectrum auctions is based on free-market principles. Our plan will help meet consumer demand, reduce the deficit, facilitate capital investment, increase job growth and encourage innovation.
However, just last week President Obama’s FCC chairman, Julius Genachowski, inserted himself into the spectrum debate, declaring his preference for excessive government management in the auction proceedings. Liberals continue to peddle the lie that government agencies are better at price-fixing and managing outcomes than free markets.
The truth is that the FCC, left to its own devices, routinely imposes unnecessary and harmful conditions on auctions. For example, look at the PCS C-Block and the 700 MHz C- and D-Blocks. In those cases, the FCC’s social engineering failed. It cost the Treasury billions and left valuable spectrum unused for years.
Instead of continuing the FCC’s failed central planning of spectrum, let’s level the playing field for real. All mobile providers should have the opportunity to participate in spectrum auctions. We know the auctions won’t be fair or efficient if the FCC uses the auction process to further its regulatory agenda.
Congress should never give carte blanche authority to unaccountable bureaucratic regulators so they can craft rules that will impact the economy to the tune of billions of dollars. Instead, Congress should give direction to the FCC to ensure that the auction is conducted in a fiscally prudent and economically responsible manner.
Auctions use the free market to ensure that spectrum is put to its highest and best use. Depriving bidders from participating in auctions or hamstringing bidders with unnecessary conditions like net neutrality do the opposite. The result would be less revenue, less innovation and less economic growth. Determining which entities can participate in an auction is tantamount to picking winners and losers in the marketplace, something neither Congress nor the FCC should do.
CISCO has reported that by 2015 there will be 15 billion network connections, more than two for every person on the planet. Instead of under-utilizing spectrum to serve a diminishing number of Americans, Congress should put spectrum to its most efficient and cost-effective use.
Even the FCC chairman has acknowledged that we face a “looming spectrum crisis.” The spectrum crisis applies to all wireless carriers. If Congress permits the FCC to unilaterally decide outcomes in an auction, Congress would be penalizing certain consumers in a micro-managed effort to provide greater bandwidth to other consumers. It would be unfair to the customers of companies who were excluded from a spectrum auction. All consumers should have the opportunity to benefit from upcoming spectrum auctions.
The solution to our spectrum policy is simple: put our faith in the free market, instead of big government, to help foster competition, growth and innovation. That was the core message at this year’s Consumer Electronics Show. Maybe someday big-government liberals and FCC bureaucrats will learn the value of relying on market forces, rather than bureaucratic assumptions.
Rep. Marsha Blackburn (R) represents Tennessee’s Seventh Congressional District.