David Goldman at CNN correctly pointed out in February that America is running out of the wireless spectrum needed to fuel our growing use of high-speed wireless Internet. He suggests next year we’ll go from spectrum surplus to spectrum deficit. Unfortunately, in recent years the FCC has impeded wireless operators from getting the spectrum they need to serve us, the American public.
Spectrum being a finite resource, there are three ways to get more spectrum for high-speed Internet access. First, unused spectrum can be allocated. Second, spectrum in use for other purposes can be reallocated for Internet access. Third, spectrum already used by wireless operators can be bought, sold, and traded for more efficient use. On all three counts, the FCC is in the way.
To know whether the FCC has managed to get idle spectrum in use, all we have to do is look at the “D Block.” When America switched from classic analog television to the new Digital TV, we could have just sold off the old spectrum at auction, getting it where public demand is highest. Instead, the FCC chopped the spectrum into blocks and applied restrictions to various blocks.
Some blocks sold anyway, but not the D Block. The restrictions made the spectrum unappealing in the marketplace. When the government has put the D block up for auction, not once has the reserve price been met. So as we face a spectrum shortage, the D block sits. That’s regulatory failure.
What about taking spectrum in use otherwise,and making it available for wireless Internet? That is happening, but not because of the FCC. We will create incentives for television broadcasters to auction their spectrum because the House of Representatives included the plan in a tax deal made with President Obama and the Senate.
There’s also the story of LightSquared. The FCC dragged out this saga for months, keeping open the question of whether LightSquared’s satellite spectrum could be used for terrestrial wireless despite de facto use of that spectrum by GPS. The FCC ruled against LightSquared in an opaque process, one that Senator Chuck Grassley has questioned. Why is the FCC keeping the process secret by refusing to answer the Senator’s questions, instead of working with the Congress to find a solution for everyone?
The FCC fails to get open spectrum in use, and has no role in opening other spectrum for wireless providers. What about allowing industry to reconfigure for maximum efficiency? Sadly again, the FCC is an obstacle. The two largest wireless providers in America, who have the widest service area covering the most Americans, and the greatest ability to provide universal access, have both been stonewalled by regulators. AT&T attempted to solve its spectrum shortage by dealin gwith T-Mobile and Qualcomm, but was frustrated. Verizon now has a deal with a group of cable providers. The plan quickly got put on pause by the Commission.
Spectrum is a fixed property of nature. We can’t grow, manufacture, or import it. We can only reallocate it. Every chance the FCC has had to reallocate spectrum to alleviate America’s coming spectrum shortage, it has failed to serve the best interests of the public. That’s a shame, because wireless Internet is an attractive way to get high-speed access down the “last mile” to American homes.