Opinion

U.S. falling behind the world in auctioning broadband spectrum

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Scott Cleland
Chairman, NetCompetition
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      Scott Cleland

      Scott Cleland is Chairman of NetCompetition® a pro-competition e-forum supported by broadband interests and President of Precursor LLC, a research consultancy for Fortune 500 companies. He is author of the book: Search & Destroy Why You Can’t Trust Google Inc.

After long being the world leader in clearing government radio spectrum for auction and broadband use by private sector consumers and businesses, the U.S has quickly fallen behind the world in getting this most valuable 21st century natural resource into the hands of those who most need and value it.

Germany and Spain have auctioned ~50% more spectrum for broadband than the U.S., France ~40% percent more, Italy and Japan ~30% more, and the UK will soon have auctioned ~50% more as well. Specifically, the U.S. has auctioned ~410 MHz, Germany ~615, Spain ~600, France ~560, Italy ~510, Japan ~500, and the UK ~600.

Auctioned spectrum is critical to American competitiveness because radio spectrum is the essential fuel of the mobile technology revolution of smart phones, tablets and the Internet of Things, and because in the U.S. the federal government controls a staggering 85% of this scarce resource.

Other leading economies clearly have grasped and responded to the urgent need to auction more government spectrum, because they appreciate data demand is relentlessly ~doubling annually. The U.S. government, in stark contrast, has auctioned no new spectrum in the last four years and has signaled it won’t be auctioning any more government spectrum in the future! That’s not just falling behind, that’s giving up.

Ironically, the Federal Communications Commission has been obsessively measuring the extent to which it believes U.S. private sector broadband deployment is falling behind the rest of the world, while it apparently has ignored measuring or tracking whether or not essential government broadband policy actions necessary for broadband deployment, like auctions of government spectrum, are falling behind the rest of the world.

Any public-private partnership depends on both sides fulfilling their essential responsibilities, and the U.S. government has recently become an extraordinarily poor steward and wasteful manager of this essential 21st century natural resource.

Why has the U.S. gone from leading to falling behind?

Simply, the last four years have experienced a stark communications policy reversal from the previous sixteen.

From 1993-2008 the federal government encouraged market-based wireless auctions, competition and secondary market transactions. The last four years the government has discouraged market-driven wireless competition by: regulating existing spectrum with common-carrier-like net neutrality and roaming regulations, and favoring FCC allocation of no-revenue unlicensed spectrum for the benefit of Silicon Valley over the auction of new spectrum licenses for the benefit of taxpayer.

What’s the big wireless policy difference between the last four years and the previous sixteen?

The previous sixteen were focused on increasing spectrum supply, while the last four have focused on limiting auction-able spectrum supply, in order to justify more government intervention, regulation and control. Consider the evidence.

First, the FCC threatened to reclassify unregulated broadband services, including wireless broadband, with obsolete Title II common carrier telephone regulation.

Second, the FCC actually mandated preemptive net neutrality regulation in the Open Internet Order.

Third, the FCC mandated common-carrier-like, data-roaming price regulation of wireless broadband.

Fourth, the FCC/DOJ blocked AT&T’s attempt to buy T-Mobile for its spectrum and signaled that T-Mobile could not sell its spectrum to Sprint either.

Fifth, when under the FCC’s secondary market rules, Verizon bought 20 MHz of fallow cable spectrum, the FCC forced Verizon to sell a substantial amount of its own existing spectrum and purchased spectrum to T-Mobile as ransom for approval.

Sixth, a Presidential advisory committee, PCAST, recently advised that the federal government should not auction any more of its 85% share of broadband-grade radio spectrum, and recommended instead that the Government should “share” its spectrum with the private sector, while maintaining ownership and control over it — as a back door way to impose wireless net neutrality over Congress’ and the court’s objections.

And finally, the FCC appears to be planning to reinstitute formal spectrum caps that the FCC ruled an unnecessary duplication of antitrust law a decade ago.

In sum, the federal government’s obsolete regulation-first-mindset has America falling quickly behind the world in auctioning government spectrum. The U.S. Government has an abundant supply of spectrum available to auction, if only they didn’t hoard, mismanage and waste it.

There is no way the Government can justify hoarding 85% of broadband-grade spectrum when the Government only uses 1% of the nation’s energy, 30% of the nation’s land, and 8% of the nation’s workforce, or when all government public safety personnel can get by with just 20 MHz — the equivalent of 1% of the government’s auction-able broadband spectrum hoard.

Moreover, the federal government’s position that it can’t spare any more spectrum for auction is ridiculous on its face, because Germany, Spain, France, Italy, and Japan, all already have.

Furthermore, America’s mobile computing competitiveness and leadership is at risk if the federal government isn’t competitive or a leader in auctioning more Government spectrum.

Scott Cleland is Chairman of NetCompetition® a pro-competition e-forum supported by broadband interests and President of Precursor LLC, a research consultancy for Fortune 500 companies.