Opinion

The looming government spectrum scandal

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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.

What’s not to love about America leading the world in wireless competition, investment, 4G LTE deployment, mobile-data usage, and innovation? Well, some wholly unnecessary dark clouds now loom on America’s long-term wireless horizon.

Critical to America’s wireless success has been the 1993 bipartisan law that fundamentally changed federal spectrum allocation policy from the government deciding who got to use what and how much spectrum, to market forces deciding in public spectrum auctions. This policy change helped ignite a ~3,000% increase in U.S. wireless subscribers over the last two decades.

The resulting steady and relatively predictable flow of government spectrum being freed up for public auction over the last twenty years led to 80 FCC spectrum auctions that generated over $50b for the taxpayer and an estimated $500b in economic value for the nation according to the FCC.

What’s profoundly changed is now the government is signaling that that this steady flow of spectrum for auction upon which the industry has been built, will abruptly be turned off after the currently inadequate amount of spectrum in the auction pipeline is exhausted.

Essentially the government is signaling two very big changes for the wireless industry long term. First the government apparently is now unwilling or unable to free up more government spectrum long-term for auction per the 1993 law. Second, the government effectively is changing U.S. spectrum policy long term from market forces allocating spectrum via public auction, to the pre-1993 policy of government deciding what spectrum goes to what purpose.

So where is the looming spectrum scandal?

Did you know there is still no coherent U.S. policy that recognizes spectrum as a valuable scarce resource critical to growth and competitiveness in the 21st century that should be put to its highest and best use for the Nation and the American taxpayer?

Did you know there is no modern “good government” management of this spectrum resource akin to that required by law for: land, buildings, money, personnel, energy, petroleum, gold, or telecommunications services?

Did you know there is no formal annual spectrum budget process in the executive or legislative branch, where government spectrum holders have to justify their continued use of their valuable spectrum, defend why they can’t share their spectrum with other bureaucracies, or why they can’t clear it for public auction?

Did you know there is neither a regular audit or accountability process, nor an OMB-level review — independent of the departments and agencies that control the spectrum — to verify that spectrum is being efficiently-utilized and not wasted?

Did you know the federal government is claiming that it can’t spare any more of its spectrum for auction when it controls ~85% of the nation’s radio spectrum suitable for wireless broadband, but only uses 1% of the nation’s energy; provides 8% of the nation’s employment; produces 12% of the nation’s GDP; and gets by with 30% of the nation’s land?

So why is this government spectrum scandal looming now?

This resource mismanagement problem has been festering behind-the-scenes for decades. It is a classic case of benign neglect by several administrations over several decades that had bigger and more urgent management problems to fix at the time. Moreover, our nation’s spectrum management system is built upon obsolete analog communications technology assumptions.

A potential government spectrum scandal is looming now because of Americans’ world-leading usage of all things mobile. This ravenous consumer demand for mobile bandwidth is on a collision course with an obsolete, ad hoc, byzantine, unaccountable and constipated Federal spectrum management process.

Apparently federal spectrum managers are hoping the public never notices that the government’s utilization of its valuable spectrum hoard is roughly 80 times less efficient than the private sector’s spectrum utilization.

It is also a looming scandal because the government has not consolidated civilian government spectrum use at the General Services Administration like it did for government telecommunications services over fifty years ago; or consolidated the disparate and often redundant spectrum allocations to the various military and homeland security services into much more efficient networks.

Simply, it will be hard to justify to independent overseers in a more open and transparent public process that none of these government spectrum holders can better utilize their spectrum or better share spectrum with their fellow federal entities.

Moreover, it will only grow more difficult and embarrassing to justify why a scarce resource that the private sector and American consumers badly needs for legitimate economic purposes cannot be supplied when it becomes increasingly clear to independent overseers and the public how relatively inefficient the Government’s spectrum utilization is.

In short, there is a looming government spectrum scandal because the government’s management process for this critical 21st century resource is obsolete, woefully ineffective, and a huge barrier to America’s long-term growth and competitiveness.

There is still time for the government to own up to this glaring ‘good government’ problem, get ahead of it, and become part of the solution not the problem.

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. Cleland served as Deputy U.S. Coordinator for International Communications and Information policy in the George H.W. Bush Administration.