The Daily Caller

The Daily Caller
A man stands inside a LED lighting drum, which is made up of more than 40,000 Samsung LED lights, at a Samsung Electronics Co showroom in Seoul January 23, 2014. Samsung Electronics Co Ltd posted its first decline in quarterly profit in two years, hit by one-off special bonus as well as slowing smartphone sales as it braces for a year of tougher competition with rival Apple Inc. Picture taken January 23, 2014.  REUTERS/Kim Hong-Ji (SOUTH KOREA - Tags: BUSINESS TELECOMS TPX IMAGES OF THE DAY) - RTX17RVM A man stands inside a LED lighting drum, which is made up of more than 40,000 Samsung LED lights, at a Samsung Electronics Co showroom in Seoul January 23, 2014. Samsung Electronics Co Ltd posted its first decline in quarterly profit in two years, hit by one-off special bonus as well as slowing smartphone sales as it braces for a year of tougher competition with rival Apple Inc. Picture taken January 23, 2014. REUTERS/Kim Hong-Ji (SOUTH KOREA - Tags: BUSINESS TELECOMS TPX IMAGES OF THE DAY) - RTX17RVM  

The least efficient part of government

Photo of Scott Cleland
Scott Cleland
Chairman, NetCompetition

Spectrum management is the least efficient part of the federal government.

That’s a big national problem because radio spectrum is the essential fuel of the mobile revolution of smart-phones, tablets, video streaming and the Internet of things.

The worst-resource management in the federal government unnecessarily burdens one of the most modern, dynamic and innovative parts of the American economy – mobile.

This is not a partisan issue, it’s a good government issue that badly needs fixing – fast. The status quo is indefensible.

Fortunately, Congress is listening.

The House Energy and Commerce Committee has asked all interested parties for input into how to best modernize U.S. spectrum policy as part of the committee’s broader legislative effort to update the Communications Act next Congress. Comments are due this week.

The inability of the federal government’s spectrum system to make available sufficient federal spectrum for auction, just to keep pace with skyrocketing mobile usage, threatens to become an unnecessary growth cap on the increasingly mobile-driven 21st century economy.

How did the government’s spectrum management system become the anachronism it is today?

It was designed for a bygone era – the analog 1900s, not the mobile broadband 21st century.

The obsolete 1992 law in question simply codified a 1978 executive order that established the National Telecommunications and Information Administration (NTIA), which only partially covered spectrum.

To put that in perspective, that means the federal government’s basic spectrum management approach predates the first commercialization of cell phones in the U.S. in 1982 – by four years.

At that time most all radio spectrum was used or controlled by government agencies with very little spectrum used directly by consumers or the private sector. That means that spectrum management was, and remains largely today, organized for the convenience of government agencies – not for the benefit of American consumers or the private sector.

The year after that 1992 law fossilized spectrum policy in the analog 1900s, Congress passed a provision in the 1993 Reconciliation Act that authorized spectrum auctions for about 120 MHz of spectrum for personal communications services. In perspective, that auction commercialized 4 percent of the most commercially valuable wireless spectrum between 400 MHz and 3 GHz.

That PCS auction catapulted wireless competition, consumer use, and growth forward. How much? The number of American wireless subscribers exploded more than 3,000 percent from 11 million connections then, to 335 million today.

Currently only about 15 percent of the nation’s choice spectrum suitable for commercial broadband is available to the private sector.

Unfortunately in the past few years, the government agencies that control the lion’s share of choice spectrum have largely refused to clear more spectrum for private auction. Their offer is to let the private sector “share” some of their spectrum scraps as second class spectrum citizens.

So why is spectrum management the least efficient part of government?

First, the system now can take 9-12 years to make spectrum available for auction. Contrast that with the speed of change in the private sector, where in less than seven years after the invention of the smartphone, about 200 million Americans use one of these new spectrum-hungry devices.

Second, there is no national policy that recognizes spectrum is a scarce valuable resource that must be put to its highest and best use for the nation.

Third, in the current ad hoc spectrum system, literally no one has the authority to ensure spectrum is efficiently and effectively utilized by the government.

Fourth, America’s spectrum system scandalously has none of the normal or standard government accountability processes – i.e., decision-making responsibility, budget, accounting, audit, etc. – that is required of every other valuable government resource like land, buildings, vehicles, personnel, money, telecom services, oil, etc.

Finally, it is obvious that no one is minding the government’s spectrum store because no one in government is requiring government agencies to share spectrum better among themselves.

The current claim of a “transformative” spectrum policy that promotes government-private sector sharing of spectrum is less a policy-improvement, and more akin to a policy-surrender to unaccountable government agencies who are unwilling to use their spectrum more efficiently so Americans may benefit.

America currently has a scandalously dysfunctional spectrum system that remains organized for the convenience of government agencies’ 1900s needs, not the 21st century needs of consumers, taxpayers and businesses, who need the spectrum as much or more than the government agencies do.

The bipartisan solution is simple – good government.

Like any other trillion dollar resource, someone must be responsible and accountable so that it is put to its highest and best use in both government and in the private sector, and also so that it is not vulnerable to waste, fraud and abuse like it is now.

Congress needs to update U.S. spectrum law to protect our nation’s mobile communications future. Without more spectrum available to the private sector, the mobile revolution of smartphones, tablets, video streaming and the Internet of things are at increasing risk of hitting an unnecessary wall in long-term mobile growth.

Congress must legislate to ensure that someone minds the nation’s trillion-dollar spectrum store.

Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, a research consultancy for Fortune 500 companies, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests.