The historic transformation of the U.S. telecommunications marketplace is now well documented. In less than 20 years, we have gone from a nation dominated by landline telephones to a land of the Internet and ubiquitous wireless services.
The vast majority of U.S. consumers have access to mobile broadband service, most of whom have their choice of four providers – AT&T, Sprint, T-Mobile or Verizon. Unbeknownst to the large swath of data and video-dependent wireless consumers, however, much of this mobile service remains vulnerable if policymakers in Washington fail to advance legislation that addresses a very real “data crunch” occurring today.
Wireless phones operate on a finite resource known as spectrum. These are the pathways that transmit data and ever-increasing amounts of video and facilitate the wonders of our smartphones. But these airwaves are spread too thin – wireless networks are at or near capacity due to the historic rise in wireless users (from 50 million in 2009 to over 200 million in 2014). We cannot create more spectrum, we can only reallocate it or allow shared use of it.
In 1993, twenty-two years ago this month, Congress authorized the FCC to sell spectrum through auctions, all of which have led to massive amounts of money flowing to the Federal Treasury, as well as making spectrum available to consumer-driven wireless companies. Earlier this year, a government-held auction amassed nearly $45 billion. But the transferring of this or any spectrum is not easy: it takes an average of thirteen years to get useable spectrum to consumers from start to finish.
Even with a full slate of legislative priorities this fall, Congress is also looking at bipartisan legislation that would help bring more spectrum to the marketplace, in particular from the federal government, which owns as much as 70 percent of useable spectrum. There are rumblings that legislators could use the appropriations or budget process to require the government to sell or share what they are not fully using. That is an important priority, and one that Congress should unquestionably take up as soon as possible.
As former Federal Communications Commission Chairman Julius Genachowski (Democrat) and Commissioner Robert McDowell (Republican) recently pointed out, “though Congress has many other issues to handle, it can still advance a pro-growth spectrum policy this year to ensure America’s emerging Internet-of-things economy doesn’t stall.”
And while many issues in the telecommunications industry remain highly partisan – from the net neutrality debate to the extent to which the government should help promote “competition” through special programs – this is an issue both parties at least seem to agree upon. While it is no surprise that Republicans would like to open up the market, it is welcome news that Democrats are also saying the right things. Just this week, in an interview with Politico, Democratic Senator Brian Schatz of Hawaii said, “there is both enough spectrum to be reallocated and enough revenue on the table that if we make an arrangement where some of the revenue generated is provided to the Department of Defense in order to alleviate sequestration, then there’s an opportunity for everyone to benefit here.”
Like most things government-related, the process is challenging, especially since the Department of Defense (DoD) owns much of this spectrum. But other agencies also own spectrum, and they depend much less upon the airwaves as an essential resource. Two examples are the U.S. Mint and the Department of Labor. Congress must advance policy that incentivizes non-DoD components to part ways with what they do not need, and collaborate with the defense community to find ways to share what they both need. There is likely enough spectrum to go around, but we must be creative. The Feds, for their part, would rake in significant revenue, money which could bolster budgets or even pay down the debt. But it must move quickly.
As Citizens Against Government Waste President Tom Schatz recently wrote, “any delay in making more spectrum available could adversely affect the nation’s ability to retain its leadership in advanced technology as well as slow down mobile data traffic.”
Congress should do its part to move forward on a pathway that brings more of what consumers need – spectrum – to the marketplace.
Christopher D. Coursen is founder of The Status Group. He formerly served as Majority Communications Counsel for the Senate Commerce Committee and Advisor to the Ronald Reagan and George H.W. Bush Administrations.