Consumers Need More Radio Spectrum

Alan Daley Writer, American Consumer Institute
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The need for more radio spectrum devoted to consumer use is obvious from the increasing demands that consumers place on wireless carriers. U.S. wireless providers carried 3.23 trillion megabytes of data traffic in 2013, up 120 percent from 2012, and that was up 69.3 percent from 2011. Most carriers are able to quickly put into productive use the spectrum they buy from Federal Communications Commission (FCC) auctions. Finding spectrum that can be auctioned is the difficult and slow part.

Both the Congress and the White House understand the need for more radio spectrum. In 2010, the White house urged the National Telecommunications Information Agency (NTIA) to find an extra 500 megahertz that could be auctioned for commercial uses. The unused and underused spectrum was to be collected from federal departments and agencies, TV stations and other users, and then transferred to the FCC for auctions. In some instances, the NTIA was to promote “shared use” of spectrum and $100 million in funding was earmarked for “shared use” research.

In 2015, Senator Rubio introduced a bill to transfer 200 megahertz from government use to FCC auctions. In a very carefully worded, defensive statement, the NTIA asserted that “Federal agencies have exclusive use of only 18 percent of the “prime” spectrum between 225MHz and 3.7GHz.” Taking that at face value, they have exclusive control over 624 megahertz in those “prime” bands.  Of their portfolio in 2012, the NTIA claimed it could find only 95 megahertz of government spectrum that was suited for auction.

Ninety-five megahertz is a good start. Indeed, 95 megahertz is twice the size of an FCC auction called AWS-3 auction that harvested $45 billion split between the TV stations, first responders and the cash-strapped Treasury. To arrive at its 95 megahertz estimate, the NTIA screened government holdings for spectrum suitability and whether the holding was exclusive-use (i.e. shared) or not. That process would result in an inventory that shows the nature and intensity of use for all of its spectrum, a head-start on the report card that CTIA has suggested be updated and made public regularly.

Underused TV spectrum was also supposed to be part of the 500 megahertz transferred into commercial wireless use. Following the AWS-3 auction, a similar 60 megahertz bundle of underused TV spectrum was scheduled for auction in late 2015 with proceeds expected to be near $60 billion. However, the broadcasters created a court challenge to that auction, questioning how to count viewers in the resulting re-packed channel lineup. The delayed auction is now expected to occur in mid-2016.

The 2016 auction proceeds may be reduced by the FCC’s decision to set aside a 30 megahertz block that neither Verizon nor AT&T can bid on. The FCC’s intent is to induce some smaller carrier to buy a viable mass of spectrum in city markets. Sprint has already announced it will not bid, so the 30 megahertz chunk could be easy and cheap pickings for T-Mobile, Comcast or Google. Time will tell if the spectrum is snapped up by the mega-corporations, whether it goes to an insurgent, and whether it earns a suitable price for the Treasury. Regardless, it seems that regulators cannot resist allocating huge chunks of spectrum to favored bidders who are “more equal” than others.

The next underused TV channel auction was supposed to be a re-allocation of 100 megahertz from broadcasting – a mere 20 percent of the promised 500 megahertz. The date is overdue for the auctioning of 95 megahertz that NTIA already admitted was surplus to government needs. All this means that there is huge demand for broadband wireless services, but shortages of spectrum needed to deliver those services.

So, what can be done? A public accounting for government spectrum and its uses would be in the public’s interest. That kind of information is what government is supposed to do well, and reliable inventory of potential spectrum for auction would promote rational planning by Treasury, by other government departments and agencies, by carriers and by those who want to enter the wireless service industry. Failure to repurpose this unused and underutilized spectrum would be a government failure and a major loss for consumers.

Alan Daley writes for The American Consumer Institute Center for Citizen Research, a nonprofit education and research organization.  For more information about the Institute, visit www.theamericanconsumer.org.