Win-Win: Faster Internet & Billions of Dollars for Government

A win-win from Congress is a refreshing change of pace.

That’s exactly what Congress gave the American people in mid-February when lawmakers included authorization for the auction of new wireless spectrum. The fair and open auction of unused broadcast TV spectrum will  meet the seemingly insatiable American appetite for wireless bandwidth,  provide billions in revenue to the U.S. Treasury, and create jobs.

Mobile demand is booming. When wireless networks can’t keep up, it’s not just a matter of slow-loading web pages on a smartphone. Dropped calls aren’t just an annoyance, but a risk to safety and security in some cases. The grades of online students may depend on a reliable wireless connection to the Internet. Patients recovering at home rather that in a hospital today  increasingly require constant wireless monitoring.

We depend on mobile apps for everything from banking to getting directions, evidenced by a download rate of more than a million apps a month worldwide. Tablets can use 120 times more spectrum than the typical cell phone of a decade ago. In 2011, the number of text messages increased by almost 800 percent over the previous year. There are more wireless subscriptions (insert the number of subscriptions here) – for our phones, e-readers, tablets, and GPS devices, etc. – than people now. 

By directing the Federal Communications Commission to auction off more spectrum for wireless use, Congress has opened the pathway to meet this growing demand and a fair and open auction will do much more good, as well. Importantly, Congress included a requirement that the auction be open and competitive for all qualified bidders. FCC rules limiting open bidding  in previous auctions led to market failures and cost the government billions in lost revenues.  Open bidding is a big win for consumers. It ensures that service providers will have a fair chance to get the resources it needs for better service for  existing and new customers. .

In addition, the value of a fair and open spectrum auction is not lost on Congress. Lawmakers expect that the auction will raise between $15-25 billion, much of which will offset the cost of extending unemployment benefits and the payroll tax cut.

Raising these funds will depend on the auction being open and fair.  In a study released just last month, Anna-Maria Kovacs of Georgetown University shows that when conditions are placed on spectrum auctions, revenue falls sharply lower than in auctions with no conditions. Dr. Kovacs shows the potential proceeds of broadcast spectrum can vary from $1 billion to $91 billion, based on previous FCC auctions that were open or conditional.

Her data also dispels charges that open auctions would favor only the large wireless companies such as Verizon and AT&T. In the past open auction of 2008, bidders serving less than 10 percent of wireless subscribers won 28 percent of the spectrum points of presence.

Spectrum relief can’t come soon enough for consumers and the American economy. The pace of wireless growth and innovation won’t slow. We need quick action by the FCC to deliver on Congress’s  strong message to the nation for  open and fair spectrum auctions.


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