Federal Communications Commission Interferes With Spectrum Reallocation, Harms Industry

April 25, 2013

When analog television broadcasts were ended in 2009 in favor of digital television signals, the Federal Communications Commission (FCC) opened a broad range of the wireless spectrum. With responsibility over regulating the wireless spectrum, the FCC promised that it would open the now unused portions of the spectrum to use by the wireless industry. To the dismay of the wireless industry, progress toward that end has been slow and must be expedited, says Steven Titch, a policy analyst at the Reason Foundation.

  • Growth of the U.S. wireless industry is being constrained by a shortage of available spectrum, as the increase in demand for mobile data requires a more robust wireless system.
  • As wireless traffic grows, consumers are likely to feel the effect as transmission speeds decrease.
  • Three years ago, the goal of reallocating the spectrum was set in the National Broadband Plan but no progress has been made toward holding the auctions that would distribute the frequencies.

One hold up is from broadcasters, who are being asked to give up valuable spectrum for less government compensation than it might be worth. While money can overcome this challenge, the FCC has created its own obstructions to reallocation by trying to create competition between wireless carriers and by trying to pick the winning and losing business models of potential spectrum recipients.

  • The FCC has proposed setting aside spectrum for new entrants or handicapping the auction process so non-incumbents can acquire spectrum at an artificial discount.
  • These actions are not necessary, given that there is plenty of existing competition for the spectrum and plenty of incentive for both incumbents and new firms to develop technologies that would expand access to wireless technology.

In order to move the process along, the FCC should abandon network neutrality conditions that seek to treat all data equally. The network neutrality conditions hamper an Internet service provider or wireless carrier that necessarily must treat some types of data different than others for the successful functioning of the network.

  • The agency should also stop giving preferential treatment to any technology for a particular portion of the spectrum, regardless of its promise.
  • If a technology is to succeed, the private market and private capital will support it without any need for interference.
  • The FCC should stand back from trying to regulate the spectrum itself and instead facilitate the auction of the frequencies.

Source: Steven Titch, "Spectrum Policy: Wireless Market Needs the FCC to Get On With Reallocating Spectrum," Reason Foundation, April 16, 2013.

 

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