NCPA - National Center for Policy Analysis

The Spectrum Crisis Is Upon Us

July 1, 2013

Now that most Americans have smartphones and tablets, which consume dozens of times more wireless data than traditional cellphones, demand for spectrum is quickly outstripping supply, and many fear that consumers and our economy will soon suffer, says Brent Skorup, director of operations and research for the Information Economy Project at George Mason University School of Law.

To combat ever-expanding consumer demand for wireless, many scholars and policymakers are considering the spectrum possessed by federal agencies, which hold half of the most valuable bands.

  • Scholars and government auditors agree: Federal agencies use their spectrum poorly.
  • Because agencies have no cost pressures and don't economize spectrum use, President Obama directed regulators to find 500 megahertz of spectrum for mobile broadband by 2020.
  • Economist Coleman Bazelon estimates that much spectrum would fetch nearly $100 billion at auction, and experts point to ancillary benefits of over $1 trillion if we can make more federal airwaves available for commercial use.

There are two problems with reclaiming federal spectrum.

  • First, there is no effective process to compel federal agencies, like the Department of Defense, to relinquish spectrum.
  • Second, federal users don't pay market prices for spectrum, which results in inefficient use and billions of dollars of value wasted annually.

There are proposals out there, however, for freeing up spectrum that are worth considering.

  • To expedite the process of auctioning off federal spectrum, Sen. Mark Kirk (R-Ill.) and Rep. Adam Kinzinger (R-Ill.) have promoted a bill to "BRAC the spectrum."
  • BRAC, the Base Realignment and Closure procedure, is a 1988 law that accomplished the politically difficult task of closing hundreds of military bases.
  • BRAC-ing the spectrum would entail the congressional creation of an independent commission of experts with the authority to clear federal users out of their spectrum.
  • That spectrum could be auctioned off within a few years, using proceeds to move the federal systems to other bands, with the remainder going to the Treasury.

There is also a proposal to create a General Services Administration-like (GSA) agency to control federal spectrum. The GSA owns federal real estate and buildings, which it leases to agencies; likewise, a similar proposal would accomplish the second goal of making federal users pay fees for their spectrum and encourage smarter uses.

Source: Brent Skorup, "The Spectrum Crisis Is Upon Us," The Hill, June 20, 2013.


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