Winning the Future with Radio Spectrum

April 6, 2011 - 0 Comments

At a White House event today, 112 economists — including Nobel Laureates, distinguished academics, and former government officials from both parties — presented a letter to President Obama on radio spectrum.  The message?

The President should support, and Congress should pass, legislation granting the Federal Communications Commission voluntary incentive auction authority.

In fact, the President’s economic team, and many Congressional Republicans and Democrats, are of the view that this new type of auction is the best path forward to transforming how we use radio spectrum in the 21st Century.  And there is broad consensus that the demand for mobile broadband is rising.  Cisco believes that from 2010to 2015, the United States will see mobile data rising by a factor of 26.

So, there is little controversy about the concept of voluntary incentive auctions, an idea that was born from the FCC’s analysis that it needed to find spectrum quickly to meet the sharply increasing demand for mobile broadband data.  Simply put, incentive auctions provide a financial incentive that allows incumbent spectrum holders to sell existing spectrum so that it can be repurposed for broadband.

The debate is now over the details. How much money would such an auction raise? How much “incentive” do you provide?  Can this voluntary mechanism provide enough spectrum to address the looming spectrum crunch?

Today’s letter makes it clear that the time is now to get those questions answered.  The stakes are too high not to do so.

Consumers, who want high quality data services and who are increasingly buying more and more mobile devices have a stake. So do businesses which depend upon mobile workers and wireless M2M in their future.  So do taxpayers, who should see a significant contribution to the federal treasury – the last significant auction of spectrum raised $19 billion.

This issue isn’t partisan. Market-based mechanisms like incentive auctions are the best way to allow radio spectrum to be placed to its highest, best use and to do so with a minimum of transaction costs.

Congress should move this item to the top of the agenda, and take action soon to give the FCC the authority it needs.

Can 112 economists be wrong? I don’t think so.

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