Wireless communications have improved the lives of millions of people across the United States and the world. However, the rapid expansion of wireless services has brought growing pains: The electronic spectrum on which most communications are broadcast is a limited resource that is quickly filling up. In the United States, the Federal Communications Commission regulates the spectrum and how these frequencies are distributed.
Wireless Spectrum Underutilized in the US
Wireless spectrum in the United State is far less utilized then spectrum in other countries. According to the Technology Liberation Front, British consumers have 3.5 times the available spectrum as Americans; Japanese consumers have around 2 times as much. This growing lack of spectrum capacity has emerged due to the slow issuance of new spectrum by the FCC through competitive auctions and Congresses interference in voluntary transfers of broadcast spectrum.
Government Attempting to Move Away from Successful Auction System
The competitive auctioning of wireless spectrum, when it has been allowed by the FCC has been an effective process; allowing for the creation of what is a thriving, competitive telecom market that gives U.S. consumers a wide array of products at reasonable prices. The next spectrum auction, expected to take place in 2014, will distribute portions of low-frequency spectrum that are highly valued by telecom companies. Currently, a large portion of the spectrum that is suitable for auction between 400 MHz and 3 GHz is held by the government and the FCC has been slow to issue the largely underutilized spectrum.
Despite the success of the competitive auction system, the Justice Department recently released a filing that strongly suggested to the FCC that it create new auction rules to ensure that all companies receive their “fair share” of wireless spectrum in the upcoming spectrum auction. “The Department concludes that rules that ensure the smaller nationwide networks, which currently lack substantial low-frequency spectrum, have an opportunity to acquire such spectrum could improve the competitive dynamic among nationwide carriers and benefit consumers,” wrote the Justice Department in the filing.
The new auction rules proposed by the Justice Department would effectively steer the new spectrum away from the two major networks of Verizon and AT&T, while providing the valuable spectrum space to smaller national networks like Sprint and T-Mobile. Both Verizon and AT&T have voiced their concerns that the FCC’s new auction rules could result in a caps being placed on how much spectrum one provider could purchase, limiting their participation in the auction.
Reports Find Government Disdain for Market-Driven Auctions
Critics of the recent changes to the spectrum auction have noticed a trend towards increasing government control over the auction process. A Daily Caller piece pointed out that numerous DOJ and FCC filings have demonstrated a distaste for market-driven spectrum auctions and a preference for increased “preemptive and interventionist wireless regulation.” The Caller article points to two reports: the first, mentioned above, denies new spectrum to the largest providers; the second, its annual wireless competition report to Congress, refuses to acknowledge the successful private deployment of broadband.
Broadband development across the United States has been robust, creating wide internet availability at affordable prices. The market based system does not need reform; government control of the spectrum would undermine what has been a very successful system. The government has already badly botched the release of unused spectrum, slowly releasing usable spectrum while hoarding some of the best for itself.
