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Winging It On Spectrum And Auction Authority, Congress Needs Mobile Wireless Comeback

From Forbes:

With more than one-third of Americans having a 5G subscription, the emergence of fixed wireless access, and the 5G-enabled Titanium Economy of advanced manufacturing taking off, spectrum policy experts gathered at an R Street Institute event on Capitol Hill to discuss the importance of refueling the spectrum pipeline and vesting long-term auction authority at the Federal Communications Commission (FCC).

FCC Commissioner Brendan Carr kicked off the event in a fireside chat with R Street Policy Counsel Jonathan Cannon, recounting the heyday of the prior administration, which put in place spectrum policies that are bearing fruit today. Former Chairman Ajit Pai’s FCC undertook a spate of 5G spectrum auctions, including the forthcoming 3.45 MHz and the record-breaking C-band auction, which grossed more than $90 billion. Additionally, siting and related regulatory reforms from that time helped to streamline the rollout process for infrastructure, breaking the flatline from just 706 sites set up in 2016 to more than 64,000 just two years later.

Contrast that action with today’s lull in spectrum policy – both at the White House and the Hill where Congress is close to letting the FCC’s spectrum authority lapse. Nor has it developed a rigorous plan for a long-term pipeline of new auctions, which is unthinkable should it expect the wireless economy to continue to grow. Moreover, neither the White House nor Congress seem interested to discipline federal agencies to clear government spectrum so that it can be put to its highest, best use and auctioned in a timely manner.

Scott Bergmann, Senior Vice President for Regulatory Affairs at CTIA, explained that as much as two-thirds of all radio spectrum is held by federal agencies, 12 times as much as the wireless industry. Whereas wireless companies have paid for the rights to use the public’s airwaves, government holders got their frequencies for free and have little incentive to use them efficiently. Due to spectrum’s scarcity, there is no “new spectrum” for wireless users today. Recovering it from government holders must be a priority. A CTIA report explains the most likely bands which could be auctioned.

Joe Kane, Director of Broadband and Spectrum Policy at the Information Technology and Innovation Foundation (ITIF) explained:

“In a perfect world, we could just extend auction authority indefinitely and have the FCC allocate bands as needed. But the reality is that most spectrum we need to reallocate is held by federal agencies, and they are loath to give it up absent a congressional mandate. So right now, it’s important to have that legislative umph behind spectrum reallocation to tell federal agencies that they really do have to play ball. This should be true even for skeptics of licensed spectrum: if you want more unlicensed or shared spectrum, it must come from somewhere; and right now, that means keeping Congress in the picture.”

Paroma Sanyal, Senior Consultant and Practice Co-Leader at the Brattle Group, observed:

“Long term auction authority (usually a 10-year term) is best from an economic perspective because it reduces uncertainty for both the FCC and the industry. It allows the FCC a longer time horizon to plan future spectrum auctions, transition spectrum to higher valued uses – for example through spectrum refarming and reallocation – and allows for telecom investments which are long term.”

Jeff Westling, Director of Technology and Innovation Policy at American Action Forum (AAF), posed the trillion dollar question to the panel: “We have moved away from beauty contests in the context of assignment of licenses, but do we still essentially have beauty contests for allocation decisions? Can/should we look to new ways of determining value of services?”

New Research Shines a Light on Spectrum’s Future

As the value of 5G is proving itself, however, other nations are taking more aggressive action to deploy their spectrum resources. China expects to dedicate the entire 6 GHz band for 5G. The United Kingdom and Chile are reversing earlier decisions in favor of unlicensed use so that the band can be auctioned. See the important work of Kalvin Bahia and Pau Castels on the socioeconomic value of the 6 GHz band for licensed use in 24 countries.

U.S. policymakers should be doing everything they can to make more exclusive use licensed spectrum available to build the world’s most robust and capable networks. But opposition remains. Unlicensed advocates are arguing that the FCC should implement new regimes like the Citizen’s Broadband Radio Service (CBRS) for key portions of mid-band spectrum. Yet as new research from Recon Analytics demonstrates, this system is unproven and underutilized. The market has demonstrated that full power exclusive use spectrum is a proven framework for spectrum management that generated billions of dollars in revenue for the public.

Licensed spectrum has also delivered innovative new technologies for consumers. 5G has introduced new products like fixed wireless access (FWA), which has lowered the price of broadband and brought serious competition to cable. Yet to unlock the full potential of 5G, exclusive use full power spectrum is needed. In a companion study to Recon Analytics, Rysavy Research found that it would take seven times as many CBRS cell sites to cover the same rural areas as C-band.

When considering whether a band can be offered for licensed, shared, or unlicensed use, we must consider the opportunity costs as auctions for licensed spectrum have proved the single most rational, fiscally responsible policy instruments of any. 4G at its height accounted for some four percent of gross domestic product (GDP) and many millions of jobs, an accomplishment achieved largely through re-farmed low-band spectrum. Yet Congress is winging it now on 5G while China vies for global leadership. There are essentially no frequencies in the pipeline, and the FCC’s auction authority is about to lapse. Congress and the FCC need to refocus if the U.S. wants to continue to enjoy wireless success and leadership.

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