Submitted Testimony: On building a comprehensive approach to spectrum policy
Thank you for holding this hearing on building a comprehensive approach to spectrum policy. In our increasingly wireless world, using radio frequencies productively is more important than ever.
My name is Joe Kane, and I am a Fellow in Technology and Innovation Policy at the R Street Institute. R Street is a nonprofit, nonpartisan, public policy research organization. Our mission is to engage in policy research and outreach to promote free markets and limited, effective government in many areas, including spectrum policy. I have engaged in significant research on some of the most pressing spectrum issues before the federal government today, including the role of spectrum markets generally and ways to improve secondary markets for spectrum licenses. I have also focused on proceedings regarding particular bands, including the 2.5, 3.5, 3.7–4.2, 5.9, 6 and 24 GHz bands.
My findings from this research are united by one theme: that allowing markets to determine how spectrum is used leads to efficient outcomes that benefit both consumers as well as the entire wireless ecosystem. On the other hand, allowing political favoritism and government mandates to rule in spectrum policy leads to inefficient use of radio frequencies, to the detriment of everyone who relies on wireless services.
The attached appendices contain some of my recent work on spectrum policy that may be useful to the Subcommittee as it seeks to build a comprehensive approach to spectrum policy.
Appendix A provides an overview of the role of markets and spectrum policy, and highlights the ways in which mistaken government policies of the past have led to suboptimal spectrum allocation in the present. Continuing the modern shift to market mechanisms — as opposed to command-and-control regulation — is the best way to remedy these failures.
Appendix B discusses the crucial role of secondary markets for spectrum. Secondary markets allow current licensees to transfer all or part of their license rights to other parties. As in markets for other scarce resources, open exchanges for spectrum operating rights are essential to ensuring that spectrum allocation can keep up with changing economic and technological realities. The piece also suggests specific ways to reduce transaction costs that act as barriers to the proper functioning of secondary markets.
Appendix C discusses the 3.7-4.2 GHz band, which represents the best opportunity to create a large, contiguous swath of midband spectrum for 5G. The critical questions that any policymaker should ask regarding policy governing this band is how much spectrum can be repurposed from satellite downlink to mobile broadband use, and how long it will take to repurpose it. The paper shows why a market-based approach — in which the private holders of licenses to this band are allowed to simply sell their rights to other private parties — fits the bill for these purposes. It also argues that such an approach can be combined with policies that curtail some satellite usage rights and permit more extensive fixed-wireless use of the band.
Appendix D discusses the 24 GHz band, in which unfounded claims of interference with weather satellites in a nearby band threaten to delay 5G deployment. The Committee should ensure that the political machinations of the Executive branch do not impede private development without good cause.
Appendix E discusses the 5.9 GHz band, which has been set aside for automotive safety for 20 years. The piece argues that the lack of deployment of connected-vehicle technologies, combined with developments in unlicensed technologies like Wi-Fi, suggest that automotive-safety should seek to mature in other spectrum bands, and that the 5.9 GHz band should be allocated for unlicensed use.
These documents provide firm grounding for a comprehensive, market-based approach to spectrum policy that will keep up with the changing wireless marketplace, allowing consumers to get the services they need today and entrepreneurs to create the innovations of tomorrow. I thank the Subcommittee for its attention to these issues. If I can be of any assistance to Members of the Subcommittee, please feel free to contact me or my colleagues at the R Street Institute.