February 12, 2010

More Spectrum Needed from Public and Private Sector, Study Proposes a "GSA" for Federal Spectrum

More Spectrum Needed from Public and Private Sector

Study Proposes a "GSA" for Federal Spectrum

The growth of wireless broadband is a bright spot in the U.S. economy, but a shortage of flexibly licensed spectrum rights could put a crimp on this expansion, according to a new study released by the Technology Policy Institute.  The study was coauthored by Thomas Lenard, president and senior fellow at TPI; Lawrence J. White, professor of economics at the NYU Stern School of Business; and James Riso, a research associate at TPI.

U.S. experience suggests that it takes at least six years, and possibly over a decade, for any large-scale reallocation of spectrum to be completed.  Thus, the authors note, "the 'projected' need is actually here today.  Developing a plan to increase available spectrum is one of the most important tasks facing the FCC's Omnibus Broadband Initiative." 

The TPI paper outlines specific proposals to make more spectrum available from public and private sector sources for wireless broadband under a flexibly licensed, market-based regime:

• In the short run, the National Academy of Sciences (NAS) should evaluate the opportunity costs of spectrum bands used by the federal government.  A high-level Government Spectrum Reform Task Force should recommend a package of spectrum bands that could be vacated by government users and auctioned by the FCC.

• Over the longer run, to provide better incentives for government agencies to economize on spectrum, a Government Spectrum Ownership Corporation should be created based on the model of the U.S. Government Services Administration (GSA), which the federal government uses for most of its real estate needs.
  

• Broadcast TV spectrum should be transitioned to a market-based regime using a voluntary market mechanism.  Broadcasters and the federal treasury should share in the gains attributable to the increased value of the spectrum.  The interests of over-the-air viewers should be protected by subsidizing their transition to subscription TV.

• Finally, mobile satellite service (MSS) spectrum should be transitioned to a market-based regime in a way that produces net benefits for all interested parties.

The authors note that "failure to allocate sufficient spectrum to a market-based regime will impede the development of a vibrant wireless broadband platform capable of competing with wireline platforms.  Broadband prices will be higher and penetration lower; the economic and social benefits of greater broadband penetration will be forgone."  The Lenard-White-Riso paper can be found here.

Details on an event TPI is holding on this topic on February 26 can be found here.

The Technology Policy Institute

The Technology Policy Institute is a think tank that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world. TPI produces independent, rigorous research and sponsors educational programs and conferences on major issues affecting information technology and communications policy. TPI is a 501(c)(3) research and educational organization.  More information is available at http://www.techpolicyinstitute.org/