President Obama’s Spectrum Announcement

President Obama’s Spectrum Announcement

The Obama Administration announced last week that it is adopting as Administration policy the spectrum portion of the FCC’s broadband plan.  This announcement is important because it will take a concerted effort on the part of the Administration to achieve the goals of the plan – i.e., to free up 500 MHz of spectrum for wireless broadband, primarily from reluctant federal agencies and broadcasters.  The spectrum initiative is arguably the most important part of the broadband plan.  (For another discussion of some of the options for increasing spectrum for broadband, see the TPI paper by Larry White, James Riso, and me.)

President Obama issued a memorandum to the heads of executive departments and agencies, outlining how the Administration intends to achieve this goal.  The memorandum is a good start, but it will take more than that for this effort to be successful.

The memorandum states that the Secretary of Commerce must submit progress reports twice a year to the National Economic Council (NEC), the Office of Management and Budget (OMB), and the Office of Science and Technology Policy (OSTP).  Making those reports public would be a useful next step since that could create more pressure for agencies to show results.

NEC Director Lawrence Summers expanded on the President’s memorandum in a speech at the New America Foundation.  His speech may mark an important turning point in spectrum policy if it truly helps free up 500 MHz of spectrum.  Two other aspects of his speech, however, raise some questions.

Summers explained that the Administration proposes to use the auction proceeds first, for a public safety network, second, for job-creating infrastructure investment, and, a distant third, for deficit reduction.  The implication is that any new government revenue must be spent.  While many worthwhile projects certainly exist, hopefully new spending ideas will be subject to careful benefit-cost analyses.

Summers also placed the spectrum initiative in a broader economic context, and in the process seemed to imply that public action is generally a prerequisite for private sector investment and innovation.  That’s clearly the case with spectrum, but spectrum is a special case because the government controls it.  So, obviously, the government needs to act to free up spectrum for private sector activities.  In other cases, Summers’ proposition is debatable.

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