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Government-Held Spectrum Necessary for Wireless Broadband Growth

Government-Held Spectrum Necessary for Wireless Broadband Growth

Lenard Testifies before Senate Commerce Committee

Contact: Amy Smorodin
(202) 828-4405

July 29, 2015 – Freeing up more federal government spectrum-potentially the largest source of additional spectrum for wireless broadband-requires a combination of administrative/budgetary and market mechanisms, stated Thomas Lenard in testimony before the U.S. Senate Committee on Commerce, Science, and Transportation for the hearing, “Wireless Broadband and the Future of Spectrum Policy.” In addition, he noted, spectrum licensed for mobile satellite services (MMS) is the largest block of available spectrum in the short run.

In his testimony, Lenard, Technology Policy Institute President and Senior Fellow, stated “The issue of government spectrum has been a challenging one for policy makers for a long time. Most inputs used by government agencies are subject to annual budgetary allocations and must be purchased in a market. In contrast, spectrum was awarded by the Department of Commerce and now is effectively ‘owned’ by those agencies. From the agencies’ perspective, the spectrum is free.” Lenard recommended a combination of administrative/budgetary and market mechanisms to force agencies to internalize the costs of the spectrum they use. On the administrative/budgetary side Lenard suggested:

· The preparation of an annual report by the National Telecommunications and Information Administration “that presents data on the government’s spectrum inventory, the opportunity costs of various bands, and the likely sources of surplus spectrum.”

· Tasking the Office of Management and Budget with serving as “a skeptical auditor of government-held spectrum, its use and its opportunity cost.” OMB should “routinely search for under-utilized spectrum that could be auctioned by the FCC.”

Over the long-term, the government should pursue incentive pricing mechanisms. He recommended establishment of a “Government Spectrum Ownership Corporation” or GSOC, modelled after the General Services Administration. The GSOC would lease spectrum to user agencies at rates based on the spectrum’s estimated opportunity cost. The GSOC could lease or sell excess spectrum to the private sector or be able to purchase addition spectrum if needed. Such a system would “provide sensible incentives for agencies to economize on spectrum use.”

In addition, Lenard identified mobile satellite service spectrum as the largest block available for mobile broadband that could quickly be deployed, but explained past regulatory failures have prevented the spectrum from being used. He warned the FCC “[n]ot approving the LightSquared spectrum for mobile broadband would effectively transfer a large block of spectrum from the commercial sector back to the government, exactly the opposite of what we want to achieve.”

Lenard’s full written testimony is available on the TPI website.

The Technology Policy Institute

The Technology Policy Institute is a non-profit research and educational organization that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world. More information is available at https://techpolicyinstitute.org/.

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