Lenard, White Urge FCC to move MSS Spectrum to Flexible Licenses
Contact: Amy Smorodin
April 30, 2013 – The mobile satellite service (MSS) spectrum is the spectrum most immediately available for meeting the Federal Communications Commission’s National Broadband Plan goals, explain Thomas Lenard and Lawrence White in “The Spectrum Crunch, MSS Spectrum and LightSquared,” released today by the Technology Policy Institute. To help reach its goal, the agency should grant LightSquared’s request to modify its spectrum license and allow the company to move forward with its 4G-LTE network.
The FCC’s 2010 National Broadband Plan established a goal of making 300 MHz of spectrum available for mobile broadband by 2015. Lenard, TPI President and Senior Fellow, and White, Robert Kavesh Professor of Economics at the NYU Stern School of Business, identify MSS spectrum as the only significant block that is already licensed but not deployed. Auctions are required for the remaining spectrum designated for licensed use, but none of the auctions has been scheduled to date.
The initial 300 MHz plan included 90 MHz of MSS spectrum. However, the most recent tally, in 2012, included only 40 MHz of MSS spectrum, due largely to the exclusion of spectrum licensed to LightSquared. Recently, LightSquared petitioned the FCC to modify its spectrum license to address interference concerns raised by the GPS industry, whose devices occupy neighboring spectrum – issues that led the agency to revoke its approval of the company’s mobile broadband network.
Lenard and White argue that “since the value of the LightSquared spectrum for mobile broadband is almost certainly larger than the cost of retrofitting or replacing the GPS devices that are affected by interference, a solution that would permit the LightSquared buildout to go forward should have been (and should still be) possible.” The authors cite policy failures, including that the GPS band, “combines the inefficiencies of government-occupied spectrum with the inefficiencies of unlicensed spectrum.” For example, not only do government agencies not face the opportunity cost of the GPS spectrum they use, the FCC also failed to set technical standards for GPS devices operating in the band.
Lenard and White assert that, “the GPS industry had little incentive to make a deal because the costs of delay have primarily been borne by LightSquared.” In addition, “the industry was able to use the regulatory process to prevent LightSquared from moving ahead.”
“The inefficiencies that were associated with the MSS spectrum and the failure to resolve the LightSquared-GPS interference problem are ultimately due to the absence of a flexibly licensed regime for both MSS and GPS spectrum,” according to the authors. The process “of moving from a license that is restricted to MSS to a license that permits the offering of advanced mobile broadband services has taken over 25 years, during which time this valuable spectrum resource was, for all practical purposes, unused.”
“The FCC should learn from this experience the critical importance of clearly defined rights. The absence of such rights…is the cause of the failure to resolve the LightSquared-GPS dispute in an economically efficient manner,” Lenard and White conclude. “In order to minimize the likelihood of similar failures in the future, the FCC should convert all of the MSS licenses to flexible-use licenses.”
“The Spectrum Crunch, MSS Spectrum and LightSquared” 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/.