The continued transition to wireless communications means a never-ending need for more spectrum, and more efficient use of spectrum—the portions of the electromagnetic spectrum over which wireless signals pass, and over which the Federal Communications Commission (FCC) has asserted jurisdiction.
Portions of spectrum have been allocated to various entities for various reasons—mostly to private corporations, but also to government agencies. Identifying unused, underused, and poorly used spectrum and finding ways to deploy it more efficiently is a critical communications policy priority, since spectrum is a limited resource.
But spectrum holders don’t “own” spectrum—they own licenses to use of spectrum.
Currently, a group of satellite service providers wants to privately sell off underutilized spectrum, presumably at a profit. This “C-Band” of spectrum includes a large swath of very desirable “mid-band” spectrum that is currently allocated for satellite use that may be able to be repurposed for terrestrial use.
But allowing licensees to “sell” their licenses to the highest bidder and to pocket the money faces several very real challenges. For example, should all the spectrum in the band be reallocated? Is the scheme legal? Are new entrants being given an opportunity to participate? How will this benefit the public interest and competition for next-generation wireless services? And how should the public be compensated for this new use of spectrum?
Also remember, license holders don’t “own” the spectrum—they just owned the right to use it for a particular purpose. Very real technical and practical problems can develop from new, non-licensed or unapproved uses, such as interfering with other services, broadcasts, in the same or other bands of spectrum. Further, if licensees haven’t developed the spectrum for its intended use, that doesn’t strengthen their possession of the spectrum—it weakens their claim.
The C Band holders essentially want to bypass the FCC and create a secondary market for spectrum allocation. Now, we at IPI are big believers in secondary markets, and we wrote a hymn of praise for secondary markets a few years ago. But secondary markets require clear ownership and clear rules, and that framework simply doesn’t exist for spectrum licenses. In fact, the right framework is the existing open auction framework at the FCC that has been proven to be successful not only in redeploying spectrum but also in properly valuing spectrum for the public benefit.
Perhaps the day will come when the FCC-led public auction process will not be needed even when spectrum is repurposed for a new use. But this aspiration for long term spectrum policy is not the world we have today but it is what the world could be, facilitating enhanced innovation through greater use of markets.
An FCC-led public, open and transparent auction process that creates a level playing field for all interested parties will allocate resources efficiently to the parties that value them the most. Public spectrum auctions led by the FCC are a step toward market-based spectrum management and privatization of public airwaves, even while maintaining needed governance of spectrum.
August 2, 2019