The Future of Spectrum Policy

by

Randolph J. May *

The Hill 

July 27, 2015

On July 29, the Senate Commerce, Science, and Transportation Committee is holding a hearing titled "Wireless Broadband and the Future of Spectrum Policy."

I know. A hearing on spectrum policy may not seem that titillating. Nonetheless, getting spectrum policy right is crucial if the United States is to enhance the health of its economy as well as maintain its global leadership in the wireless communications sphere.

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The result of classifying wireless operators as Title II public utilities almost certainly will mean that the operators will incur increased costs, and even new taxes. These will be passed through to consumers in the form of higher prices. And, as significantly, increased regulation likely will deter the providers from investing as much in new facilities as they otherwise would. At the same time, they will be forced to use existing facilities in ways that are sub-optimal from an efficiency perspective.

As for sufficiency of spectrum, there is real work to be done by the government if the projected spectrum needs are to be met in the years ahead. A just-released study prepared for CTIA-The Wireless Association by the Brattle Group forecasts that, by 2019, to support mobile data traffic demand, the U.S. will need more than 350 MHz of additional licensed spectrum, above and beyond any presently available or identified.

Thus, the government faces a daunting task - and it does no good to ignore the fact that the Obama Administration is lagging in fulfilling its 2010 pledge to make available 500 MHz of new spectrum suitable for wireless use by 2020. In 2010, when President Obama established the 500 MHz goal, there were high hopes the federal government, with a seriousness of purpose, would take the steps necessary to identify underutilized spectrum bands and reallocate those frequencies for exclusive use by private sector operators.

Not nearly enough has been accomplished. Instead of focusing on reallocation, the Obama Administration has tilted towards promoting government-private sector sharing of frequencies. While sharing is feasible in some instances, it does not enable as much commercial utilization as reallocation. Nor does it provide the permanence and security that encourages investment in new facilities and innovation.

So, when the Senate committee convenes on July 29, there will be important matters to consider. There is no gainsaying that today's wireless ecosystem in the United States is healthy and competitive, with consumers enjoying the benefits of faster speeds, more innovative services, and decreasing prices.

But there is also no denying that if the FCC succeeds in increasing regulation of wireless operators and the government fails to take steps necessary to make available sufficient spectrum to accommodate rapidly increasing traffic demands, America's consumers, and, indeed, the nation's economy, will be the losers.

* Randolph J. May is President of the Free State Foundation, an independent free market-oriented think tank located in Rockville, Maryland.The Future of Spectrum Policy was published in The Hill on July 27, 2015.