By Christopher D. Coursen Amid the current leaderless and immature madness in Congress, a novel sense of maturity appears to be advancing an important policy initiative: wireless spectrum auctions. Unlike the large number of issues that divide both parties in both chambers, this initiative is particularly unifying. The cherry on top? Auctions would bring revenue to the government, and not cost the taxpayers any money.
The House of Representatives recently introduced the “Spectrum Pipeline Act,” designed to free up more wireless airwaves for commercial use by releasing inefficiently, often non-deployed, government-owned spectrum, and then selling it through auctions. Both the Senate and the House held productive hearings on the subject and all signs indicate that the overwhelmingly bipartisan effort is moving towards action this year.
Now, as Congress attempts to deal with several pressing budgetary and monetary issues in the very short amount of time before year-end, the Members must not lose sight of the great urgency of dealing with spectrum issues. They must also work with the Congressional Budget Office (CBO) to put to bed unnecessary roadblocks.
The more than 300 million U.S. wireless subscribers are likely unaware that much of what they enjoy today on their connected devices is under threat from a “data crunch” occurring right now. Wireless products operate on spectrum – a finite resource. These are the pathways or airwaves that transmit data and ever-increasing amounts of video. But these airwaves are spread too thin – wireless networks are at or near capacity due to 150 million new in wireless users since 2009. We cannot create more spectrum, we can only reallocate it or allow shared use of it. According to recent data from CTIA – the wireless trade association – reallocation or sharing is an arduous process that takes an average of thirteen years to complete.
Congress, which oversees the sale of spectrum by the Federal Communications Commission (FCC) and Department of Commerce’s NTIA, is desperate to find revenue for the Continuing Resolution (CR) that funds the government. So they are looking to advance policy and legislation that would bring the unused and underused spectrum to market. Recent precedent – $45 billion to the Treasury from the recent 2015 auction – has experts and policymakers alike, eager to pursue a legislative solution.
A recent Politico report indicated that “inflexible budget rules” from Congress, plus several past underestimated projections of the value of spectrum made by the CBO, could hinder progress. “Under the rule set in place after the sequester negotiations of 2011, Congress won't approve any new spending without an equal amount of increased revenue,” the report reads.
In the past, however, when evaluating (scoring) any telecommunications legislation, the CBO has repeatedly undervalued all telecommunications legislation, including a decision that the 2012 spectrum auctions would yield only $15 billion in revenue to the government over a 10 year period. It has also required that it reduce spending – not that spending increases are offset by reductions.
For example, during the 1980’s, when Congress advanced legislation increasing radio and television renewal periods, the CBO had to be convinced that this would somehow reduce spending. By demonstrating the reductions in FCC administrative costs of conducting renewal hearings, Congress passed the legislation.
Similarly, in crafting legislation to deregulate the cable industry, Congress convinced the CBO that Federal preemption of State and local laws would reduce fraud and streamline the franchise renewal process, which would reduce spending by franchise authorities and cable companies alike, and result in lower costs to consumers.
To their credit, leaders from both sides of the aisle maintain that the CBO projections have traditionally been woefully wrong, and that spectrum auctions would generate revenue for the federal government, fuel the wireless economy, and assist under-connected communities. “We have an opportunity to develop meaningful legislation to further promote economic development and the many benefits fueled by increased mobile connectivity,” Senate Commerce Chairman John Thune, R-S.D., said in his remarks. Sen. Brian Schatz, D- Hawaii, has also made clear through repeated remarks, that the spectrum sale would not only create revenue, but that both the government and private sector will benefit.
Congress should do its part to advance a legislative solution that brings spectrum to the marketplace. Perhaps then the CBO will realize the harm that its projections have brought in the past, and continue to bring, before it mis-scores the pivotal spectrum auction set for 2016. There is simply too much at stake for Congressional dysfunction to stand in the way.
Christopher D. Coursen is founder of The Status Group. He formerly served as Majority Communications Counsel for the Senate Commerce Committee and Advisor to the Ronald Reagan and George H.W. Bush Administrations.