U.S. gov’t gave away billions worth of spectrum

The U.S. government has given away between $140 billion and $480 billion worth of radio spectrum to wireless providers and broadcasters since 1993, according to a study released Tuesday.

The New America Foundation, a think tank calling for new ways to manage U.S. spectrum, said most of the giveaway has come not through underperforming auctions but through “below the radar” lobbying tactics by spectrum holders. Much of the spectrum giveaway comes through strategies like case-by-case waivers for flexible spectrum use granted by the U.S. Federal Communications Commission (FCC), poorly defined spectrum boundaries, and spectrum holders polluting neighboring spectrum, said J.H. Snider, author of the study.

In many cases, the FCC has automatically renewed spectrum licenses even through spectrum law allows for licensing for “limited periods of time,” he added.

The U.S. government raised about $40 billion in more than 80 spectrum auctions since 1993, Snider said at a forum in Washington, D.C. But wireless providers and broadcasters, in financial reports to the U.S. Securities and Exchange Commission, have given that spectrum a value of about $180 billion, he said.

The spectrum is likely worth much more than those estimates, he added. Using past auction figures, the value of the spectrum could be more than $520 billion, he said.

The U.S. government is losing “mega dollars,” said Bob Edgar, a former Democratic congressman and president and CEO of Common Cause. “We’ve got to generate some reasonable recovery” of the spectrum value, he said.

He compared the current auction model to New York City licensing hot dog stands and giving the vendors the authority to build skyscrapers next door.

Edgar, also a United Methodist Church minister, said the U.S. government could provide health care to the poor and several other services with the money if it charged the full amount for the value of the spectrum.

Gary Bass, executive director of government watchdog group OMB Watch, agreed and called for more spectrum to be opened up to multiple users. “What would be our reaction if we gave away our interstate highway system to General Motors, then General Motors decided what cars were allowed on the highways?” he said.

Snider called for a less complicated spectrum policy in the U.S. and a more open process for auctioning and making changes to spectrum allocations.

Right now, only a few experts understand spectrum policy, he said. The FCC needs a new way of auctioning spectrum “so the public can value its worth and is motivated to get involved in the process,” he said.

Participants in the New America forum said it’s important to look at FCC spectrum policy now as the agency prepares rules to auction about 60MHz of spectrum in the valuable 700MHz band. That auction is set to happen by early next year.

An FCC spokesman didn’t immediately respond to a request for a comment on the New America study, but CTIA, a trade group representing wireless carriers, said recent auctions have been successful in raising money for the U.S. government. An advanced wireless services auction that concluded in September raised $13.7 billion for the U.S. government, said Joseph Farren, CTIA’s director of public affairs.

That auction was “an enormous success” and shows major changes aren’t needed, he said.

New America has called for open access rules that would require winners of part of the 700MHz spectrum to sell the spectrum at wholesale rates to competitors. Such proposals would decrease the value of the spectrum and limit bids, Farren said.

“The most effective and efficient way to action spectrum in the public interest is thorough an open and fair process where all providers are on equal footing,” Farren said.