The Federal Communications Commission is expected to formally establish rules on May 15 for the long-awaited broadcast incentive auction – a process by which television broadcasters will voluntarily sell spectrum that wireless providers are eager to bid on. Initial reports from the FCC are troubling and could jeopardize the entire success of the auction.
As the FCC makes important decisions regarding the upcoming spectrum auction, they should have one goal in mind: freeing up more spectrum for commercial use by ensuring a successful auction.
- Mario H. Lopez
Spectrum auctions may be the last thing that most Americans worry about, but the issue impacts us all. Spectrum is the lifeblood of our modern, connected way of life. All wireless communications signals – television and radio broadcasts, wireless phone calls, and GPS devices in cars – move in space via spectrum. It’s a finite resource – meaning there is only so much of it – and the wireless industry currently only has roughly 16 percent of the spectrum suitable for mobile broadband.
The incentive auction will be complex, but it will be successful if left to market forces. On the front end, broadcast television owners require certainty to voluntarily sell their spectrum to wireless carriers.
But the entire auction hinges on strong broadcaster participation and aggressive bidding by the carriers – facts seemingly lost by the FCC as it is poised to propose auction rules to help two big competitors at the expense of consumers. Sprint and T-Mobile have incessantly lobbied the FCC for special rules to help them buy spectrum at rates below its market value by limiting the ability of other mobile carriers to compete in the auction. The effects of such a scenario – a very real, possible outcome from the May 15 FCC meeting – could be detrimental to American innovation, reducing the American debt, and perhaps ensuring quality and reliable access to high-speed Internet for American consumers.
The reliability and quality of Internet services is now a vital issue for the 21st century economy, and is a principal factor in improving upward mobility in underserved communities. American Hispanics, for example, are very dependent on mobile devices for Internet access.
According to a ComScore study, Hispanic adoption of smartphones increased from 43 percent to 57 percent, whereas smartphone adoption among the general population increased from 36 percent to 46 percent. And as recent data from Pew shows, 76 percent of Hispanics are more likely to use their mobile devices to go online. Research shows that these smartphones are used as the primary vehicle to reach the Internet, made possible with spectrum.
In turn, Hispanics gain access to civic, social, and entertainment content, as well as remote education, healthcare, and job hunting and training services. But without more spectrum, progress certainly could sputter. So as demand for spectrum rises, Washington must recognize this growing trend and to support it – not meet the outlandish demands of some to rig the game in their favor. More spectrum is more spectrum – period – and limiting participation in the incentive auction does not make sense when we need more of it for those relying on mobile broadband for vital services.
Unlike many policy topics in Washington, this is not a partisan issue. Most recently, nearly 80 House Democrats sent a letter to FCC Chairman Tom Wheeler calling for maximum participation in the spectrum auction. “Inviting as many bidders as possible to compete in an open and fair auction on equal terms will allow for the full market price for spectrum to be realized and, in turn, lead to higher compensation to incent greater broadcaster participation resulting in more spectrum for the auction,” the letter reads.
Indeed, Democrats and Republicans alike realize that without more available spectrum in the long run, consumers could face network slowdowns, choppy service, and eventually degraded data and call quality. As the FCC makes important decisions regarding the upcoming spectrum auction, they should have one goal in mind: freeing up more spectrum for commercial use by ensuring a successful auction. Now is not the time to put the success of the incentive auctions at risk with rules and restrictions that will scare away broadcasters and limit bidders.
Mario H. Lopez is President of the Hispanic Leadership Fund, a national advocacy organization that promotes liberty, opportunity and prosperity.