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Report

Report

Apr 2, 2019

The Benefits of Spectrum Auctions for Wireless Consumers, Providers, and Federal Agencies .

The Benefits of Spectrum Auctions for Wireless Consumers, Providers, and Federal Agencies document cover

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Executive Summary

Since their introduction, the use of auctions to grant spectrum licenses to the commercial wireless industry has been a win-win for America’s wireless consumers, wireless providers, and in many cases, federal agencies. Auctions have provided speed, certainty, efficiency, and economic rationality to the distribution of spectrum resources.

For the past fourteen years, innovative legislative tools and funding instruments—like the Spectrum Relocation Fund (SRF)—have supplemented spectrum auctions by enabling federal agencies to more quickly and efficiently relocate their operations from current spectrum to free these frequencies for commercial use. Under this system, relocated federal agencies receive funding from auctions to cover their relocation costs and to explore future research and development. This complementary combination of spectrum auctions and relocation funds has worked well for both federal agencies and commercial stakeholders, allowing for incredible commercial innovation and investment in the wireless ecosystem.

However, the current system could be improved in small but important and impactful ways. Policymakers should enhance the flexibility and funding made available to federal incumbents to allow for future spectrum reallocations. In addition, enhanced flexibility and funding will provide much needed and improved equipment, cybersecurity, and more efficient and interference-free federal spectrum use.

For example, targeting two specific blocks of spectrum (1300-1350 MHz and 1780-1830 MHz) currently held by federal agencies would potentially deliver $54.7 to $56.7 billion in new revenue, a portion of which could be used to help federal entities improve existing spectrum management systems and equipment. For these two bands, even the low end of projections would bring in roughly three times the costs (up to $7.9 billion) of transitioning affected incumbent federal agency users to modern and more efficient communications systems.

 

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