Spectrum Auction Prices Rising, But Unclear How Much ‘Crunch’ Is to Blame, TPI Says
Prices in FCC spectrum auctions have been on the rise since the mid-2000s, but factors beyond the tradeoff between supply and demand make it difficult to say that rise is evidence of what the government says is a “spectrum crunch,” said Scott Wallsten, senior vice president-research for the Technology Policy Institute (TPI), at a TPI-led event Friday. In a report released Tuesday, Wallsten examined FCC data from the 69,000 spectrum licenses it has sold through auctions since 1996. The agency has been holding spectrum auctions since 1994. The data included in the report shows that while spectrum prices are continuing to rise, “the rate of price increase has probably been slowing” (http://bit.ly/WmcTWk)
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While it is “undeniable” that spectrum is a finite resource, much of the “spectrum crunch” has occurred due to coordination problems, said William Lehr, a research associate in the Massachusetts Institute of Technology’s Computer Science and Artificial Intelligence Laboratory. Whatever policies the government puts in place to relieve the “spectrum crunch” must be flexible, Lehr said. “Whatever we do today, whatever we think the solution is, we want to think about what happens if we think it’s something else tomorrow,” he said. “We really want to be careful about conflating spectrum policy too much, because ultimately I think that takes you in the wrong direction."
Flexibility in spectrum can be used will be an important part of any government policy going forward, said Gregory Rosston, deputy director of the Stanford Institute for Economic Policy Research. Rosston is a co-chair of the Commerce Spectrum Management Advisory Committee, but said his comments at Friday’s event were not meant to represent CSMAC’s opinion. Use of spectrum can change over time, he said, noting that text messaging was far less popular 10 years ago.
Spectrum sharing between carriers and federal users could be valuable in some cases, Rosston said. A July report by the President’s Council of Advisors on Science and Technology recommended spectrum sharing as a way of allowing private companies to use the government’s spectrum if attempts to clear the spectrum of government users proves too difficult and costly (CD July 23 p1). But it would be far more useful if government users could better understand the opportunity cost of their spectrum use, Rosston said. Spectrum sharing should only occur in connection with agencies’ attempts to upgrade technology so they can more efficiently use their spectrum, Wallsten said.
Getting government agencies to move off their spectrum has proved difficult because agencies often do not have a clear incentive to do so, said Lawrence White, an economics professor at New York University. White said he has previously urged the Office of Management and Budget to take control of doling out spectrum licenses to government users, allowing them to effectively “budget” the agencies’ spectrum use. White said he’s also in favor of a longer-term plan to create a Government Spectrum Ownership Corp., an agency akin to the General Services Administration, that would control government spectrum and charge government users rent for spectrum use. That would force government users to look at spectrum as being as scarce a resource as real estate, he said.