Freeing Spectrum Frees Consumers
The Federal Communications Commission (FCC) is set to approve the transfer of spectrum licenses from SpectrumCo. and Cox to Verizon Wireless. On June 8, 2012, a coalition of 14 taxpayer and free market groups, including the Taxpayers Protection Alliance, urged FCC Chairman Julius Genachowsk to approve the transfer (see letter here). According to the letter, “The move will increase competition in the mobile market, give consumers more choices in wireless providers, and expand access to affordable mobile services.”
Spectrum auctions and transfers, such as this one, present a unique set of circumstances that aren’t seen every day. Different from other sorts of products or services, spectrum is readily available and just waiting to be used by a company to better meet consumers’ needs. Unlike many other products seeking to enter the marketplace, spectrum does not require additional technological advances or other sorts of preparation in order for a company to utilize it. The technological advances and improvements come as a result of companies possessing more access to broadband and finding ways to bring this resource to its customers in the most cost-effective manner. With unyielding demand for wireless services, it is flat out irresponsible of the FCC to delay in allowing new spectrum on to the market.
Given the great demand and need that exists in the marketplace for the opening of more spectrum, it’s imperative that the FCC act. For example, wireless providers desperately need additional bandwidth to keep up and continue their technological innovations and competitive edge. It’s foolish for the government, the FCC, to delay and inhibit this spectrum license transfer. Each moment that ticks away is an opportunity lost. It is foolish for the FCC to not immediately unleash this potential for companies to innovate and improve their offerings. Once a company has the good fortune of obtaining new spectrum, it’s in the company’s best interest to turn around and use it in a way that best meets consumers’ demands.
While critics of this transfer claim that a change in spectrum ownership will result in a monopoly, macroeconomics and the actions of the free market are not on their side. Rather, this transfer of spectrum licenses will actually lead to increased competition and open doors to allow more players to enter game. This in turn means customers' needs are better met because consumers have the freedom to choose a company that best satisfies their needs. As anyone who has taken Econ 101 knows, when companies are forced to compete with each other in order to secure business, the consumer wins by enjoying the best service at the best price. There’s good reason to understand that these same principles will apply to the spectrum transfer the FCC is currently considering. As previous spectrum transfers and auctions have demonstrated, the resulting increase in competition in the mobile market provides consumers with a greater number of choices in wireless providers and expands access to affordable mobile services.
Enabling wireless companies to bid on spectrum in an auction also leads to positive outcomes for consumers. The problem with them is that they are years away, whereas the FCC could proceed with this spectrum transfer without delay. Verizon Wireless’s proposed transfer presents a rare and crucial opportunity to deploy currently unused spectrum for wireless broadband. If company is ready and able to meet needs and make investments to facilitate commerce, the government should last thing to stand in its way. Delaying or denying this transfer will only harm consumers and represent another failure by the Commission to bring new spectrum online. If the FCC fails to move forward on this, it is failing America’s wireless customers by smothering the potential of expanded mobile broadband access, availability, and affordability.
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