The Fiscal and Physical Health of Selling Spectrum
March 5, 2012
The issue of government owned spectrum is a debate that has been raging for many years but fiscal and technological urgency have driven the issue closer and closer to the headlines. As part of the payroll tax cut legislation, there was a provision to sell certain parts of the spectrum to “pay” for the cost of the legislation*. A couple weeks ago CNN did a week long report on the spectrum crunch. According to Part 1 of the series, “The U.S. mobile phone industry is running out of the airwaves necessary to provide voice, text and Internet services to its customers. The problem, known as the ‘spectrum crunch,’ threatens to increase the number of dropped calls, slow down data speeds and raise customers’ prices. It will also whittle down the nation’s number of wireless carriers and create a deeper financial divide between those companies that have capacity and those that don’t.”
The current problem with spectrum is that the growth of mobile devices has precipitated a need for more spectrum. According to CTIA (check out a nice info graphic from CTIA here), “Spectrum, a finite resource, is like lanes on a highway. Due to the significant increase in mobile devices and how much Americans depend on them, wireless needs more ‘lanes’ to meet current and projected demand.” And, the problem is that “Since many TV broadcast and government license holders have unused/underutilized spectrum, the U.S. wireless industry wants to purchase this spectrum for billions at auction from the federal government.” Even though this seems like a well-defined problem with a simple answer of selling more spectrum, Congress and the Federal Communications Commission (FCC) have made it more difficult. Even though the government has spectrum that it can auction today it has been dragging its feet on the sale of the spectrum. Before the payroll tax cut extension, the last spectrum sale was in 2008 and there are companies that are clamoring to buy more.
The need for more spectrum goes beyond just giving people the ability to make calls more efficiently or downloading apps quicker. Healthcare companies are using cutting edge wireless technology to remotely monitor the vital statistics of patients. Heart rate, perspiration, and stress can be measured through a non-intrusive device attached to the patient. A monitoring system miles away can detect any abnormalities in the patient’s vital statistics and recommend corrective action including a hospital or doctor’s visit. This real time monitoring has the opportunity to revolutionize healthcare by saving lives and money. This is critically important considering the $1 trillion price tag of Obamacare. Wireless isn’t just for the sick. Professional athletes are using the same devise to monitor performance.
The payroll tax cut legislation is a good start to sell spectrum but the government needs to expedite the selling of more spectrum so taxpayers and an ever-growing number of consumers can benefit. Technology is moving at lightning speed while the government continues to lag behind.
*The Taxpayers Protection Alliance does not characterize tax cuts as costing the government money because the government isn’t spending money; it is just allowing people to keep more of their own hard-earned money.