Spectrum and the Public Good
December 1st, 2008 | by bballou | Published in Generativity
By Brendan Ballou
Some of you may know that the FCC is auctioning off the 2155-2175 MHz (AWS-3) band of spectrum later next month, which could open up a whole host of new wireless technologies to consumers. Right now the commission is considering a number of public-interest requirements for the eventual winner of the auction to fulfill, among them:
(1) that the winner must allocate 25% of the spectrum for free, family-here wireless Internet
(2) that the winner must build the network to be accessible to 95% of Americans within ten years
Now, I’ve got a few concerns about these proposals. In fact, I’ve blogged some of those concerns at the Open Net Initiative. But what I don’t have any concerns about, and what I vigorously support, is the idea of some public interest provisions to be mandated for the spectrum winner.
Yet apparently, the Bush administration does have problems – problems with the very idea of public interest provisions. In a recent letter to Congress, the acting head of the National Telecommunications and Information Administration (NTIA) wrote that:
“Auctions without price or product mandates create a level playing field…Restrictions and conditions on spectrum use, however well intentioned, are not the most effective or efficient way to encourage development of services or to assist underserved areas.”
Now, I don’t want to be facetious, but saying that “auctions without price or product mandates create a level playing field,” is a little like saying “anarchy creates a level playing field.” If there are no rules or restrictions, of course the playing field is fair, in so far as the strongest or richest player wins. But is that always what we want in a spectrum auction? Is our goal really to have the strongest or richest player win? As a matter of law, we can’t: federal law prohibits regulators from considering revenues when designing spectrum auctions. And as a matter of public policy, we shouldn’t: from aerospace to the Intenret, the government has often played a role in designing innovative environments. What troubles me about a condition-less wireless auction is that we might make a lot of money in the short-term, but at the price of innovation in the long-term.
