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With the rise of smart phones and increased broadband usage, mobile providers are scrambling to gain access to unused wireless spectrum. Currently, mobile providers have enough spectrum to run their networks, but with the rise of smart phones and increased tablet usage, they are approaching capacity. TV broadcasters, among others, currently hold licenses to portions of the broadband spectrum which they do not use. With that in mind, the big four wireless providers have tried various methods to increase their broadband access. Verizon wireless offered to purchase licenses from cable broadcasters in December 2011, and AT&T attempted to acquire T-Mobile over anti-trust objections in order to obtain access to more spectrum. While AT&T abandoned the merger under antitrust scrutiny, the Department of Justice recently approved Verizon’s plan to purchase broadband spectrum with certain restrictions, and the FCC also approved of the purchase with the recommended restrictions. The conditions included a requirement that Verizon divest some of its broadband to wireless provider T-Mobile. Verizon says the expanded broadband access will increase coverage and speed for consumers, so some attempts have been more successful than others.
Along with approving the broadband purchases and swaps, the FCC is currently working on a plan to use broadband auctions to allocate the wireless spectrum among mobile providers and broadcasters. In February, Congress authorized the FCC to run auctions to sell off broadband spectrum to the wireless providers. The auctions would allow Broadcasters and others with unused broadband to auction off the unused portions of their spectrum to wireless providers and others who are looking to expand their broadband usage. The bill also reserved some spectrum for first responders. Only a few weeks ago, the FCC put forward its plan under the authorization from Congress to run the auctions to reallocate spectrum, and the FCC commissioners will vote to approve the plan in their September 28, 2012 meeting. Currently, the plan allows TV Broadcasters to voluntarily auction unused spectrum and keep a portion of the proceeds. The revenues from the auction will be used to fund the auction, pay the broadcasters, and hopefully, raise up to 15 billion dollars to fund tax cuts in the February bill. The auctions are expected to take place by 2014.
While Congress and Regulators see big public benefits and increased revenues from the plan, some are concerned either about broadcasters being forced out of licenses that the FCC has consistently renewed for decades or about broadcasters being able to profit by selling what is essentially a public good that Broadcasters have enjoyed for the same time period. What do you think? Are the auctions the best way to allocate public broadband spectrum? Or should the FCC and DoJ just continue to approve purchases like they did with Verizon, and renew smaller portions of the existing licenses as the licenses come up for renewal? Should Broadcasters be allowed to participate voluntarily in the auction, or should they be forced to forfeit any unused spectrum?
–Samara C. Pals Cramer
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