Spectrum auctions are part of American Jobs Act


Repurposing spectrum in the television band to be auctioned off to providers of mobile broadband has been on the table in both houses of Congress, and now it’s on the table again as part of President Barack Obama’s American Jobs Act. The administration hopes to raise $28B at auction, $10B of which would go to a public safety network, with the remaining $18B seen as a net gain.

Broadcasters have consistently stated that they have no problem with such auctions as long as their interests are protected. In particular, broadcasters want to make sure that participation in any auctions is truly voluntary, that there be only one auction, that they are fully compensated for any changes caused by channel repacking and that there is no loss of service area or the ability to innovate.

Wireless and manufacturing interests see it differently, of course. Gary Shapiro of the Consumer Electronics Association said, “We applaud the President for including wireless incentive auction authorization for the FCC in the American Jobs Act. By incentivizing broadcasters to return underutilized spectrum, our nation can solve our wireless spectrum shortage, create jobs and raise billions of dollars to help address the ballooning deficit. Incentive spectrum auctions will alleviate slow wireless broadband, help revitalize our economy and allow a win-win for all Americans.”

Analysis of the Senate bill by the Congressional Budget Office pegged the top-line take of an auction at $24B, and figured the deficit impact of the bill would be much lower after all the costs associated with it, including broadcaster compensation, were deducted. CBO’s estimate of the final bottom line was only $6B.

Meanwhile, the NAB did an in-depth study wondering just how the auction could take place and be totally voluntary and found lots to question.

RBR-TVBR observation: If the auction of spectrum brought in $100B, it would still be a drop in the bucket in terms of defraying the national debt. Because of that, we really wish that the powers that be in Washington would focus on getting very complex spectrum issues right without tying them pointlessly to completely unrelated and highly controversial issues.