ITIF Panel: FCC Needs to Address Spectrum Needs

WASHINGTON May 18, 2011 – The Information Technology and Innovation Foundation assembled a unique group of economists, legislative aides and engineers on Tuesday to explore how best to allocate this scarce resource.

“The most popular mobile operating systems, Android and iOS, along with the top applications have all been developed in the U.S.,” said Rasika Abeysinghe, director of Networks Solutions. “The rest of the world is looking to the U.S. as a model for the use and deployment of mobile broadband; therefore we must figure out how to best use spectrum to support the expansion of mobile broadband networks.”

According to data collected by Network Solutions mobile broadband use will grow 30-fold over the next five years. As devices become more complex, they consume greater amounts of data. On average, feature phones, like the popular Motorola Razor use 8 megabytes (MB) of data per month, whereas a smartphone uses an average of 900 MB and tablets typically use about 2 gigabytes.

According to Abeysinghe, researchers are working hard to improve the efficiency of devices; however, there is a physical limit as to how much data radio waves can carry. Soon, he said, the only way to increase bandwidth will be through the use of more spectrum. If the mobile providers are unable to obtain and then access additional spectrum connection speeds will become stagnant.

Steven Crowley, a consulting wireless engineer, suggested that to improve the use and allocation of spectrum, the Federal Communications Commission needs to conduct an annual report on spectrum use in the same way it reports on broadband deployment.

“The report could show where spectrum is being used or just being held,” Crowley said. “Also, it would allow the Commission to see if the licensees were using their holds efficiently.”

Matthew Hussey, Legislative Assistant in the Office of Sen. Olympia Snowe (R-ME), said that that the FCC needs to conduct an in-depth inventory of the spectrum currently being used. Earlier this year Sen. Snowe co-sponsored a bill with Sen. John Kerry (D-MA), the Reforming Airwaves by Developing Incentives and Opportunistic Sharing (RADIOS) Act, which would in part require the FCC to conduct an inventory.

“The spectrum dashboard is a great tool but it provides a very high level look,” Hussey said. “What we need is granular data to see who owns what and what it’s being used for. The proposed inventory [would] provide policy makers and industry with crucial information which we currently don’t have.”

Hussey also commented that the inventory does not need to precede proposed voluntary incentive spectrum auctions and could be done concurrently since the auctions will only include voluntary participants. He also called upon industry to expand the use of shared spectrum as a way to increase efficiency.

Currently all revenue gained from the auctioning of spectrum goes directly to the Treasury Department. Voluntary incentive auctions would allow current spectrum owners to obtain a part of the proceeds from the auction of part or all of their spectrum holdings. The FCC believes by providing a financial incentive license holders will become more likely to participate in the auction. However, before the FCC shares any auction proceeds the Congress must change the current regulations.

The idea of using voluntary incentive spectrum auctions was generally praised by the panelists.

“An auction will bring the spectrum to the group which values it most.” said Hal Singer, managing director and principal at Navigant Economics.

Singer went on to say that an auction will prevent money from being wasted in lobbying that would occur if the FCC simply gave out the spectrum to groups the agency felt deserved it.

Speaking from the audience, Blair Levin, former Broadband Plan executive director, said that if the auctions do not take place, it is likely that when the mobile firms use up their entire spectrum holdings the FCC will simply take away spectrum from television broadcasters and give it to mobile providers. Incentive auctions provide a way for the broadcasters to obtain some revenue from their holdings.

George Mason University Law professor, Thomas Hazlett, opposed the incentive auction proposal and called for the use of an overlay plan. Such a plan would repack television broadcasters into a single contiguous block, which would then free up a large amount spectrum that could be used by mobile broadband. The “Hazlett Plan” would allow television stations that continue to use broadcast technologies to share transmitters, since they would be transmitting on frequencies which are located next to each other. Additionally the plan would free up large contiguous blocks of spectrum which is better for mobile broadband deployment.

Richard Bennett, Senior Research Fellow at Information Technology and Innovation Foundation said that the FCC needs to change the way they think about overall spectrum allocation.

“We need to move to a place where we no longer allocate spectrum for a single purpose. Instead we should think of it as mobile data in general be it for mobile broadband or television or public safety,” Bennett said.