Friday, October 29, 2010

FCC: Auctioning off TV spectrum

The FCC chairman discusses "incentive auctions" for current TV spectrum.

Moving WiFi to the next level

By Julius Genachowski

Washington Post
Friday, October 29, 2010; A21

Recent public discussion has focused on the importance of large-scale visible infrastructure projects, such as highways and high-speed rail, to economic growth and America's global competitiveness. Just as vital is our invisible infrastructure - the electromagnetic spectrum that travels through the air and enables our wireless communications networks.

The value of spectrum is growing every day. Spectrum supports our "smart" phones, tablets, laptops and other mobile devices that have become increasingly essential to our daily lives. This wireless innovation fuels economic growth and job creation. Sales of smart-phone "apps" - an industry that didn't exist a few years ago - topped $4 billion in 2009; this new economy has created many jobs and can create many more. Our invisible infrastructure also supports breakthrough tools to improve education through mobile online learning and e-books, enhance health care through potentially lifesaving remote diagnostics, and promote energy efficiency by supporting the smart grid.

There's one big problem, however. Spectrum is finite. With the ever-increasing demand on our airwaves, we risk running out of bandwidth. The amount of spectrum in the mobile broadband pipeline has tripled in the last five years.

But that's not enough. Over the next five years, the amount of mobile data traffic is expected increase at least 35-fold.

If we don't address this gap, we will stifle American innovation and cost our nation the job-creating opportunity to lead the world in mobile communications. Put simply, we have no choice but to make more spectrum available for mobile broadband and to find new ways to use spectrum more efficiently.

We are moving in the right direction. In September, the Federal Communications Commission freed up the vacant airwaves between broadcast TV channels known as "white spaces." This was the first release of unlicensed spectrum in 25 years, and it will allow American innovators to create longer-range, faster and more reliable versions of the WiFi connectivity that already has untethered people from desktop computers and eased congestion on our wireless networks.

The United States will be the first nation to deploy this Super WiFi technology. Analysts estimate that we will benefit from billions of dollars in new private investment and accompanying job creation. We will also be exporting our technology products to other countries, not the other way around.

But Super WiFi must be only one small step in unleashing the potential of wireless. Over the next decade, we need to free up 500 megahertz of spectrum for wireless broadband use - much more than all the spectrum we assign to this use today. And there are no easy pickings on the spectrum chart.

Take the spectrum devoted to TV broadcasting. In the early days of television, when the vast majority of Americans received their news and entertainment through over-the-air broadcast TV, and the overall demands on spectrum were modest, there was no problem devoting to this medium a whopping 300 megahertz of our most valuable spectrum. But today, when 90 percent of Americans receive their broadcast news and entertainment via cable and satellite, devoting this much spectrum to over-the-air broadcasting threatens to starve one of the most vibrant sectors of our economy and lead to consumer frustration with mobile devices.

The challenge is finding 21st-century policies that recognize the important role that broadcast TV still plays while reprioritizing our use of spectrum. In my view, the best approach is through market-based mechanisms that will encourage the current holders of spectrum to let some of that spectrum flow to uses the market and consumers value most.

To this end, the FCC's National Broadband Plan recommended a policy innovation: "incentive auctions." Current spectrum licensees, such as TV broadcasters, could voluntarily relinquish some of their spectrum; the FCC would auction this spectrum for wireless broadband, with a portion of the proceeds shared with the old licensee. These incentive auctions would be a win-win-win: The country would benefit from more spectrum freed up for mobile use. Taxpayers would benefit from billions in auction revenue. And the spectrum holders would receive a fair capital infusion and have the option to share spectrum or rely on other platforms.

President Obama endorsed this proposal in June, and it is the basis of bipartisan bills in the Senate and House. Swift action to authorize incentive auctions will be critical in moving toward more efficient spectrum use and ensuring that wireless broadband can meet its potential for economic growth and job creation.

Enabling incentive auctions and pursuing other creative ideas for optimizing spectrum use, such as secondary markets and sensing technology, are a test of whether our country can act strategically in today's fast-moving and vibrant economy. The future is being built on our invisible infrastructure. We need to attend to it.

The writer is chairman of the Federal Communications Commission.

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