The Art of a Spectrum Deal

Who would have expected that broadband spectrum would create an enormous logjam in Congress? Well, it has. But at long last Republicans have struck a deal to auction more government spectrum as part of the tax bill, which may be the closest thing there is to a free government lunch. The 2023 expiration of the Federal Communications Commission’s authority to sell government spectrum licenses has slowed plans to build out broadband networks and put existing airwaves to more productive use. However, discussions in Congress to renew the FCC authority stalled owing to a lack of leadership by Joe Biden. Credit to Senate Commerce Committee Chairman Ted Cruz (R-TX) and President Donald Trump for massaging the competing interests. Their mooted deal would give the FCC authority to auction 800 megahertz of spectrum through 2034 with 500 of that coming from government agencies within the 1.3 and 10.5 Gigahertz (GHz) range that is especially useful for mobile providers. The deal excludes from the auctions two bands—3.1–3.45 GHz and 7.4–8.4 GHz—that Defense claims could interfere with satellites and radar. Because Defense holds the bulk of government spectrum, it would still have to make some of its holdings available for the FCC to auction. Mobile providers and other companies could then bid for it. Republican leaders expect the auctions to generate $85 billion in revenue for the government over 10 years, but they will yield broader economic benefits. More spectrum in private hands will undoubtedly make internet faster and could reduce the cost of data plans. It could also help mobile providers compete with cable companies in fixed broadband. The sky of spectrum uses has no limit. Oh, and the deal will pre-empt Democrats in the future from using spectrum proceeds to fund broadband subsidies. Well done.