More Spectrum, Please

MORE SPECTRUM, PLEASE
[SOURCE: Wall Street Journal, AUTHOR: Editorial Staff]
[Commentary] Politicians and regulators complain that broadband deployment in the U.S. lags other developed nations. At the same time, they conspire to devise policies that hamstring the domestic broadband marketplace. A good example is Washington's approach to allocating wireless electromagnetic spectrum. Allocating spectrum via auction is certainly the most efficient way to go, and no one is suggesting a return to lotteries and competitive hearings. Rather, the problem is the infrequency of the auctions themselves and the fact that the government is dragging its feet in getting more spectrum into private hands. Policy makers reason that by pushing auctions off they can starve the sector for some period, which creates scarcity and artificially inflates the costs of the licenses. The Congressional Budget Office expects the 3G spectrum auction scheduled for next month to raise about $15 billion for the U.S. Treasury, reflecting uncertainty about future auctions. But the government's role here shouldn't be to maximize its revenue; the main objective is efficient allocation of an important resource for economic growth. "Congress is spending too much time looking at auction revenues and not enough time looking at the gains to the economy from having more productive use of spectrum," says Thomas Hazlett, a former FCC economist who now teaches law and economics at George Mason University. Regulators have tried to compensate for this stinginess by allowing some 2G license holders to offer 3G services, but this is at best a temporary fix. The better course is to stop distorting the market by pretending that spectrum is a scarce resource. Put as much spectrum as possible -- as quickly as possible -- on the market and remove unnecessary government controls for how it's used. Some incumbent wireless carriers will complain because they don't want any new competition. But the government has no more business protecting these incumbents than it has hoarding frequencies that the market could put to better use.
http://online.wsj.com/article/SB114765100376952517.html?mod=todays_us_op...
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