Don't Sell the Public Airwaves to the Highest Corporate Bidder

During the recent budget negotiations, one plan called for taking valuable wireless spectrum that is intended to be used as a commons and auctioning it off the massive corporations to monopolize. Rather than enabling a whole new generation of wireless technologies that would create countless jobs and ongoing opportunities for innovation (some have described it as Wi-Fi on steroids), it would have created a one-time cash infusion while further consolidating the incomparable market power of AT&T and Verizon. Preserving as much spectrum as possible as unlicensed commons allows communities, small businesses, and activists to build the wireless networks they need because they cannot afford to license spectrum for their sole use.

Wally Bowen wrote the following op-ed urging a more sensible approach. Fortunately, the spectrum auction was dropped from the plan - but it will undoubtedly come up again. This was originally published in the Charlotte Observer on July 31 and is reprinted here with permission.

U.S. House Republicans are pushing a proposal to sell off some of the nation's most valuable real estate as part of a debt-ceiling deal, apparently unaware of the harm it will do our economy.

This real estate is a portion of the public airwaves so valuable that it's been called the "Malibu beachfront" of the electromagnetic spectrum. This lower-frequency spectrum, previously reserved for broadcast radio and TV, is far superior to "Wi-Fi" frequencies used for Internet access - and for innovative devices ranging from microwave ovens and cordless phones to garage-door openers and baby monitors.

This prime spectrum can deliver broadband speeds that support high-definition video for telemedicine in rural and other underserved areas. This spectrum is especially plentiful in rural America, and could help connect millions of low-income citizens to affordable broadband services. It could also spark a new wave of high-tech innovation and job-creation far greater than the Wi-Fi boom of the last 25 years.

Wi-Fi Logo

The genius behind the first wave of Wi-Fi innovation was unlicensed spectrum. Though these higher frequencies were once considered "junk bands" by radio engineers, designating them for unlicensed access gave innovators the freedom to experiment. It also gave investors incentive to take risks in launching new products.

Unfortunately, the GOP-backed plan would gut the huge market potential of this high-octane spectrum by selling it to the highest bidders: incumbent carriers more interested in shutting-out competition than in igniting the next great high-tech boom. Once auctioned, the spectrum would be licensed, creating enormous barriers-to-entry and disincentives for innovators, entrepreneurs and investors.

Oddly, House members pushing this auction plan - inappropriately called the "Spectrum Innovation Act" - acknowledge unlicensed spectrum's market advantage. But their mechanism for providing unlicensed spectrum is bizarre.

The bill would allow companies - and presumably the public - to place bids for this spectrum either as licensed or unlicensed. This never-before-tried auction would then pit the highest bid for licensed spectrum against the sum of all bids for unlicensed use. If the latter exceeds the former, the U.S. Treasury would reap the proceeds and the nation's economy would reap the rewards of the next unlicensed Wi-Fi boom.

But common sense should red-flag this auction scheme as unworkable. Even if companies and concerned citizens attempted to coordinate bids for unlicensed use, laws against collusion would have to be set aside. And why would smaller firms risk their money if they can assume larger firms like Google and Microsoft will do the heavy-lifting? Clearly, this proposed auction scheme is cover for a cynical spectrum-grab that would rob us and future generations of this prime electromagnetic real estate.

Let's hope lawmakers come to their senses quickly and dismiss the lobbyists pushing this self-serving scheme.

The amazing array of wireless devices developed over the past 25 years proves that unlicensed spectrum attracts investment, spurs innovation and unleashes the power of competitive markets. Unlicense this next-gen spectrum and let the innovators and job-creators get to work.

Comments

Innovative Wifi

Such a plan hardly breeds innovation for start-ups and job creation, and it will also maintain high Internet costs for low-income communities experiencing a digital divide. For example privatizing the unlicensed spectrum would prohibit communities from sharing their wifi access to drive down costs. KeyWifi is an innovative start-up providing a secure, peer-to-peer platform to rent wifi hotspots and drive down costs for everyone. With KeyWifi anyone can be a wifi supplier and more availability is created for everyone in a safe, authorized, on-line community.

This plan appears to highlight the word "No" in the word "innovation." It would be a shame to see such a plan come to pass for companies and communities working toward building an economically sustainable future based on sharing.