Commissioner Jessica Rosenworcel of the Federal Communications Commission on Tuesday proposed offering financial incentives to persuade federal users to give up some of their spectrum to commercial wireless providers.
Rosenworcel, a Democrat who joined the five-member commission in May, outlined the proposal during a conference that examined spectrum policy over the next decade. She noted that meeting the nation’s spectrum needs will require a variety of approaches, including effective implementation of the incentive auction process by the FCC, technological solutions, and spectrum sharing.
She also echoed calls for federal agencies to give up more of their spectrum to commercial wireless providers. Noting that government agencies are understandably reluctant to surrender a network or communications system once it's in place, she suggested giving agencies an incentive by offering them a share of the proceeds from the auction of the federal spectrum.
“What if we were to financially reward federal authorities for efficient use of their spectrum resource? What if they were able to reclaim a portion of the revenue from the subsequent re-auction of their airwaves? Would they make new choices about their missions and the resources they need to accomplish them? I think so. I believe this is an idea worth exploring,” Rosenworcel said.
She also noted that federal agencies may have a need to find new revenue sources given the likelihood that policymakers will make spending cuts as part of any deal to avert the end-of-the-year “fiscal cliff,” when taxes are set to go up and across-the-board spending cuts are scheduled to take effect.
“There may be no better enticement than the possibility of revenue from a spectrum auction to help alleviate the pain of impending budget cuts,” Rosenworcel added. “We must find ways to change the federal spectrum conversation. We must work with our government partners so they can realize the value of their spectrum and the value of using it efficiently—instead of only seeing loss from its reallocation.”
She also discussed the importance of implementing the incentive auctions effectively and in a timely manner. As part of a law passed in February, Congress authorized the FCC to conduct incentive auctions aimed at enticing broadcasters to give up some of their spectrum in exchange for some of the proceeds from the auction of those airwaves. The FCC voted in September to begin implementing the incentive auction proposal. She said that the commission needs to focus on making the incentive auction process simple to understand, fair to broadcasters who do not participate, and balanced in how they treat both broadcasters and wireless companies that may buy their spectrum.
“Incentive auctions are undeniably complicated. But at every structural juncture, a bias toward simplicity is crucial. Simplicity will yield more interest in the opportunities these auctions provide for broadcasters, and, in turn, this will yield more spectrum,” Rosenworcel said.
During a later panel discussion on federal spectrum policy, Senior Vice President Harold Feld of Public Knowledge noted that there is little room for error, given that Congress, at the urging of broadcasters, only allowed the FCC to conduct one round of incentive auctions. The incentive auctions involve three parts: a "reverse" auction to find out which broadcasters are interesting in participating; repacking broadcast stations to clear swaths of spectrum for auction; and a “forward” auction of the spectrum given up by broadcasters.
“I think the single worst thing Congress did in this statute is to say there will be only one, because we will learn a lot from running the incentive auctions,” he said. “To have limited it to a single auction … puts added pressure on this.”