Mobile Future

Wireless Consumers, U.S. Taxpayers and Open Spectrum Auctions

Today, Mobile Future released a new infographic – “A Few Billion Reasons to Care about Open Spectrum Auctions”– showing how potential restrictions on broadcast spectrum auction participation could cost taxpayers billions in government revenue and could negatively impact as many as 200 million U.S. mobile subscribers.  The visual tool builds on data from a recent report by Compass Lexecon, “The Impact on Federal Revenues from Limiting Participation in the FCC 600 MHz Spectrum Auction.”

Among the key points in the new infographic:

Broad consumer stake in spectrum auctions.  With six in 10 Americans owning a smartphone, one in three adding a tablet, and consumer mobile data consumption growing 250% in a single year, U.S. wireless consumers and our mobile innovation economy depend heavily on spectrum to power our increasingly connected lives and livelihoods.

Full auction participation key to averting spectrum crunch.  Growing wireless demand will soon exhaust current spectrum capacity, and some of the resulting ill effects—longer loading times, failed applications and dropped calls—are already being felt in some dense urban areas. If imposed, auction restrictions would deny some wireless companies the opportunity to fully participate and, thus, meet the needs of rising consumer demand for wireless connectivity.

Restrictions could impact spectrum auction revenue by as much as 60%. In spare budget times, these proceeds are needed to fund a nationwide emergency response network, to pay down the deficit and could help finance a host of other priorities, such as medical research grants, public schools and food assistance.

As U.S. Senator Charles Schumer wrote recently to FCC Chairman Tom Wheeler, “the effect of such rules [limiting auction participation] would simply be to reduce the amount of spectrum offered for auction as well as the revenue that would be generated in return.” In closing, Senator Schumer highlighted the impact of reduced revenues on public safety: “…the biggest loser would be … the public safety network America needs to thrive in the 21st Century.”

We have two paths forward: An auction where all companies have an equal opportunity to participate and meet the needs of their customers or restricted auctions that potentially deny up to 200 million consumers their right to full participation in a bright mobile future, and result in billions of lost revenues. To learn more, please see Spalter’s interview with report author Jonathan Orszag in Mobile Future’s latest Mobile Moment video