Former FCC Commissioner Proposes Deregulatory Approach to Spectrum Crunch

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The Federal Communications Commission should consider liberalizing spectrum policy to allow for the seamless flow of spectrum from lower-valued to higher-valued uses, former FCC Commissioner Harold Furchtgott-Roth told reporters June 17.

Speaking at a briefing hosted by the Hudson Institute's new Center for Economics of the Internet, Furchtgott-Roth, the head of the center, said that a decidedly more deregulatory approach will better resolve what FCC Chairman Julius Genachowski has referred to as the “spectrum crunch.”

He criticized the concept of voluntary “incentive” auctions—in which television broadcasters, who license spectrum through the commission, could voluntarily release some of it back to the government in exchange for a share of the auction proceeds—as a “cumbersome, government-driven process.”

“The FCC should deregulate the use of spectrum and let it migrate to the best uses,” Furchtgott-Roth said.

The agency, in its mandate to regulate the airwaves according to “public interest, convenience or necessity,” maintains the exclusive right to determine what services can be offered over which bands. Under the current regime, wireless carriers, for example, must obtain a spectrum allocation through a formal rulemaking process, as there is no private band owner who can sell or lease airwaves to deliver new services to customers.

FCC Should Free More Broadcast Spectrum.

Thomas Hazlett, professor of law and economics at the George Mason School of Law, noted while unused or under-utilized spectrum can be found in all sorts of prime locations on the electromagnetic dial, frequencies are “walled off” from making any economic contribution.

“It's not that broadcasters don't have valuable content; it's that it’s not delivered efficiently,” he said.

Like Furchtgott-Roth, Hazlett found fault with the FCC's proposal, questioning the goal of reclaiming only 120 megahertz of spectrum from over-the-air broadcasters, when the broadcasting industry occupies 294 MHz.

“We're two generations beyond 1952,” Hazlett said, noting that the market today, even with access to free over-the-air television, has decided to pay $60 to $70 a month for access to pay-TV services. Roughly 90 percent of Americans subscribe to a cable, satellite, or telecom-company provided TV services, Hazlett said.

By Paul Barbagallo