Current Developments in Spectrum Auctions
A significant aspect of the tax cut enacted in July is the authorization for the FCC to raise between $8.8 billion and $100 billion through electronic spectrum auctions. By auctioning off an additional 600-800 megahertz of bandwidth to private companies, the U.S. can enhance its 5G and even 6G technology, securing its position in the realms of the Internet, AI, and satellite communications.
Donald Trump recently mentioned this on his Truth Social account, expressing support for “freeing a lot of spectrum for auction” to reinforce America’s leadership in WiFi and advanced mobile technologies. Notably, all proceeds from these spectrum sales are earmarked for reducing the federal deficit.
In Texas, Republican Senator Ted Cruz has raised $200 million for a wireless initiative that aims to deliver 5G services to nearly every household and business, significantly expanding the reach of this technology.
However, the cable industry has voiced concerns regarding the impact of these auctions, fearing a decline in traditional cable services. They may have a point, but that’s also because wireless technology represents a pivotal shift in the industry.
When mobile phones gained popularity, traditional telephone companies were understandably anxious. Nonetheless, this didn’t hinder Apple’s ambition to place wireless devices into the hands of consumers everywhere.
AT&T asserts that aside from spectrum auctions, the capital expenditure incentives introduced by the Trump Tax Bill will facilitate an increase in wireless and fiber services, reaching an additional million customer locations every year by 2026 in response to growing consumer demand.
This progress could help in bridging the “digital divide” faced by lower-income families.
Yet, reports from our Congressional contacts indicate possible obstacles ahead. Democrats, especially Senator Maria Cantwell from Washington, are cautioning against proceeding too quickly with auctions to ensure the protection of vital spectrum bands used in national defense and aviation safety.
While national security is undoubtedly paramount, it’s worth noting that auctions can still safeguard a significant portion of the spectrum vital for these defense operations, and the government retains control over half of the bandwidth.
House Democrats argue that the revenue generated from this national resource should be directed towards pressing national issues. They might be onto something. But what exactly constitutes a higher priority than addressing our hefty national debt, which stands at $2 trillion annually?
Another major concern is the amendment proposed by Nebraska’s Republican Senators, which seeks to impose restrictions on electronic spectrum modifications. The Trump administration has rightly criticized this provision, asserting that it could hinder the anticipated $100 billion auction.
Allocating spectrum to major players like T-Mobile, Verizon, and AT&T might enhance safety for Americans. Past spectrum auctions have enabled AT&T to establish and expand FirstNet, a secure network designed to assist first responders during emergencies like terrorist attacks or natural disasters.
Meanwhile, China is strategizing to outpace the U.S. in the next tech race. They’ve committed a greater proportion of their spectrum to private interests compared to the U.S., a competitive edge that could impact national security.
China’s advancements in 6G and other communication technologies pose a significant threat to U.S. security interests. In the hands of private innovators, this bandwidth could serve far better economic and security purposes than remaining under government bureaucratic control.
There’s an old saying that ownership is 90% of the law. Various military interests seem keen on preserving control over this resource, but as Trump noted, that approach doesn’t prioritize America effectively.
