As Congress passes short-term funding solutions to temporarily avoid a government shutdown, another deadline is looming. The Federal Communication Commission’s (FFC) auctioning authority is set to expire today, Dec. 16. This authority allows the agency to auction wireless spectrum for mobile networks. Instead of reauthorizing this authority in a timely manner, Congress has waited until the last minute, creating uncertainty for the expansion of mobile networks. Reauthorization is vital for all digital communications, but especially for the expansion of 5G.
For many Americans, the details of intangible spectrum bands may not be a top-of-mind political issue. However, the FCC’s spectrum auctions enable the mobile communications that facilitate modern life. The FCC enables licensed spectrum — radio frequencies that provide services like mobile broadband, broadcast television, radio and satellite communications.
Specific portions of the spectrum warrant extra attention, as they are vital to expanding 5G. The portion referred to as mid-band offers the unique characteristics of wide coverage and high capacity, making it ideal to carry 5G. Mid-band, along with other spectrums, is attained via auctions that fall under the FCC’s purview. Without reauthorization, expanding these services will be more difficult.
The FCC’s auction authority pays dividends through the American economy via capital investment, revenue generation and job creation. Creating a reliable stream of spectrum pipeline is key to keeping America at the forefront of wireless innovation, where consumers benefit from high-quality, low-cost services critical to living in today’s world, like mobile broadband.
The growth of mobile data traffic means the necessity of spectrum isn’t going away. In 2011, mobile data usage totaled just 867 billion megabytes (MB). By 2021, this number had ballooned to 53.4 trillion MB. U.S. networks are supporting more traffic today than they were between 2010 and 2017 combined.
Internet is also faster than ever before. 5G now leads the way, delivering speeds up to 1,000 Megabits per second (Mbps). This speed allows for quicker download times and reduces problems with latency, enabling consumers to have a better online experience. Services are also becoming cheaper for ordinary Americans. A BroadbandNow study published in October found that since 2016, prices across all major download speeds and technologies have decreased for customers on average by between 14 and 42 percent.
These improvements in services have led to greater consumer demand. The number of 5G mobile phone service subscription plans is at an all-time high, with 168 million subscriptions expected by 2024. The number of wireless connections in the U.S. also continues to rise. Today, there are 468.9 million connections, up from 109 million in 2000. In addition, the percentage of data-only devices has grown by 272 percent since 2013, reflecting Americans’ desire to stay connected on the go.
The benefits of FCC auctions don’t stop with consumers, but extend to the overall economy. An Accenture report released earlier this year predicts that 5G networks are expected to “create up to 4.5 million jobs and generate $1.5 trillion in gross domestic product (GDP) for the US economy” by 2031. This massive amount of prosperity has few parallels among other industries and demonstrates the need for good spectrum policy.
For the government, the wireless industry has also generated significant revenue through the sale of spectrum licenses at FCC auctions. Since the passage of the Omnibus Budget Reconciliation Act of 1993, which granted the FCC the ability to host auctions, the wireless industry has raised $155 billion for the U.S. Treasury through numerous auction sales. This money has met a variety of government needs, like funding public safety measures like next-generation 911 services. However, this revenue stream is now in danger of drying up — and along with it, improvements in wireless services and American leadership on next-generation technology.
The Spectrum Innovation Act of 2022 is one legislative option for extending auction authority. If passed, the bill would prolong FCC authority through March 2024 and require portions of mid-band to be auctioned. However, what’s most pressing now is that Congress meets the looming Dec. 16 deadline for reauthorization regardless of whether it contains explicit mid-band requirements.
While significant progress has been made in coverage, and consumers continue to see a rapid improvement in the quality of services, some Americans still remain unreached. It’s critical that Congress act quickly to reauthorize the FCC’s auctioning authority so that the wireless industry can continue to purchase new licenses needed for expanding networks and providing access to Americans who need it.