American consumers need more spectrum, and they need it fast. Two years ago, Congress let the Federal Communication Commission’s (FCC) spectrum auctioning authority lapse. Now, every year of inaction increases the risks of harmful shortages for both consumers and the government and may cost the US over $1.4 trillion in potential GDP by 2035, according to a new report from Accenture.
One eye-catching figure from the report: consumers will face a shortage of 520 megahertz in 2027 without spectrum action—placing US performance well behind China, Japan, South Korea, Saudi Arabia, and the UK. With higher demand and less data to go around, this may quickly translate into slower speeds and worse quality service for Americans, as scarce spectrum inhibits businesses from pursuing next-generation innovations.
With this crisis looming on the horizon, Representative Rick Allen (R-GA) introduced a new Spectrum Pipeline Act in January to rectify this imbalance and establish a pipeline of mid-band spectrum for both licensed and unlicensed use. This new law would restore FCC auction authority, order the NTIA to reallocate 2,500 megahertz of spectrum, and loosen restrictions on how the auction’s proceeds are used. Restoring auctioning authority to the FCC is as essential to consumers as it is beneficial.
Auctioning authority is one of the FCC’s most valuable tools for distributing spectrum. Beginning in 1981, the FCC used a lottery to assign licenses to prequalified applicants, but it quickly pivoted in 1997 when it found winners profiteering in a secondary market. Since switching to an auction-based format for allocating spectrum, the FCC has brought in an estimated $233 billion in federal funding, which has been used to support critical efforts like connecting rural areas to telephone and internet services.
The benefits have been immense. Recent analysis from the widely respected economic consulting and research firm, NERA, for example, estimates that every new addition of just 100 megahertz of spectrum is associated with adding “$264 billion in GPD, 1.5 million new jobs, and about $388 billion in consumer surplus.”
The benefits do not only affect output, jobs, and consumer welfare. With more spectrum available, firms can pursue next-generation 6G networks to boost performance for everyday streaming and empower products like extended reality and AI-driven apps and services. Tests in Japan found that 6G is capable of delivering speeds of 100 GBs per second—a virtually instantaneous internet experience for consumers. 6G can also boost efficiency “in low and mid-band spectrum bands (below 6 GHz) to boost coverage and capacity in these important wide area coverage bands,” transforming not only future tech but the tech consumers already rely on.
In short, America prospers economically, geopolitically, and commercially from healthy spectrum auctions. But despite its clear positive impact and continued bipartisan support, Congress allowed the FCC’s auctioning authority to lapse, freezing up the mechanism on which innovation depends. Now, shortages loom as demand is expected to balloon in the coming years—and America sits on the brink of an inflection point where demand outstrips supply.
According to Accenture’s recent report, data consumption in the US has doubled every two years since 2021 and is expected to surpass current broadband capacity by 2027 and hit unprecedented shortages in 2035, where 75 percent of peak demand will go unmet. Without renewed authority from Congress, the FCC’s hands are tied, and it has held no new auctions—or allocated new spectrum bands—since 2023. This is bad news for consumers.
Authority initially lapsed and failed to get off the ground again due to disagreements on key issues like how the auction’s proceeds should be spent, national security concerns, and even whether to include a spectrum pipeline in previous proposals. Since Rep. Allen’s proposal is centered on creating a spectrum pipeline, it is likely to run into similar resistance. But while Congress dithers, consumers brace for a spectrum shortage and widespread congestion in the wireless services they have come to rely on.
After two years of inaction, it is past time for lawmakers to step up and work together to solve the auction problem.
Nate Karren is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, follow us on X @ConsumerPal