Why should I care about a spectrum crisis?

While I'm reasonably certain the discussion of spectrum crisis isn't a daily conversation around America's dinner tables, It's certainly a prominent part of my Google Reader feed. Way too prominent, I've begun to think. Almost as bad as rumors of this new cell phone or that new cell phone. Yawn. Then again, maybe this is something we should be looking at differently.

Spectrum is a public resource. There's a finite amount of usable spectrum in any given region, and each segment can only be used for one purpose; sometimes only one company. For non-technical folks, the easiest way to think about it is with a radio station. You can only have one radio station on a frequency in a market. And if someone else starts broadcasting on that frequency, bad things happen. (Namely, the listeners can't get the station they want!) For the technical folks, this was made loud and clear recently with the Lightsquared GPS debacle. All in all, though, it's a public resource. The government grants someone an exclusive right to use a portion of it for a particular purpose. In exchange, the person may pay the government, or it may trade in some other way (running Public Service Announcements, for example), or some combination. In some cases, such as the spectrum used for Wifi, the government has expressly set aside spectrum for anyone to use. Wifi has taken off in ways most folks probably wouldn't have foreseen, thanks to its unlicensed nature.

Recently, AT&T and Verizon have been making a lot of noise about the looming spectrum crisis. Even the FCC chairman talks of a spectrum crisis. What is this about? Long and short: mobile data takes more spectrum than voice. And smartphones are using lots of data. Enough that there are those who believe the carriers aren't going to have enough of it. And what ultimately happens when you run out of spectrum? Either things slow way down, or service becomes spotty. Neither one's pleasant.

But wait, what does T-Mobile think about this? Well, T-Mobile has essentially suggested that AT&T and Verizon's cries are simply an attempt to grab more spectrum, to assure T-Mobile and Sprint can't get any. They know if the Government auctions it off, they can pay more than anyone. And they've been buying it from anyone who will sell. T-Mobile has recently announced, though, that they know how to make do with what they have. Wow. Someone conserving a public resource. How have they done it? Well, they figured out that the move to data as essentially left their old voice spectrum laying fallow. They believe they can now re-purpose it for data.

Again, why do we care? Because when the Government auctions off a public resource, it's not just about getting as much revenue as possible. It's about making a public resource useful in the way most beneficial to the people of the United States of America. And that's not a story about tying it up in the hands of two big companies. It's about making as much competition as possible happen, which will bring prices down for the citizenry. As in, the folks who pay taxes. Let's just pretend that they could actually auction some available spectrum off for $311 billion. (They can't get near that much). That's just enough to give $10 to each man, woman, and child in America. Hooray. But imagine if that spectrum auction spawned 10 new cellular phone companies, but netted $0 for the treasury. I think it's reasonable to say that the increased competition would result in a price drop of at least $2 per month. (Probably much more). Well, that's $24 per year (not one time, but per year!) for every cellular subscriber. And there are more cellular subscribers in this country than people. (Don't think about that one too hard). And, some of that money would be spent by consumers, resulting in economic growth, and ... more tax revenue for the Government. All in all? Americans would be better off.

It's important to consider spectrum to be akin to a national treasure. One that can be used in ways that benefit a few really wealthy folks (the upper echelon of AT&T and Verizon shareholders) or benefit every American. Let's hope our lawmakers and regulators come to understand this as well.

-jbn

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