FCC Chairman Julius Genachowski has been warning of a looming wireless broadband crunch ever since taking office in 2009, and he believes that voluntary incentive auctions could help avoid this troublesome scenario and keep the U.S. economy humming.
Part of the FCC's National Broadband Plan hinges on coaxing television and satellite broadcasters into relinquishing some -- or all -- of their licensed spectrum so that it can be auctioned off to wireless companies. The FCC wants to liberate up to 500 MHz of spectrum over the next decade, 120 MHz of which would come from broadcasters.
In an appearance Wednesday at the Consumer Electronics Show, Genachowski said that while broadband investment and innovation have risen over the past two years, this growth won't be able to continue unless the spectrum problem is solved.
"We need to unleash spectrum so that mobile broadband can achieve its vast potential in driving economic growth," Genachowski told a room full of around 1,000 CES attendees. "If we don't authorize incentive auctions, we will get swamped by oceans of spectrum demand."
The U.S. leads the world in mobile innovation -- by virtue of having the most 3G subscribers -- and it's off to an early lead in 4G as well, Genachowski said. But without expanding the amount of available wireless spectrum, he said, the mobile broadband industry will stall, sending ripple effects through the U.S. economy.
"Americans will face slower speeds, and higher prices. Innovators will be incented to launch in countries that will beat us in this race, and the losses will be measured in lost jobs and innovation," Genachowski said.
Congress has given the FCC the green light to look into incentive auctions, and it's expected to decide on the matter by March 1. Genachowski said there's support for incentive auctions from U.S. Senators on both sides of the aisle, and they're considering offering spectrum holders financial incentives.
"We need to get it done now, and need to get it done right," Genachowski said.
However, there are sticking points, including a proposal that would prohibit the FCC from re-allocating any recovered spectrum for unlicensed use. Unlicensed spectrum, Genachowski said, has led to the creation of cordless phones, baby monitors, Wi-Fi, and the so-called Super Wi-Fi, or white space network, the first rollout of which is planned later this month in North Carolina.
"Unlicensed spectrum has had huge economic benefits. Any proposal on the table that would limit the FCC in the mobile space could be harmful," he said.
Another proposal would keep the FCC from setting eligibility requirements for bidders in order to ensure that the lion's share of auctioned spectrum doesn’t get scooped up by large players.
"We know how hard it is to change a law. In this dynamic environment, locking into a statute would be a mistake," he said. "The costs of tying our hands would be devastating."
Broadband is becoming more crucial in the age of cloud computing and Big Data, and broader coverage would equate to some 100,000 new customer service jobs, including tens of thousands of jobs "on-shored" from overseas, and work at home jobs for veterans and single parents, according to Genachowski.
"If we don't create these zones, then other countries will, and capital and jobs will flow in that direction," he said.