Telecommunications: Strong Support for Extending FCC's Auction Authority Exists, but Little Agreement on Other Options to Improve Efficient Use of Spectrum
Highlights
The radio-frequency spectrum is a natural resource used to provide an array of wireless communications services, such as television broadcasting, which are critical to the U.S. economy and national security. In 1993, the Congress gave the Federal Communications Commission (FCC) authority to use competitive bidding, or auctions, to assign spectrum licenses to commercial users. The Commercial Spectrum Enhancement Act required GAO to examine FCC's commercial spectrum licensing process. Specifically, GAO examined the (1) characteristics of the current spectrum allocation process for commercial uses; (2) impact of the assignment process--specifically the adoption of auctions to assign spectrum licenses--on end-user prices, infrastructure deployment, competition, and entry and participation of small businesses; and (3) options for improving spectrum management.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Given the success of FCC's use of auctions and the overwhelming support among industry stakeholders and experts for extending FCC's auction authority, the Congress may wish to consider extending FCC's auction authority beyond the current expiration date of September 30, 2007. | In the Omnibus Budget Reconciliation Act of 1993, the Congress provided the Federal Communications Commission (FCC) authority to use auctions to assign certain spectrum licenses. Since 1993, FCC has conducted 59 auctions which have generated over $14.5 billion for the U.S. Treasury. However, critics of auctions assert that auctions: (1) raise consumer prices; (2) slow infrastructure deployment; (3) distort competition; and (4) deter entry and hinder small business participation. FCC's auction authority was scheduled to expire on September 30, 2007. However, we reported that auctions had little to no negative impact on the wireless industry and are more effective than previous assignment mechanisms. We therefore recommended that the Congress consider extending FCC's auction authority beyond the scheduled expiration date. Subsequent to our report, Congress passed legislation, S.1932 (P.L. 109-171), that extended FCC's auction authority until 2011. |