The avoidable threat to America’s 5G future

Auction provisions of Spectrum Act of 2012 expire in days.

A crew works on a cell tower in Lake Havasu City, Ariz. Spectrum auctions have enabled investments in broadband for years.  (Bill Clark/CQ Roll Call file photo)
A crew works on a cell tower in Lake Havasu City, Ariz. Spectrum auctions have enabled investments in broadband for years. (Bill Clark/CQ Roll Call file photo)
Posted September 21, 2022 at 9:00am

What if the federal government stopped auctioning the radio frequency spectrum that fuels consumers’ wireless devices? 

Far from hyperbole, this could happen starting on Sept. 30. As a result of Congress requiring the Federal Communications Commission (FCC) to issue most spectrum licenses through auctions nearly 30 years ago, the United States became the world leader in wireless technologies. Innovations like smartphones, tablets, apps, heart monitors and streaming mobile video services that were the stuff of science fiction in the 1990s were affordably placed into the hands of millions of consumers, fundamentally improving their lives. 

Spectrum auctions have raised more than $258 billion in non-inflation adjusted net revenue for  the U.S. Treasury since 1994. Accenture estimates that the newest 5G wireless services will generate up to $2.7 trillion in additional American gross sales  between 2021 and 2025 by driving efficiencies, investment and innovation. Accenture also predicts that 5G could help create up to 16 million new jobs across all sectors of our economy.

But America’s continued success in the wireless space is not inevitable. Our wireless future could be put into jeopardy starting on Sept. 30, when the law allowing the FCC to auction spectrum licenses expires.

The Senate has not yet passed legislation needed to avoid a lapse and the number of legislative days to get the job done are dwindling fast. Failing to extend the FCC’s auction authority would be an unforced error that could hobble America in the global race to 5G, stunt our economic growth, harm consumers and undermine national security.

We served together on the FCC for nearly four years as commissioners. One of us is a Democrat and the other is a Republican. We sometimes disagreed, but we worked together with our colleagues to expand broadband deployment and adoption to all Americans — especially the unserved and underserved. 

One powerful tool in the FCC’s toolbox, which we used often, was the spectrum auction. Our work helped pave the way for the evolution from 3G to 4G and we helped set the stage to forge  into the 5G frontier by working with Congress to shape the FCC’s auction authority in the Spectrum Act of 2012. But that law’s auction provisions expire in days.

Wireless connectivity was one of the heroes of the COVD-19 pandemic. Mobile 4G and 5G broadband allowed Americans to stay connected during shutdowns, get treatment from  doctors through telehealth visits, and work and learn remotely.

This was especially important to underserved and minority communities. About 15 percent  of adults use their smartphones solely for broadband internet access, and this number increases to 25 percent for Latino and 17 percent for African-American adults, according to a study released last month by the Multicultural Media, Telecom & Internet Council.

Without licensing sufficient spectrum through auctions over the past quarter century, Americans would have suffered far more from the pandemic  than we did.

But more needs to be done.

According to data collected by the FCC, an estimated 5.7 million American households don’t have broadband internet access. Among those that have access, 25 percent have only one provider to choose. And we all know what that means: higher prices, unreliable service, and poorly served and disappointed customers. Allocating more spectrum can help bridge this divide, especially with new fixed wireless service offerings that are competing head-to-head with cable.

Telecom equipment maker Ericsson predicts mobile data usage will more than quadruple between 2021 and 2027. A key obstacle to meeting that demand is a shortage of spectrum, according to a recent study by the Center for Strategic and International Studies (CSIS). “The U.S. is in a competition where technological and economic leadership are as important as military strength,” CSIS warned. 

As we race against Asian and European competitors, we can’t afford to needlessly create a hurdle in America’s spectrum pipeline. The Senate must act quickly and extend the FCC’s auction authority before it’s too late.

Mignon Clyburn served as a commissioner of the FCC from 2009 to 2018 and served as acting chair from May 2013 to October 2013.  Robert McDowell served as a commissioner of the FCC from 2006 to 2013, is a partner at Cooley LLP where he is co-leader of its global communications practice, and is a senior fellow at Hudson Institute.