Federal Agency Spectrum Fees Are a Win-Win

Commissioner Michael O’Rielly recently sent a letter to Congress asking it to assess fees for the use of spectrum by federal agencies as a way to more efficiently allocate spectrum between the public and private sectors. Commissioner O’Rielly’s proposal, which is discussed more thoroughly in a September 2015 blog, would transition unused or underutilized spectrum in the public sector into a valuable asset for private companies, generating a significant amount of government revenue.

In his letter, Commissioner O’Rielly says, even if the imposed agency spectrum fees are “conservative or undervalued,” annual budgets will serve as appropriate constraints for agencies to retain spectrum only if it is “absolutely necessary to further their particular missions.” At the current price of $0, agencies - like all economic actors – want to hold as much spectrum as possible and have little incentive to relinquish it. Simply by raising the price above $0, budgets will serve to constrain the amount of spectrum an agency can hold, opening up more spectrum to private sector use.

A law allowing the establishment of agency spectrum fees should help turn unused or underutilized spectrum into a valuable asset for the mobile marketplace’s growing demand. Not only would this law allow for the continued growth of mobile broadband, it would help federal agencies allocate their resources to the most important and valuable services. And it would raise government revenue significantly when the unused spectrum is sold to private companies.

Agency spectrum fees are a win-win for the government and the economy!