Friday, February 24, 2017

We Agree with Open Letter Addressing Importance of Strong IP Rights

This week, the Property Rights Alliance, along with Americans for Tax Reform and Digital Liberty, sent an open letter to the Trump Administration and the 115th Congress addressing the fundamentals of intellectual property (IP) rights, the positive impact that strong protections of IP rights have on the American economy, and the need to strengthen U.S. protections of IP rights even further. The letter was signed by more than 70 think tanks, advocacy groups, and individuals. While as a matter of policy, we at the Free State Foundation, except in rare instances, do not generally sign group letters, we certainly agree with the thrust of the letter and are happy to spread the word.

Here are some of the important points articulated in the letter:

  • IP Rights Are Grounded in the Constitution: The Founding Fathers recognized the importance of IP in Article 1, Section 8 of the Constitution: “To promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” 
  • IP Rights Promote Free Speech and Expression: Strong IP rights go hand-in-hand with free speech as creators vigorously defend their ability to create works of their choosing, free from censorship. By affording innovators and creators the ability to support themselves, IP rights promote free expression unencumbered by government.
  • IP Rights are Vital to Job Growth & Economic Competitiveness: The most recent report on IP-related jobs in the U.S., by the Department of Commerce and the Patent and Trademark Office, found that in 2014, direct employment in the most IP intensive industries accounted for 27.9 million jobs. Indirect activities associated with those industries provided an additional 17.1 million jobs, for a total of 45 million jobs, or 30% of all jobs in the economy. 
  • IP Rights Must Be Protected Internationally Through Effective IP Provisions in Trade Agreements: Far too many foreign governments look the other way when it comes to the theft of IP. State-sanctioned IP theft from other countries costs the U.S. economy more than $320 billion annually. The lure of access to the U.S. market should be used as an incentive to convince trading partners that they should increase their protection of IP rights. Therefore, strong IP protections are integral to all trade agreement negotiations. 
  • IP Rights Are Integral to Consumer Protection and National Security: IP rights protect consumers by enabling them to make educated choices about the safety, reliability, and effectiveness of their purchases. In 2014, consumer electronics and parts represented 24% of total counterfeit goods seized, presenting a dangerous risk to American consumers if those products malfunction. 
  • IP Rights Must Be Respected and Protected on the Internet: The Internet is an incredible platform for innovation, creativity and commerce enabling widespread distribution of ideas and information. However, IP theft online is a persistent and growing problem. For example, between 2001 and 2015, U.S. recorded music revenues fell from $14 billion to $7 billion—losses largely attributed to online theft.
Congress and the Trump Administration should use this letter as a guide over the next several years to ensure that the United States’ robust protections of IP rights grow even stronger. Moreover, Seth Cooper and I stated in a February 2017 blog that U.S. policymakers also should use Global IP Center’s International IP Index as a tool to understand the ways in which our country can strengthen its protections.

Strong protections of IP rights help artists and entrepreneurs earn a return on their labor, encouraging more investment, innovation, and growth throughout the U.S. economy.

Cisco Forecasts Continued Extraordinary Mobile Traffic Growth

On February 7, 2017, Cisco released its annual Visual Network Index (VNI) Forecast Report: Mobile Data Traffic Update, 2016-2021. This annual report is useful in helping policymakers, entrepreneurs, and consumers understand the forecasted growth of mobile devices and network technologies at national, continental, and global levels. It should be particularly useful in getting policymakers to focus on the need to remove impediments to the deployment of next-generation 5G network infrastructure.
The significant rise in mobile traffic experienced over the past several years is expected to continue for the next five years, as connections increase and networks expand. The proliferation of video applications is by far the biggest driving force behind exponentially increasing mobile traffic. On a global level, video traffic is projected to comprise 78% of mobile data in 2021, an increase of 30% from 2016. The United States has been a leader in the growth of mobile connections and traffic, with mobile traffic expected to rise fivefold by 2021. And as the graph below indicates, global mobile data traffic will increase sevenfold by 2021.
Cisco Forecasts 49 Exabytes per Month of Mobile Data Traffic by 2021
Here are some key findings regarding the growth of mobile connections and traffic throughout the world:
  • Almost half a billion (429 million) mobile devices and connections were added in 2016.
  • Mobile network (cellular) connection speeds grew more than threefold in 2016.
  • Average smartphone usage grew 38% in 2016 from 1,169 MB per month in 2015 to 1,614 MB per month in 2016.
  • Global mobile data traffic will increase sevenfold between 2016 and 2021.
  • By 2021, 4G will be 53% of connections, but 79% of total traffic.
  • The average smartphone will generate 6.8 GB of traffic per month by 2021, a fourfold increase over the 2016 average of 1.6 GB per month.

The graph below shows the extraordinary global growth projected across all Internet-enabled devices.
Global Mobile Devices and Connections Growth
Here are some of the key findings for the United States:
  • Mobile data traffic totaled 1.3 exabytes per month in 2016, the equivalent of 334 million DVDs each month or 3,687 million text messages each second.
  • Mobile data traffic will grow fivefold from 2016 to 2021, a compound annual growth rate of 35%.
  • Mobile data traffic will grow 2 times faster than fixed IP traffic from 2016 to 2021.
  • Mobile traffic per user will reach 18,617 megabytes per month by 2021, up from 4,604 megabytes per month in 2016, a compound annual growth rate of 31%.

North America, predominantly the United States, has been a global leader in mobile device innovation and the deployment of mobile broadband networks. Advanced 4G networks offer exponentially superior reliability, capacity, speeds, and security for mobile data traffic compared to previous mobile network technologies. By 2021, 53% of all global devices and connections will have 4G capability. But 63% of devices and connections in North America will have 4G capability.
The United States’ strong protections for intellectual property (IP) rights have encouraged a proliferation of mobile device brands and new video content. Indeed, mobile video currently comprises 60% of mobile data in the United States. It is important for device manufacturers, app designers, content creators to have secure copyrights and patent rights in order to incentivize returns on creation and investment. The prospect of profitable returns sustains new product and service innovation, encourages investment by competitors, and invites new entrants into the market—ultimately leading to more choices and lower prices for consumers. As further explained in a new February 15 blog, Free State Foundation Senior Fellow Seth Cooper and I discussed the findings of the GIPC’s 2017 International IP Index and why the United States should take steps to expand its global leadership in IP rights protection.
The United States’ leadership in developing mobile broadband networks, devices, and content apps has also been facilitated by a predominantly light-touch regulatory environment. The Omnibus Budget Reconciliation Act of 1993 – and key FCC deregulatory decisions in the two-plus decades that followed – removed regulatory barriers to entry and avoided onerous rate controls. This light touch regulatory regime spurred entrepreneurial investment in new mobile services and products, facilitating the creation and widespread availability of mobile services in finance, health, and transportation. Indeed, we are now on the cusp of 5G mobile network technology, which will deliver speeds 10 times faster than 4G and enable smart citiesto more efficiently use local services such as energy, utilities, transportation, and public safety. Future deployment of 5G technology is expected to create 3 million jobs and $500 billion in annual economic activity. 
Unfortunately, the previous light touch environment for mobile services became more intrusively regulated during FCC Chairman Tom Wheeler’s tenure. Ensuring that ongoing 4G deployments to all Americans take place in a timely manner and facilitating future 5G advancements requires that Congress or the FCC reverse the Open Internet Order’s imposition of public utility-style regulation on mobile broadband services. Congress or the FCC must also repeal the anti-innovation, unnecessarily prescriptive regulations adopted in the Broadband Privacy Order. The Federal Trade Commission should instead be empowered to protect privacy across all types of online services platforms according to a consumer welfare-oriented standard.
More licensed and unlicensed spectrum is needed to fully realize the tremendous economic potential of 5G technology. The proposed MOBILE NOW Act, if ultimately enacted in present or similar form, would make 500 MHz of spectrum available by 2021 and encourage the continued growth of innovative mobile services.

Cisco’s latest Mobile Data Traffic Update report should help U.S. policymakers appreciate that the extraordinary forecasted mobile data growth requires additional spectrum to match that growth and make its economic benefits a reality. To promote the next generation of mobile broadband, it is crucial that policymakers at the federal, state, and local levels avoid imposing new regulatory burdens and remove existing ones. Also, Congress and the FCC should remove or at least minimize impediments to wireless infrastructure investments in order to ensure continued innovation and growth in the indisputably competitive market for mobile services.

Friday, February 17, 2017

Create a Copyright Office for the Digital Economy

On February 6, Rep. Tom Marino introduced H.R.890, the “Copyright Office for the Digital Economy Act.” The bill would modernize the U.S. Copyright Office by reorganizing its structure and authorizing it to improve its primary functions in securing copyright protections for creative artists and their assigns. H.R.890 offers a sensible approach for finally bringing the Copyright Office into the Digital Age.

Securing copyrights and other intellectual property (IP) rights is mission-critical to promoting economic growth and jobs in the U.S. economy. “IP-intensive industries directly and indirectly supported 45.5 million jobs, about 30 percent of all employment” in 2014, according to “Intellectual Property and the U.S. Economy: A 2016 Update,” a comprehensive report released by the U.S. Department of Commerce. “IP-intensive industries accounted for $6.6 trillion in value added in 2014,” and thus contributed 38.2% of U.S. gross domestic product (GDP). Moreover, a December 2016 report published by the International Intellectual Property Alliance (IIPA) titled “Copyright Industries in the U.S. Economy,” found that the “core copyright industries” generated $1.2 trillion in U.S. economic activity in 2015. That same year, copyright industries employed 5.5 million U.S. workers, or 3.87% of the nation’s workforce.

H.R. 890 would replace the Register of
Copyrights with a Director nominated by the President and confirmed by the Senate, subject to removal for cause by the President. Authority over administrative functions regarding copyright matters would be transferred from the Librarian of Congress to the new Director of the Copyright Office. Those provisions would significantly increase the Copyright Office’s autonomy from the Library of Congress while maintaining the Office’s status as a legislative agency. Further, the Director would be authorized to modernize the copyright registration system by facilitating more efficient registration and meaningful access to records. And the Director would be charged with establishing a Copyright Advisory Board to advise and consult with the Office on “emerging practices regarding copyright, including technology practices.”

In many respects, H.R. 890’s provisions parallel the proposal by Chairman Bob Goodlatte and Ranking Member John Conyers for modernizing the Copyright Office. Free State Foundation President Randolph J. May and I submitted to the House Judiciary Committee a letter analyzing the strong merits of the Goodlatte/Conyers proposal. Our letter also emphasized the pressing need for Copyright Office reform as well as the economic benefits that would likely result from updating its administrative functions, including a new searchable database of copyright registrations and recorded transfers of ownership.

It is encouraging to have a bill introduced in Congress that addresses copyright modernization concerns in concrete form. With bipartisan co-sponsorship, H.R. 890 was also referred to the House Judiciary Committee. The “Copyright Office for the Digital Economy Act” is a welcome addition to the ongoing copyright modernization effort and merits prompt consideration by the Judiciary Committee. Indeed, a modernized Copyright Office with sufficient autonomy and authority to perform its important functions effectively is necessary to ensure that the contribution of the copyright industries to the health and wealth of our nation’s economy continues to grow.

Wednesday, February 15, 2017

Increase Economic Prosperity by Strengthening IP Rights Protections

By Seth L. Cooper and Michael J. Horney

On February 8, 2017, the U.S. Chamber of Commerce’s Global Intellectual Property Center (GIPC) released the fifth edition of the International IP Index. Entitled “The Roots of Innovation,” the Index scored the IP systems of 45 countries, representing over 90 percent of the world’s gross domestic product (GDP). Scores were derived from several specific factors pertinent to IP rights protections, allowing policymakers to better understand where their countries stand in comparison to their peers.

The International IP Index should prompt U.S. policymakers to strengthen our IP rights system. Although the U.S. ranked high in the Index, the Index nonetheless identified IP rights enforcement as one of the areas in which improvements need to be made. Lackluster Index scores for IP rights systems in certain foreign countries should also spur U.S. trade negotiators to seek stronger protections for Americans’ IP rights overseas. By bolstering IP protections, the U.S. will further benefit from the correlations between strong IP rights and overall economic innovation and investment. 

Scores in the Index were based on six key categories, including: patent rights, copyrights, trademarks, trade secrets and market access, and enforcement, as well as membership and ratification of international treaties. Those categories encompassed numerous indicators of a strong IP system, including: industrial designs term of protection, availability of legal measures to obtain redress for unauthorized use of industrial design rights, regulatory and administrative barriers to the commercialization of IP assets, and transparency and public reporting by customs authorities of trade-related IP infringement.

Because scoring for this year’s Index was based on 35 indicators, instead of 30, a weighted-score was calculated (by Michael Horney) to determine whether countries’ protections of IP rights were stronger or weaker than what was calculated in last year’s Index. Of the 38 countries included in the last Index, twenty improved their weighted-scores in this year’s Index.

For the fifth consecutive year, the United States had the highest score. The U.S. IP system rated 32.62 (out of 35). The United Kingdom and Germany followed with scores of 32.39 and 31.92, respectively. The countries with the lowest scores were India, Pakistan, and Venezuela at 8.75, 8.37, and 6.88, respectively.

However, the United States’ weighted-score, which takes into account five new indicators, actually decreased compared to the prior Index. The U.S. fell to 10th place in patent protections after previously being tied for first. A reason for this drop is that the patent opposition system in the U.S. adds substantial costs and uncertainty to the economy. The U.S. also needs to improve its enforcement efforts to combat counterfeit and pirated goods. Certainly, Congress can help step up enforcement by reforming and updating the Digital Millennium Copyright Act’s “notice and takedown system” under Section 512. Modernizing the U.S. Copyright Office and giving it authority for addressing Section 512 matters as well as small claims for infringement – as provided in the Goodlatte/Conyers proposal – would also bolster IP protections.

Moreover, the relative lack of IP rights protections in several other countries, as reflected in the Index, reinforces the need for U.S. pursuit of treaties or agreements to better secure protections for American IP rights holders internationally. In January, President Trump withdrew the U.S. from the Trans-Pacific Partnership (TPP) agreement, which the Index regarded as pro-IP. But there is no reason to think that TPP provisions regarding IP rights prompted the withdrawal. Rather, the U.S. should seek new bi-lateral or multi-lateral agreements, including ones more narrowly focused on strengthening protections for American IP rights holders in foreign countries. And as more countries adopt strong protections for IP rights through trade agreements, the global economy will grow substantially. Mutual gains from international trade are much higher when more nations adopt and enforce laws that protect IP rights.

Indeed, the Index emphasized how “IP provides the living and growing roots that stimulate innovation and bolster growth,” since economies with “the strongest IP systems stand to reap the greatest economic rewards.” Across all countries, the Index found several noteworthy correlations between strong IP protections and economic innovation and creativity:
  • Resources dedicated to innovation: Economies that provide a robust IP environment are more likely to embrace policies that create a complete innovation “ecosystem” by investing in other key building blocks, such as human capital and technological infrastructure.
  • R&D and creative activities: Economies that exhibit a steady buzz of innovation and creativity are, with few exceptions, those that have established strong IP environments – both generally and for specific high-tech sectors. The opposite is also true: on the whole, those economies with relatively weaker IP environments do not tend to experience the levels of R&D and release of new content that economies with more secure and stable IP environments do.
  • Access to technologies and creative content: A strong relationship exists between IP protections and greater access to end products and services that make novel technologies and content available to consumers.
  • A dynamic economy: IP is strongly related to measures of foreign direct investment, business and industrial growth, jobs, and GDP, ultimately providing the basis for reinvestment of resources as the virtuous cycle begins anew.

The Index concluded that strong protections of IP rights incentivize investment in R&D, innovation, and creative content because they ensure entrepreneurs have opportunity to earn a return on their labors. And as economies with strong IP rights regimes grow and prosper, new goods and services are brought to market, making consumers the ultimate beneficiaries.

The International IP Index provides U.S. policymakers a useful tool for assessing how to improve our nation’s IP systems and enhance innovation and creativity in the 21st Century economy. 

Friday, February 03, 2017

Thinking Things Through XI: On Weed Whackers, Partisanship, and Regulatory Philosophy

I expect the Federal Communications Commission under new Chairman Ajit Pai to do well by getting the agency to do less. But before the agency can do less, in one sense it has to do more. That is, more in the way of curtailing existing regulations that either shouldn’t have been adopted in the first place or that are no longer necessary or cost-justified.
At his address at the Free State Foundation’s Tenth Annual Gala Conference on December 7, 2016, Chairman Pai made his deregulatory intent clear, stating that, “[i][n the months to come, we also need to remove outdated and unnecessary regulations.” Perhaps with only a bit of hyperbole, he declared: “We need to fire up the weed whacker and remove those rules that are holding back investment, innovation, and job creation.” I’m pleased that he added immediately thereafter: “Free State and others have already identified many that should go.”
Chairman Pai is off to a good start. He’s pulled from current consideration two significant draft orders prepared under former Chairman Tom Wheeler’s direction. One would have imposed ill-conceived, costly regulatory mandates on TV set-top boxes at a time when the video marketplace is undergoing rapid change in the direction of increased consumer choice and competition. And, in the process, the proposed regulation would have undermined the ability of content creators to protect their copyrights and their contractual interests in video programs.
The other draft order would have re-regulated the rates – in effect, forced them lower – for business broadband services offered by the former “telephone” companies. This would have come at a time when new entrants like former “cable” companies increasingly are gaining a competitive foothold. In other words, the Wheeler proposal would have made it more difficult for new facilities-based (emphasis on facilities-based!) entrants like cable operators to compete, hindering the development of a more competitive market.
Chairman Pai also withdrew a draft “Section 706” report prepared under Mr. Wheeler’s direction. Under Chairman Wheeler, these broadband deployment status reports regularly had been used as a means to the end of justifying more broadband regulation. No matter how speedy the pace of deployment, or the increase in available bandwidth, the Wheeler Commission refused to determine that deployment is occurring, in the words of the statute, “in a reasonable and timely fashion.” The goalposts kept moving – so that the Commission somehow could avoid finding broadband deployment reasonable. I suspect that under Chairman Pai the Section 706 reports will be grounded in marketplace realities rather than in preconceived notions.
*     *     *
Now, all that said, I want to suggest this important point regarding regulation and regulatory agendas at the FCC. It would be a mistake, and na├»ve, to assume, as some are suggesting, that there won’t any longer be partisan splits on votes on major items under a Pai Commission. I expect there will be – and there is nothing inherently wrong with this to the extent that commissioners’ votes are grounded in differing philosophical principles or perspectives. After all, there are real differences in philosophical perspective between the parties with which the commissioners identify regarding the proper role of government regulation.
It is blinking reality to suggest communications policy is somehow immune, or should be, from application of different regulatory perspectives that, at least at times, are rooted in different partisan affiliations. Especially with regard to formulating communications policies, consistent with congressional delegations of authority, that are dependent on criteria such as the extent of existing and potential competition, the rate of technological change, the forecast evolution of consumer demands, and so forth, there are no ironclad Newtonian laws that govern, no E=MC2. Many times the “right” answer in evaluating competition or competitive impact, for example, won’t be found in some mathematical equation, not even a Herfindahl-Hirschman Index.
The FCC is established as a bipartisan agency, not a nonpartisan one. Unlike the Federal Election Commission, for example, which by law must be composed of an equal number of Democrats and Republicans, the five-member FCC may have no more than three members from the same party. And the President designates the FCC chairman, so, as former President Obama famously reminded us early in his first term, elections have consequences. There is no reason not to acknowledge forthrightly that Ajit Pai and Michael O’Rielly adhere to a more deregulatory perspective than the more pro-regulatory one of, say, Tom Wheeler, Mignon Clyburn, and Jessica Rosenworcel.     
Now, I do not mean to suggest for a moment that efforts should not be made at the FCC to minimize partisan differences, especially on contentious items. I expect that Chairman Pai will make such efforts to seek compromises where possible. Just engaging in such efforts often can lead to sounder decisions. After all, a multimember commission like the FCC is grounded, at least in part, in the idea that good-faith collaborative discussions among commissioners with a genuine receptivity to considering opposing viewpoints will produce better decisions, even if not unanimity.
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Finally, in acknowledging the legitimate role that differing philosophical perspectives necessarily play in the realm of formulating communications law and policy, I don’t mean to suggest – and don’t want to be misunderstood as suggesting – that in reaching particular decisions, whether in the context of adjudications or rulemakings, careful consideration of actual record evidence is not of utmost importance. Of course, it is. And any FCC commissioner who fails to accord a proceeding’s evidence proper consideration is derelict.
But it serves no useful purpose to deny that when decision-time comes, the conclusions to be drawn from the evidentiary record may differ. Again, particularly when it comes to matters based on judgments regarding the extent of existing market competition and future prospects, or predictions concerning the rapidity of technological advances, or of prospective consumer benefits or harms, there are no mathematical formulas to apply.
It is in this context, and especially, say, when the evidence is roughly in equipoise, or seems to be – or as the economists say, “well, on the one hand this, but on the other that” – that it is perfectly proper for a commissioner with a deregulatory orientation, as a matter of philosophical principle, to resort to a default presumption in favor of not imposing a regulatory mandate. In other words, as I have recently proposed, in the absence of clear and convincing evidence to the contrary, and within the confines of the Communications Act, in today’s Digital Age marketplace environment in which competition and consumer choice have become increasingly ubiquitous, employing a deregulatory presumption is entirely proper.
In sum, Chairman Pai’s regulatory “weed whacker” surely has its uses. Otherwise, as he put it in his Free State Foundation address, unnecessary regulations will hold back “investment, innovation, and job creation.”

Thursday, February 02, 2017

FCC Chairman Pai to Release Items Publicly Before Commission Votes

Today, FCC Chairman Ajit Pai announced a new pilot program with the effort of making the FCC more open and transparent. Chairman Pai said that when a proposed rulemaking is released publicly after the vote takes place it is “precisely the opposite of transparency.” Chairman Pai states that under the new pilot program he will publish proposed rulemakings on the same day that he presents them to his fellow Commissioners. If successful, Chairman Pai said this reform will become common practice at the FCC.
In a January 2017 blog entitled “A Proposal for Trialing FCC Process Reforms,” FSF President Randolph May proposed a number of process reforms for the FCC. Specifically, Mr. May proposed that the FCC publish its items online before the Commission votes, adding that “it seems to make little sense to deny the public access to the full text of the item.” Mr. May also stated: “Posting the text on the Commission’s website will eliminate disparities in access by the public to Commission information and also reduce misunderstandings that arise from selective filtering and partial release of snippets of the draft item.”

I commend Chairman Pai for his leadership in establishing such an important process reform. FSF scholars have been critical of the Commission for lacking transparency during its rulemaking process. By allowing the public to access proposals before the Commission votes on them, the FCC will establish greater transparency and public confidence.

Wednesday, February 01, 2017

An Infusion of Support for 5G Spectrum Allocation

By Gregory J. Vogt Visiting Fellow, Free State Foundation

A fresh infusion of political capital is quickly taking shape to support broadband infrastructure development, including wireless spectrum needs. The next generation of wireless broadband, often-termed 5G, promises enormous consumer welfare and societal benefits, as Free State Foundation’s Michael Horney detailed here. Congress, new Federal Communications Commission Chairman Ajit Pai, and Secretary of Commerce nominee Wilbur Ross all have expressed commitments to locate and reallocate more spectrum for 5G wireless networks.

These efforts appear to be in tune with President Trump’s stated interest in substantially enhancing American infrastructure investment. Providing the government with market-oriented incentives to relinquish inefficiently used spectrum would jumpstart the ongoing reallocation efforts. And at the same time the FCC should continue its recent efforts to allocate more spectrum to accommodate new 5G wireless networks. 

Commerce, Science & Transportation Committee Senators John Thune (Chairman, R-SD) and Bill Nelson (Ranking Member, D-FL), quickly reintroduced a slightly revised bipartisan MOBILE NOW Act, which passed the Committee on January 24, 2017. Although MOBILE NOW could still be further strengthened, as I point out here, this legislative effort is very important to advancing prospects for build-out of 5G wireless passage without undue delay.

Newly appointed FCC Chairman Ajit Pai has touted the need to promote broadband throughout America, particularly in unserved and rural areas of the country. Encouraging provision of broadband to digital have-nots and the establishment of "Gigabit Opportunity Zones" are key aspects of the developing policy. Chairman Pai recognizes that there are a number of technological, financial, and regulatory facets to achieving his policy goal of advancing 5G deployment. For example, the FCC will need to work with state and local governments to remove or minimize existing impediments to infrastructure build-out such as unduly restrictive rights-of-way policies or the imposition of unreasonably high permitting fees.

Secretary of Commerce nominee Ross at his January 18 confirmation hearing before the Senate Commerce Committee stated that the government needs to do more to ensure that government uses spectrum more efficiently and that sufficient spectrum be allocated for commercial wireless systems. He displayed a knowledge of government spectrum use, the need for more commercial mobile wireless spectrum, and the difficulties of prying underutilized spectrum from government users. He opined that the government needs to be provided with incentives to give up spectrum where it is not needed or is used inefficiently. He recognized how important broadband deployment is to overall infrastructure development.

Most certainly, all these efforts are moving forward from a base provided by the Obama Administration’s plan to reallocate 500 MHz of spectrum for private mobile wireless broadband use. And the Wheeler FCC commendably took strides to reallocate and repurpose spectrum in efforts to move towards achievement of the goal. But as Free State Foundation President Randolph May and I said here, these efforts lagged in the waning days of the Obama Administration.

A rededicated effort to find more spectrum for wireless use, particularly to support 5G services and equipment, would be welcome news for enhancing American infrastructure development and consumer welfare. For example, a January 2017 study by Deloitte demonstrates the very real benefits to be achieved by the spectrum reallocation effort:

·         Energy. Wireless-enabled smart grids will create $1.8 trillion to the U.S. economy –saving consumers hundreds of dollars per year.

·         Health. Wireless devices will create $305 billion in annual health system savings from decreased costs and mortality due to chronic illnesses.

·         Public Safety. Improvements made by wireless connectivity can save lives and reduce crime. A one-minute improvement in emergency response time translates to a reduction of 8% in mortality.

·         Transportation. Wireless powered self-driving cars will reduce emissions by 40-90%, travel times by nearly 40% and delays by 20%. This translates to $447 billion per year in savings, and, more important, 21,700 lives saved.

I have detailed here numerous other sources that address the very real consumer welfare benefits that wireless broadband, including developing 5G capabilities and technology, can reap for American and worldwide consumers.

Providing market-oriented incentives for government to voluntarily relinquish unneeded or inefficiently used spectrum is critical to the spectrum reallocation effort as I detail here. FCC Commissioner O’Rielly has written about the need for government systematically to account for and value the spectrum it uses. Former Commissioner Jessica Rosenworcel also spoke in favor of increasing government incentives, akin to the incentive auction currently being conducted to repurpose over-the-air broadcasting spectrum for private mobile use, to relinquish spectrum. MOBILE NOW, as presently configured, is important, but it can be further improved during the legislative process with regard to mechanisms to incent government reallocation efforts.

5G wireless deployment – that is, 5G infrastructure development – is critical to the future growth prospects of the American economy. Encouragingly, it appears that real political capital may be applied to reinvigorate the 5G spectrum effort. The consumer demand and benefits are palpable. The Administration, Congress, and the FCC appear willing. They should move ahead with dispatch.