Spectrum Auctions

Floor Speech

Mr. KIRK. Mr. President, I just filed an amendment to S. 1323 to BRAC the spectrum. This would give us the maximum auction revenue and access to spectrum for economic development and deficit reduction. I am proud to have the amendment endorsed by Americans for Tax Reform.

It is very important for the Congress to authorize spectrum incentive auctions. While we should protect broadcasters who choose not to participate in such actions and their customers who rely on over-the-air broadcast for entertainment and public emergency information, incentive auctions would free up much needed spectrum for the civilian side in making sure that broadband communications are fully available in the United States.

It should be, in short, the policy of the United States to offer the widest
amount of broadband spectrum to empower the 21st century economy here--cell phones were invented in the United States, in fact, mostly in my home State of Illinois--and making sure this is the country where not just 1G and 2G and 3G were invented and deployed, but to make sure 5G and 6G and 7G are also deployed first in the United States and not in a country such as China or India.

According to the Federal Communications Commission, the U.S. Treasury has already collected $50 billion in spectrum receipts since 1993. Senator Reid's plan does authorize such auctions, but it is missing a key element to ensure

they are very successful. Unfortunately, like many other agencies in the administration, the Federal Communications Commission has worked to promulgate regulations that stifle innovation and economic growth. It is important for Congress to prohibit the FCC from establishing new, similar rules or conditions that are outside the scope of technical, ethical, or geographic qualifications. Such conditions, for example, the ``net neutrality'' provisions, will only serve to depress the market value of the spectrum; therefore, decreasing government revenues and lowering our ability to reduce the deficit in this way.

One recent study found that ``Congress has tremendous discretion about the amount of proceeds it could raise in exchange for spectrum'' because ``the amount of money that an auction can raise for the [U.S.] Treasury [and the government] is impacted at least in part by controllable decisions about how the auction configures the spectrum for sale and the conditions imposed on it.'' The study analyzed a previous spectrum auction to estimate the potential receipts from future actions based on conditions the FCC may or may not impose. The researchers found that the full auction potential of the broadcast spectrum with no conditions imposed would raise as much as $91 billion, whereas the same auction with heavy and unappealing conditions, such as net neutrality, would only raise $26 billion. That is a difference of $65 billion. We could raise, to lower our deficit, 250 percent more in funds with an incentive auction if we ensure that the FCC does not impose market-killing restrictions.

My proposal would place limits on the FCC, in addition to establishing a number of other prohibitions to make sure the FCC does not artificially reduce the spectrum value, to lower our deficit. The Kirk amendment would prohibit the FCC from restricting participants in any auction and from prescribing certain rates, terms, or services that may be offered by bidders in order to encourage the most robust participation and license bidding. To avoid future devaluation of spectrum licenses, the amendment would also prohibit the FCC from changing the rules of the game after an auction was completed.

But simply selling spectrum voluntarily given up by broadcasters is not enough to solve our credit crunch. We know that wireless subscribership in the United States has increased more than 400 percent in the last 15 years, and experts expect mobile data traffic to be 35 times higher in 2014 than it was back in 2009. Yet only 22 percent of all viable wireless frequencies are licensed for mobile broadband. Industry experts anticipate spectrum will be exhausted in the most populous markets by 2014. Such a restriction then would stunt wireless and other technological development in the United States because we will not have enough bandwidth to continue innovating. Internet service will then slow and calls will be dropped. We should not let this scenario unfold. We should reach our full technological potential because broadband development is a key job creator for the 21st century.

According to one estimate, the information and communications industry contributed more than $1.7 trillion to the U.S. gross domestic product in 2009 or over 12 percent of our total national income. Another study found that broadband provides additional annual consumer benefits of roughly $32 billion per year. It is widely acknowledged that wireless broadband also generates productivity gains of approximately $28 billion annually, and one cost estimate even puts productivity gains from the development and use of wireless broadband at almost $860 billion in 2016. In my own State of Illinois, this study estimates that the savings from increased productivity will reach about $5.8 billion in 5 years. This demonstrates that every sector of our economy benefits from wireless development.

For example, broadband development will vastly improve health care services for seniors. One study finds that reduced medical costs, reduced costs of institutionalized living, and increased output generated by seniors and disabled individuals will save about $927 billion between 2005 and 2030. Advancements in wireless technologies aim to reduce the burden on the chronically ill by providing remote monitoring of medical functions and to save lives through public safety interoperable networks.

Yet very little of this will be achievable unless we make more spectrum available to the civilian sector. Not surprisingly, the Federal Government itself is the largest and most stubborn squatter on the spectrum. According to the Technology Policy Institute, the government currently has exclusive or shared ownership of more than half the ideal spectrum for wireless development.

Much of the spectrum is not even being used or used efficiently by the government. Unfortunately, it is largely unknown how exactly Federal agencies and departments are using the spectrum and which spectrum we could better use on the civilian side.

My amendment, in short, would establish a process identical to the successful Base Realignment and Closure Commission to determine which Federal spectrum should be offered for sale or shared use by the private sector. While the government has much of this authority, it consistently fails to utilize it.

A BRAC-like commission for the spectrum is a key model for its reallocation and would help accelerate the development of broadband in the United States, without the standard congressional roadblocks that would inhibit development.

The amendment also provides assurances that the government will vacate spectrum once the process is complete and requires the Office of Management and Budget to intervene in the relocation process if agencies are failing to comply with the relocation plan and penalizing agencies if they do not meet the BRAC timeline.

The Kirk amendment would provide the telecommunications industry with a certain path forward for reliably clear spectrum to advance employment in the United States through wireless advancement.

I urge congressional leaders to consider this proposal. It comes from neither Republican nor Democratic sides. It is one of the most valuable assets that the government is currently squatting on and could be part of an overall deficit reduction plan totalling upward of $90 billion, but I think that benefit understates the true potential. Because if we set a goal of the United States being the country that offers the most broadband wireless spectrum, then we ensure that this critical 21st century industry remains in the United States and that the pace of innovation in wireless always is fastest in America as opposed to Asia or Europe.

That is why I put the amendment forward. I would seek its adoption as part of our deficit negotiations.

I yield the floor.

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