October 19, 2011

Spectrum Sales Could Decrease the Deficit and Help Consumers

Jerry Brito

Former Senior Research Fellow

As the supercommittee continues to explore ways to cut the deficit, Mercatus Center scholar Jerry Brito says that its letter to President Obama asking for a review of spectrum allocations represents an opportunity to deal with one of the greatest hurdles for growth in the mobile field and raise revenue for the government.

“If spectrum auctions are approved by Congress, mobile broadband providers get more spectrum, TV broadcasters get compensated, Congress gets revenue for the deficit, and consumers get a better wireless experience,” said Brito.

Estimates from the Congressional Budget Office find spectrum auctions could reduce the deficit by $6.5 billion, and other Congressional sources suggest as much as $15 billion could be made. While that’s only a small percentage of the amount the committee hopes to cut, Brito explains that this plan’s true benefit comes from having Congress recognize the current spectrum shortage.

“The current spectrum crunch is starving the growing and innovative mobile industry at the expense of the dying broadcast industry,” said Brito. “More spectrum for mobile will mean better coverage, higher speeds, and cooler gadgets to take advantage of them.”