October 1, 2013

Reclaiming Federal Spectrum: Proposals and Recommendations

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As in many countries,1 the United States government possesses a majority of the most valuable bandwidth and pays virtually nothing for this natural resource.2 The Government Accountability Office (GAO) and other independent audits make it clear that federal spectrum is used ineffectively and that reforms are long overdue.3 With increased consumer demands for new services requiring radio transmissions, it is urgent that some of the fallow federal spectrum be brought “online” and into the mobile broadband marketplace.

The consumer demand in recent years for mobile broadband services—such as streaming Netflix, voice-over Internet Protocol, and Facebook use—is unprecedented and strains the current capacity of wireless carriers. Building out cell towers and networks increases capacity, but increasing the supply of radio spectrum is much more cost-efficient.4 These realities have caused telecommunications policymakers in the past decade to seriously reexamine spectrum management. A growing consensus among experts is that federally held spectrum is lightly used and would be better redeployed for commercial uses that accommodate consumer demands and expand the United States economy.

President Obama and his Federal Communications Commission (FCC) appointees have prioritized, at some political risk, making substantial amounts of spectrum, including spectrum currently used by federal agencies and the military, available for wireless broadband use. This Article discusses the history of spectrum management and the commercial and federal uses of the radio frequencies. Several policy proposals for reclaiming federal spectrum are presented, along with recommendations for rationalizing spectrum management.

Two major spectrum management problems are addressed in the recommendations section. The first is that federal agencies receive almost no price signals that would encourage efficient use of this valuable input. The FCC and the NTIA gave federal users spectrum for free, often decades ago, and from the agencies’ perspective it is a free resource.5 The second problem is that there exists no reliable process for reclaiming federal spectrum and selling it for more productive commercial uses in the relatively short term (the next five to ten years). These agencies are institutionally reluctant to remit any of their spectrum for commercial use,6 and billions of dollars of social welfare are squandered annually as a result.7 

This Article recommends, in the short term, the creation of an independent spectrum management commission that has the authority to relocate federal systems and transfer federal spectrum to commercial users through auction. In the long term, Congress should establish an agency that possesses all federal spectrum and leases out spectrum at approximately market rates, in a way that imitates the General Service Administration’s (GSA) practice of leasing out real estate to federal agencies.

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