FCC Spectrum Giveaway Should be Overruled

Citizens for a Sound Economy, whose 360,000 members advocate lower taxes, less government, and more freedom, is disappointed with the Federal Communications Commission’s (FCC’s) recent decision to bypass the spectrum auction process and provide an individual company with a windfall allocation of spectrum worth $5 billion. The FCC has sidestepped both the spectrum policies enacted by Congress as well as the appropriations process, raising questions about not only governance and accountability, but also the legality of the decision.

Matt Kibbe, president of CSE, noted, “The FCC’s spectrum deal replaces competitive bidding for spectrum allocation with backroom deals, and that’s not good news for consumers or taxpayers. Either Congress or the courts need to rein in the FCC.”

The recent proposal was adopted as a solution to interference problems between Nextel users and first responders, such as police officers and firemen. Rather than simply requiring Nextel to resolve the problem, the FCC has endorsed a proposal that allows the company to swap its 800 Megahertz spectrum for new, far more valuable 1.9 Gigahertz spectrum, while setting aside additional resources to resolve interference problems.

“Both the FCC and Congress determined that the most efficient way to allocate scarce spectrum resources is through public auctions. The government giveaway endorsed by the FCC bypasses the auction to cut a deal for one company. In many ways this is the worst of all worlds,” said Kibbe. “It eliminates the efficiencies of a market-based allocation while avoiding congressional oversight of critical investments in public safety. Congress should act quickly to reject such special interest deal-making. If Congress does not exercise its authority, this almost certainly will end up in the courts, which should look very skeptically at this illegal and high-handed political deal.”