5G is on the cusp of making its public debut, and it’s forecast to change wireless communication in amazing ways. It is faster, there can be more connections, and the latency is almost nonexistent. That means that eventually the smart roads from science fiction can become a reality, and the “Internet of things” will flourish.
Everything is set except where all of the bandwidth for this will come from. However, some clever companies have banded together to just politely ask the FCC to give it all to them to manage. It is really a genius idea. Why not ask the government to just hand you the keys to assured windfall profits? But, I think that if we all get in line and ask the FCC to hand us the profits instead, then the FCC might understand why this is such a bad idea.
If they don’t decide that it is a bad idea and decide to just hand the spectrum over (which isn’t too far-fetched because that is how spectrum used to be awarded), just remember me if they pick you for the windfall.
The FCC is currently considering how to provide quality bandwidth for companies looking to jump into the 5G space. They are looking for a type of Goldilocks solution — the “just right” combination of meaningful bandwidth and favorable propagation characteristics. Therefore, they have ended up focusing on the 3.7-4.2 GHz band (C-band). There are some other possibilities, but C-band is what people are excited about at this time and, if done right, could even allow new people into the wireless market.
The C-Band Alliance is a group led by four foreign satellite companies that has suggested that the FCC should let them manage the spectrum. From what I have been able to gather, the windfall that these four companies would reap is huge: billions and billions and billions of dollars. However, if the FCC decides to open up the auction to the actual market, then the companies would lose out on their crony payday.
Oh, the humanity!
So, the C-Band Alliance is doing what any good crony would do when bribery has failed: use scare tactics. Claiming that an auction can’t work, that delays from an auction would result in lawsuits, and China would invade — I mean, overtake, the U.S. But all of these talking points are merely hot air. This is most evident by the claim that an auction can’t work and that it would cause delays.
The FCC is actually good at bandwidth auctions. In fact, auctions are what they do best — what the FCC failed at was figuring out a way to just hand out public goods in almost the same way that the C-Band Alliance is asking them to do. In fact, one of the last times that the FCC handed out spectrum without an auction, an actor from the 1980s TV show “Airwolf” was one of the lucky winners. As an article from Priceonomics notes:
Now, the FCC might need to get creative with a 5G auction. FCC auctions don’t work like eBay auctions — they can take months to complete. But they have the ability to adapt and they have in the past. They can make an auction work faster. They can make it work to address infrastructure. And, to address one of the biggest fears of the C-Band Alliance, they can even protect spectrum for market incumbents.
The best thing about an auction is that it allows for competition, and with the excitement around 5G the demand for spectrum is going to be high.
So, if someone from the FCC is reading this (I’m looking at you, Chairman Ajit Pai) pick me, please pick me, pretty please pick me! I might not have been in “Airwolf,” but I do like the movie “Clerks.” Or, if you want to handle the spectrum in the right way, the closest thing to a free market way, just open up the C-band spectrum to an auction.
Charles Sauer (@CharlesSauer) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is president of the Market Institute and previously worked on Capitol Hill, for a governor, and for an academic think tank.
