FCC Chairman Julius Genachowski
Remarks on Spectrum
As Prepared for Delivery
The White House
Washington, D.C.
April 6, 2011
The world is going mobile.
We're still in the early innings, but there's no questioning the incredible opportunity that
mobile broadband presents opportunity to spur economic growth, create jobs, enhance
our global competitiveness, and improve our quality of life.
Mobile broadband is being adopted faster than any computing platform in history
creating a uniquely powerful platform for innovation.
Mobile broadband applications barely existed in 2008. Today, tens of thousands of
businesses are developing hundreds of thousands of mobile apps. And this "apps
economy" is projected to generate $38 billion in annual sales by 2015.
Mobile broadband can also power innovations in areas like public safety, education,
health care, and energy including 21st century devices that can help police and
firefighters save lives digital textbooks and software that can help teachers teach and
students learn remote monitoring technologies for people with diabetes or heart disease
and smart-grid technologies that can reduce energy costs and increase energy security.
From e-commerce to social networks to entertainment and communications, American
companies and entrepreneurs are leading the world in mobile innovation, creating
enormous potential for exports abroad and economic growth at home.
The opportunities of mobile communications are huge. We need to seize them.
Now, all this mobile innovation relies on spectrum the airwaves. Spectrum is the
invisible infrastructure that's necessary for mobile communications.
Nearly 20 years ago, with the help of economists in this room, Congress authorized and
the FCC implemented a breakthrough policy innovation to better allocate this scarce
resource spectrum auctions.
Previously, spectrum was licensed through comparative hearings and lotteries. The big
idea behind auctions was that we would use market forces to drive spectrum to its most
valuable uses.
The big idea was right. Spectrum auctions have not only raised more than $50 billion in
revenue for the Treasury; spectrum auctions have generated hundreds of billions of
dollars in private investment and productivity gains, and enabled new competition that
lowered prices for consumers and accelerated the pace of innovation, helping grow our
economy.
New spectrum opportunities and challenges now require the U.S. to move to the next
generation of market-based auction policy.
Demand for spectrum is rapidly outstripping supply.
Compared to old feature phones, smartphones place 24 times the demand on spectrum,
and tablets 120 times as much.
The number of smartphones now being sold exceeds the number of PCs. And with a
whole new category of devices tablets taking off faster than anybody projected, this
growing demand is not going away.
We need to tackle the looming spectrum crunch by dramatically increasing the new
spectrum available for mobile broadband, and the efficiency of its use.
But the days for easy reallocations are over.
There's much we need to do including fostering greater efficiency in technology and
software, spurring dynamic spectrum sharing and secondary markets, and releasing
unlicensed spectrum for the next generation of Wi-Fi, machine-to-machine
communication and other innovations.
The single most important step we can take is implementing voluntary incentive auctions.
Incentive auctions are based on the same premise as the original spectrum auctions
unleashing market forces to reallocate this scarce resource. But they are two-sided
auctions, providing for licensees who voluntarily supply spectrum to receive a share of
the proceeds. It's an incentive-based approach, grounded in strong free-market principles.
The letter released today by more than 100 of the nation's leading economists is a major
endorsement of this idea. The economists who've signed this letter include Nobel Prize
winners, former members of both Republican and Democratic administrations, and FCC
Chief Economists who served under Chairmen of both parties.
These are economists from across the spectrum, so to speak. They disagree on many
things, but they agree on the importance and necessity of voluntary incentive auctions.
As they say in their letter: "The original ... auction system implemented in 1994 was
novel, but the FCC was able to implement the pathbreaking auctions that were the basis
for successful auctions around the world. We expect that the same will be true of
incentive auctions."
This letter follows one sent earlier this year by associations representing more than 2,000
companies with over $1 trillion in revenue, calling on Congress "to swiftly pass
legislation allowing the FCC to conduct voluntary incentive auctions" as called for in the
FCC's National Broadband Plan, and calling these auctions "critical to furthering
innovation and growing jobs in America."
I thank the economists here today for voicing their support for incentive auctions, and
hope their endorsement will fuel bipartisan momentum to add this critically important
tool to the Commission's toolbox.
Other countries our global competitors are focused on mobile opportunities. It's
essential that we move quickly. If we wait until there's a crisis, we'll have waited too
long because it takes real time to reallocate spectrum.
Every day we delay freeing up new spectrum is a day with real costs to consumers, our
economy, our global competitiveness, and our future.
We have an incredibly bright mobile future ahead of us, if we seize it.
