Spectrum Management: Auctions (CRS Report for Congress)
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| Release Date |
Revised Nov. 18, 2008 |
| Report Number |
RL31764 |
| Report Type |
Report |
| Authors |
Linda K. Moore, Resources, Science, and Industry Division |
| Source Agency |
Congressional Research Service |
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Summary:
Radio frequency spectrum policy issues before Congress are characterized by economic, technological and regulatory complexity. Of particular interest to policy makers are the allocation of spectrum for specific types of use (such as TV broadcasting, radio, advanced wireless services, or unlicensed) and the assignment of licenses for exclusive or shared use of specific frequencies. Today, most frequencies allocated for commercial uses are assigned through auctions, with licenses going to the highest bidder. Another important allocation of spectrum is for unlicensed use. Both commercial and non-commercial entities use unlicensed spectrum to meet a wide variety of monitoring and communications needs. Suppliers of wireless devices must meet requirements for certification to operate on frequency bands designated for unlicensed use. Examples of unlicensed use include garage door openers and Wi-Fi communications. The Federal Communications Commission (FCC) regulates licensed and unlicensed spectrum not allocated for federal use, is responsible for auctioning spectrum licenses, and can also use its authority to redistribute licenses.
Proceeds from spectrum license sales are presently attributed to general revenue in the U.S. Budget. In the 108th Congress, however, a precedent was established with the creation of a Spectrum Relocation Fund to hold proceeds from the auction of specified radio frequencies allocated to federal use; federal agencies vacating spectrum to be auctioned for commercial use are being compensated from the fund for costs of relocation. In the 109th Congress, the Deficit Reduction Act (P.L. 109-171) included provisions that placed certain auction proceeds in a Digital Television Transition and Public Safety Fund. The fund is being mainly used to assist the transition from analog television broadcasting to digital broadcasting, and for contributions to programs for public safety. Over $7 billion of the auction proceeds were applied to deficit reduction. The funding came from the auction of spectrum (at 700 MHz) currently used for analog television broadcasting, to be vacated by February 17, 2009. The auction, Auction 73, concluded on March 18,2008; it grossed $19,592,420,000.
The rules for Auction 73 introduced two new business models for spectrum management and assignment that represented departures from past policy. One model designated a block of spectrum licenses for a network that could be managed to accept any suitable wireless device or software application, referred to as open access. The other model would require a shared network to accommodate both public safety and commercial users in a partnership. A national license, referred to as the D Block, was put up for auction, as part of Auction 73, with a reserve price of $1.3 billion. The winning bidder would have been required to assume the cost and responsibility of building the network using D Block spectrum and adjacent spectrum assigned to public safety. The sole bid for the D Block was below the reserve price and consequently the D Block will be re-auctioned. The prospects for this new auction have triggered a debate about the nature of competition in the wireless industry and the need for a nationwide public safety network that may be resolved by Congress through legislation.
