The U.S. is rapidly falling behind its global competitors in the race to transfer government-controlled wireless frequencies to the private sector. Policymakers have created a growing “spectrum gap” that threatens economic growth and national security. Congress granted the Federal Communications Commission authority to award spectrum licenses through auctions 31 years ago. But lawmakers let the FCC’s auction authority lapse in March 2023. Legislative fixes remain stalled due to territorial infighting among congressional committees, the Pentagon and the White House. The solution is something both and could agree on.
Critics initially panned spectrum auctions as a radical free-market idea, created by University of Virginia economist Ronald Coase in 1959. But Congress codified them in 1993 and they became wildly popular among Democrats and Republicans. That’s because auctions have raised more than $233 billion in non-inflation-adjusted net revenue for the Treasury. Happy to generate funds without raising taxes, Congress repeatedly renewed the FCC’s auction authority by large bipartisan margins. Until now.
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