Phil Kurz /
04.07.2011 03:04 PM
Originally featured on
Genachowski pushes for incentive auction with help from 100 economists

FCC Chairman Julius Genachowski—bolstered by a letter from more than 100 economists—April 6 said the most important thing the nation can to address what he has characterized as a spectrum crisis is to implement voluntary spectrum auctions.
Speaking at a White House spectrum event, the FCC chairman said the era of simply reallocating spectrum to meet emerging needs is over, largely due to the remarkable growth in consumer use of new wireless devices, such as smart phones and tablet computers. Incentive auctions will unleash "market forces to reallocate this scarce resource," he said.

"The number of smart phones 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," he said.

Explaining the incentive auction proposal is for "two-sided auctions" that give licensees a slice of the proceeds from the auction, Genachowski said the approach was "incentive-based" and "grounded in strong free market principles."

Thanking the economists who penned the letter, Genachowski said he hoped their endorsement would help to build bipartisan momentum for the auctions. The FCC does not have authority to conduct incentive auctions and will not in the future without congressional approval of the concept.

The letter, signed by 112 economists, said Congress has an opportunity "to give the FCC a valuable tool to increase the efficiency of spectrum use in the United States by granting the FCC the authority to auction spectrum it controls at the same time as it auctions spectrum licenses held by commercial entities."

"Giving the FCC the authority to implement incentive auctions with flexibility to design appropriate rules would increase social welfare," the letter said.

During his remarks, Genachowski said delaying freeing up new spectrum meant "real costs to consumers, our economy, our global competitiveness and our future."

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