THE COUCH—There’s a great deal of focus on the spectrum incentive auction tentatively taking place 10 months from now. Congress is having hearings on it more often than L.A. Metro trains run. It is evoked as—“groundbreaking,” “unprecedented,” “historic.”
There is definitely a self-congratulatory tone, apparently over thinking it up. Details remain sketchy, as in nonexistent. So Congress and regulators are barreling headlong into a groundbreaking, unprecedented, historic undertaking by the seat of their pants.
Very little is being said about what happens after the auction. This could be due in part to the aforementioned nonexistent details, one of which includes potential failure.
If the licenses offered at auction don’t cover their own incentive costs, auction administrative costs and the expense of repacking the TV spectrum—there will be no auction, according to the Spectrum Act.
There’s not great concern here, however, because some of those expenses can be massaged, and would total just a few billion bucks either way. But Congress needs more than a break-even auction. Our friends on the Hill put more than $20 billion in auction proceeds toward extended unemployment 19 months ago. Thus, a wee bit of hysteria is creeping into the spectrum hearings. All told, there’s around $29 billion allocated from TV spectrum auction proceeds— before broadcaster incentives, and what any ordinary household budget must accommodate: Unforeseen circumstances.
The Department of Defense, for example, is holding 25 MHz hostage for $3.5 billion. The DoD said it would move into—guess where!—BAS frequencies. How much will that displacement cost, and whom?
The extent of unanticipated expenses hasn’t been considered, much less the cost of building the wireless broadband network that’s supposed to be the impetus for the auction in the first place. Nor has Congress considered who’s going to pay for it.
Ha ha. Just kidding. We know who’s going to pay for it.
(Image by Scott Nazelrod.)