Home > posts > Spectrum Stall: FCC and Big Labor Impeding Innovation and Economic Opportunity
March 19th, 2012 4:37 pm
Spectrum Stall: FCC and Big Labor Impeding Innovation and Economic Opportunity
Posted by Timothy Lee Print

With the unemployment rate holding steady above 8% for over three long years now, it’s obvious that the United States must pursue policies that spur rather than retard job creation and economic growth.  One continuing economic bright spot already exists in the telecommunications sector, where several prospects for generating new jobs exist.  Unfortunately, federal bureaucrats continue to obstruct those prospects.  The leading current example is spectrum and, specifically, Big Labor special interests pressuring the Federal Communications Commission (FCC) to block telecom companies from buying unused wireless broadband.  That pressure only serves to obstruct economic recovery, because more access to spectrum for service providers would mean greater incentive to invest, and in turn more business opportunities that would raise revenue and create jobs.

For example, a recent study by NDN found that from April 2007 to June 2011, broadband companies created some 1,585,000 new jobs in their transition from 2G to 3G wireless technologies and Internet infrastructure.  NDN also noted that “the investments being undertaken today to upgrade wireless network and Internet technologies from 3G to 4G hold comparable promise for job creation.”  Similarly, a Deloitte study from last year agreed with NDN’s assertion, estimating that U.S. investment in 4G networks could generate anywhere from $25 to $53 billion in economic revenue between 2012 and 2016.  Furthermore, according to their study, these investments could produce between 371,000 and 771,000 new jobs and account for $73 billion to $151 billion in GDP growth.

Unfortunately, union bosses oppose spectrum transactions in favor of their own self-interest.  For instance, in comments filed with the FCC, the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) falsely claimed that the transaction “agreements would appear to limit the availability of competitive services, dividing up geographic service areas for particular companies, leading to reduced investment in infrastructure, job losses, and ultimately, higher prices for consumers.”  As noted above, however, independent studies refute their allegation and attest to the economic and job benefits of allowing spectrum to be sold to companies that will apply it toward better customer service.  The spectrum sale will not only boost the economy and create jobs, but also benefit consumers by alleviating the oncoming spectrum crunch.   Greater access to spectrum will also create additional incentive to invest more toward innovation, which in turn means new devices, applications and services.  Providers will be able to upgrade their networks to a 4G LTE that has further geographic reach, faster downloads and greater capacity.

If the FCC continues to obstruct the sale , however, the quality of Internet service and our economy more generally will suffer due to the gradual exhaustion of existing spectrum.  In order to ensure that the domestic telecom sector continues to flourish, spectrum must therefore be made available to those who need it and who have the ability to use it in the most constructive way.   Union leaders should stop playing games that harm actual workers, and the FCC must put an end this obstruction.

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