Technology

Wireless Capacity Is Running Thin, but Spectrum Auctions Can Save 5G

Billions of dollars in government revenue is a no-brainer.

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Two hands holding up bidding signs in front of an orange background—on either side is a dark green background, with lighter green radio waves. | Illustration: Lex Villena; Lightfieldstudiosprod | Dreamstime.com
(Illustration: Lex Villena; Lightfieldstudiosprod | Dreamstime.com)

The future of the internet is becoming increasingly more mobile. Cars, remote patient monitoring devices, and smart houses all run on some form of wireless internet. Even most consumer-facing artificial intelligence applications are run through mobile apps, such as Perplexity AI and OpenAI.

With more online applications going mobile, more data will need to travel over our wireless networks. We are already seeing AI's impact on 5G networks. The ubiquity of AI applications, such as AI-powered assistants and augmented reality platforms, "will soon drive mobile data traffic beyond the capacity of current 5G networks," according to a report by Mobile Experts. We may start seeing capacity issues as soon as 2027, unless wireless broadband infrastructure gets a much-needed upgrade.

Wireless broadband is fueled by radio spectrum—the invisible real estate that makes your device mobile—and we don't have any more fuel to give.

The federal government sits on nearly 60 percent of all useful spectrum for wireless internet networks. Unfortunately, government agencies have a penchant for hoarding spectrum unless Congress tells them to release it. Don't count on them to help us out.

However, a lack of spectrum is only part of the problem. Because the Federal Communications Commission's (FCC) spectrum auction authority expired in 2023, there's no efficient way to get spectrum to the market in time to beat the 2027 time frame.

This is a disaster.

None of this was the case in President Donald Trump's first term. The FCC was armed with both spectrum auction authority and a healthy spectrum pipeline. This allowed the FCC to open up more than 6 gigahertz of spectrum for licensed 5G services, including more than 600 megahertz of mid-band spectrum to expand wireless capacities.

Moreover, auctions were essential to the Trump administration expeditiously distributing the fuel for 5G networks. Because it had spectrum auction authority, Trump's FCC allowed private carriers to get their systems up and running in just three short years.

Now with neither FCC spectrum auction authority nor a healthy spectrum pipeline, the Trump administration will have a tough row to hoe to recreate the same success.

To its credit, Congress tried to solve the problem three years ago. The House passed the bipartisan Spectrum Innovation Act without dissent. The act would restart the spectrum pipeline with an auction of 350 MHz of 3.1 GHz mid-band spectrum to upgrade our wireless networks, reauthorize the FCC's spectrum auction authority, and require studies on how to repurpose underused bands, like the 7 GHz band. The act also provided a framework to help the FCC open more spectrum from government-occupied spectrum for private use. This measure alone would have quelled many of the issues with respect to our networks' capacity to facilitate the acceleration of revolutionary innovations like AI.

Alas, the legislation was stymied in the Senate and died on the vine. Worse, there's been no real push to reintroduce it since.

But there may be an opportunity to turn the tides.

Congress is attempting to pass another massive spending bill and is desperately looking for "pay fors" to help ensure the federal deficit doesn't balloon. The beauty about spectrum bills is they not only pay for themselves but also contribute to lowering the cost of Congress' overall spending because of how much money the auctions bring to the Treasury.

Auctions during the first Trump administration led to $103 billion in revenue for the United States. The 3.45 GHz spectrum auction brought in $21.8 billion alone. This is an astounding figure given that the 3.45 GHz auction only included 100 MHz of mid-band spectrum (equaling $218 million per 1 MHz).  Better yet, it only took about 18 months (from start to finish) to clear government users within that band and get it into the hands of private carriers.

Just imagine if we auctioned the spectrum outlined in the Spectrum Innovation Act. Based on the proceeds from the 3.45 GHz auction, auctioning the lower 3 GHz could bring in $76.3 billion to the Treasury given that it has about 350 MHz of spectrum ripe for auction.

Better yet, the Biden administration identified the 7–8 GHz bands as another contender to replenish our spectrum pipeline. Those bands have at least 125 MHz of licensable spectrum, which adds another $27 billion in revenue.

FCC Chairman Brendan Carr has suggested bands that build on mid-band spectrum already in the market, like in the 4 GHz range. This band will not only allow us to handle the tsunami of data transmissions we'll see from AI, autonomous vehicles, remote surgeries, and beyond, but also has 500 MHz of actionable spectrum. Even if the FCC auctioned 350 MHz, that would be another $76.3 billion into the Treasury.

That's at least 825 MHz of mid-band now in play and just under $180 billion into the Treasury too.

All of this doesn't even include other revenue-generating opportunities, like further auctions in the C-Band or a potential broadcast incentive auction. Frankly, Congress not considering this option to offset its spending is legislative malfeasance. Reauthorizing the FCC's spectrum auction authority with a spectrum pipeline is an opportunity to bring in revenue and better ensure the integrity of wireless networks well within Trump's presidential tenure.