As the demand for mobile wireless services continues to explode, the search for underutilized spectrum that can be repurposed from low- to high-value commercial use never ends.  For the most part, the Federal Communications Commission under the leadership of former Chairman Ajit Pai had a good track record in this regard, including successfully repurposing the 900 MHz band, navigating the byzantine complexities of the C-Band to get that auction off the ground, and converting the 5.9 MHz band for Wi-Fi use.  But while kudos are certainly due, in fairness we need to recognize that the Pai Administration also had its missteps.

Among the more glaring examples came last fall when the Commission issued an Order to allow commercial operations in a band that was historically designated exclusively for public safety use.  Finding that the band was “underutilized,” the Commission established a mechanism under which each state can now lease all or portions of this spectrum in the secondary market for commercial use.  Significantly, any money received from these leases will not go to the U.S. Treasury; instead, all the revenues will do directly to the respective state’s coffers.  While all three of the Republican Commissioners voted for the supposed “market-based” approach embodied in the Order, the two Democratic Commissioners raised troubling issues in their dissents that cannot be ignored.

Problem #1:  Taking a Piecemeal Approach to Public Safety Spectrum

After the horrific attacks on the World Trade Center and the Pentagon, there has been a bipartisan push for the last twenty years to ensure that public safety has access to sufficient spectrum to facilitate interoperable national emergency communication.  To promote maximum network efficiency and to keep deployment costs down, public safety—just like commercial networks—needs access to large blocks of relatively contiguous spectrum (preferably prime “mid-band” spectrum).  However, because public safety is not a private use but a public service, allocating scarce spectrum to public safety requires policymakers to make the difficult tradeoff between auctioning (or in this case leasing) spectrum that can produce significant revenues or keeping that spectrum available for non-economic but socially valuable uses.

But as Phoenix Center Chief Economist Dr. George Ford and I noted in a 2011 paper, policymakers considering this tradeoff must factor in the reality that if they take spectrum away from public safety for the realization of current revenue today, then it is entirely possible that it will cost taxpayers much more money tomorrow if policymakers need to go out and find additional spectrum as public safety’s needs evolve.  For this precise reason, Congress decided to allocate the D Block in the 700 MHz band to FirstNet rather than auction the spectrum as many had hoped.  FirstNet has proved enormously successful.

Unfortunately, the Pai Commission failed to heed this important lesson.  As now Acting Chair (and then-Commissioner) Jessica Rosenworcel noted in her dissent, by “breaking up this band into a patchwork of state leases, we will further fragment the equipment market, raise costs, and decrease the likelihood of interoperable communications.”  Indeed, argued the Commissioner, the FCC’s so-called “market-based” approach “will only fragment these airwaves on a state-by-state basis. There will be no consistent and reliable information about what spectrum is available where or how it is being used—making it difficult for wireless service providers to plan or invest in deployments.”

The Commissioner’s foreshadowed concerns proved accurate this year when some states began deliberating on how to manage the spectrum.  For example, a state task force in Louisiana recommended holding a state-level auction for 10 MHz blocks by each parish.  This ill-advised approach raises serious doubts about the state’s ability to manage spectrum resources.  Divvying up the spectrum into small, bifurcated bands makes the spectrum less attractive for any commercial use and would create unwieldy intrastate interference issues.     

Problem #2:  Due Process (or More Accurately the Lack Thereof)

One of the more troubling developments at the FCC over the last several years is how both Democrat and Republican Commissions have taken shortcuts with basic due process protections when they believed the means justified the ends.  One favorite maneuver is to play games with the requirement to give adequate notice as required by the Administrative Procedure Act.  In far too many cases, the policy outcome enacted in a particular FCC final order received either passing lip service or no reference at all in the initial Notice of Proposed Rulemaking, thus depriving the public of their right to meaningful notice and comment.  Sometimes the courts have let the FCC get away with it; sometimes not.

Unfortunately, this proceeding is another one of those cases where the FCC is pushing the boundaries of adequate notice.  To Commissioner Geoffrey Starks’ credit, he called the Commission to the carpet in his dissent, noting that the Order the Commission adopted “pursues an approach that comes out of the blue.”  As Commissioner Starks bluntly observed: “It’s black letter law that agencies must provide adequate notice and an opportunity to comment before adopting a rule.  But at no point have we ever proposed effectively delegating the Commission’s spectrum authority over the band to state governments.”

Fortunately, the Commission has the opportunity to revisit its decision about the 4.9 GHz band on reconsideration.  Of note, no opposition was filed in response to the petitions for reconsideration filed by several public safety organizations.  And who knows?  After review, maybe the Commission might ultimately decide to uphold its original Order.  The difference, of course, is that unlike the first go-round, taking the matter up on reconsideration will allow the public with an opportunity to engage in meaningful comment about whether the band should instead be preserved for public safety’s use and modernized to support the 5G needs of first responders.  In so doing, this public comment will thus permit the Commission to develop a more robust record and, by extension, to engage in better decision-making about this complex problem.

Our brave first responders deserve no less.

Lawrence J. Spiwak is the President of the Phoenix Center for Advanced Legal & Economic Public Policy Studies (www.phoenix-center.org), a non-profit 501(c)(3) research organization that studies broad public-policy issues related to governance, social and economic conditions, with a particular emphasis on the law and economics of the digital age.