Tax day is behind us, and we’ve all paid our tab, well hopefully you did otherwise the IRS might read your email! If only there was some way for the government to raise money to pay down debt and support programs without flipping our couch cushions in search of Benjamins.
So I turned on my TV, powered up my lap top and picked up my cell phone, then it hit me …. Spectrum! Yes, spectrum is the stuff that makes TV, internet, and cell service go; and yes, the government controls that valuable asset. I wondered, how exactly are they getting that asset to market and raking in the dough, so that we can not only save some tax cash, but also have access to more communications services that Americans down right crave.
Let's explore and break down the numbers. When lots of cooks have their hands in the pot, its easy to sneak in some arsenic …
The Congressional Budget Office estimates that the upcoming broadcaster auction will “yield $6.5 billion toward deficit reduction out of a total estimated take of $24.5 billion after compensating licensees for exiting.” However, the amount of the incentive auction would also depend on "the willingness of two satellite licensees and dozens of television broadcasters to sell their existing spectrum rights at a price that is below the market value of their licenses."
$24.5 billion! $6.5 billion toward the debt!? That would be nice; however, a date hasn’t been officially set, and these numbers are based off of the initial American Reinvestment and Recovery Act, which assumes 124 MHz going back into the market. However, experts agree the best we can hope for is the auctioning of 84 MHz. FCC Chairman Genachowski expressed a desire for 35 MHz of unlicensed, so that cuts down on revenue. Plus, the Department of Justice recently said they want the two companies that are best poised to spend significant amounts and deploy spectrum efficiently to be limited in their ability to participate in the auction.
Not to mention, its not clear whether that 18 billion used to relocate broadcasters includes the cost of the public safety network(I am pretty sure it doesn't), which, after the passage of the Middle Class Tax Relief Act maybe a bit more difficult – read expensive. Yes, MCTRA doesn't wan tan efficient network of networks, it wants to usurp the whole public safety system – take it away from state control and base it in DC. The NTIA has already claimed 2 billion and is going to want at least 6 billion more to continue that process after precluding grants that they issued that were in the process of developing more effective regional networks.
Wait that’s another $8 billion That is supposed to come out of the broadcaster incentive auction. If that $8 billion isn't already in the relocation estimate already, then taxpayers are actually on the hook for anther $1.5 billion. But donchaknow how they low ball those estimates. Some speculate another $10 billion could be necessary for the FirstNet build out….
Sorry guys, I thought the government might actually do some accounting and budgeting and try to save our nation some money; get gazelle on their debt. My bad, better luck next time? Maybe the government will start accounting for the 70% of spectrum they hold and won’t audit for auction. Yeah, chew on that one.