Spectrum Auctions

Author: Preston Brashers

TOPLINE:

The One Big Beautiful Bill (OBBB) reinstates authorization for the Federal Communications Commission (FCC) to hold competitive spectrum auctions and opens more spectrum for private use.

BACKGROUND:

Radio and TV broadcasts, mobile cell networks, 5G broadband, GPS, and satellite communications all transmit signals within some band of the radio spectrum. Different bands are distinguished by the frequency of the signal in cycles per second (i.e., hertz, kilohertz, megahertz, or gigahertz).  Since 1934, the FCC has managed the use of radio frequencies for nonfederal radio communications. In 1993, Congress authorized the FCC to hold competitive auctions of spectrum licenses for fixed time periods. Congress periodically renewed and extended that authority for 20 years before it ultimately lapsed on March 9, 2023.

Lawmakers in 2017 likely didn’t intend for R&D amortization to ever take effect. The general expectation was that Congress would fix or defer the R&D provision before it took effect. Unfortunately, Congress failed to act before R&D amortization took effect in 2022. It was still the law of the land until OBBB was enacted.

What OBBB Did:

• Reauthorizes the FCC to conduct competitive auctions of spectrum beginning September 30, 2025, while reserving certain bandwidth for military and core governmental purposes.
• Requires the FCC to auction and license at least 300 MHz of spectrum within two years. That must include 100 MHz of the “upper C-band,” an underutilized spectrum band that is attractive for expansion of 5G and satellite communications.
• Requires federal agencies to identify 500 MHz of spectrum that is now limited to federal use to be redesignated and auctioned within eight years. At least 200 MHz of such spectrum must be auctioned within four years.

Why It Matters?

• Businesses and individuals in the modern information economy send and receive vast quantities of information every second.
• The proliferation of artificial intelligence will only increase private demand for spectrum and improved communication networks.
• Competitive spectrum auctions are an efficient, market-based solution to help ensure that this limited resource is put to its best use, as those who assign the highest value to the spectrum licenses win the rights to use them.
• In 2020, FCC auctions of C-band spectrum raised $81 billion, five-times more than the $15.4 billion that CBO had projected for a bill introduced the prior year.

Where Can I Find Changes?

OBBB Section 40002; 47 U.S.C. § 309(j)(11).

BOTTOMLINE:

Authorization of spectrum auctions is a hidden gem (one might even say invisible to the human eye) that will facilitate more growth and innovation, helping America stay ahead of its adversaries. 

This memo is part of the One Big Beautiful Booklet, a collection of more than 60 memos that examine and summarize the major aspects of the One Big Beautiful Bill – the signature legislative achievement of President Trump and the 119th Congress.