Feb 27, 2017

FCC auction model can solve other national challenges

The FCC is wrapping up the most complicated spectrum auction in history. Broadcast stations voluntarily sold airwaves. In return, they'll get $10 billion from wireless companies, who are buying those frequencies for more than $19 billion to provide more mobile broadband. And the Treasury will collect about $7 billion for deficit reduction.

This auction was the product of a multi-pronged government effort. The FCC conceived the plan in 2010. The Republican House wrote the legislation and a bipartisan Congress passed it in 2012. The FCC passed the necessary rules and executed to plan. Buyers and sellers made their bids. Everyone succeeded.

Now it's time to apply the same approach to other national challenges.

Healthcare: To lower costs, improve quality, and fairly pay doctors and hospitals everyone must participate in a market-based system of buying insurance. This is, like the spectrum auction, a two-sided, complex, and intricate process. On one side are human beings who do not know what care they will need or when, and on the other side are insurers and providers. Only government is in the position to figure out how to make a market where everyone buys and insurers sell to everyone.

Energy: The sun, wind, and hydro sources of power are cheaper than carbon fuels and do not depend on foreign-controlled resources. But between the point of generating electricity and its consumption in homes, offices, and factories is a complex distribution network. This too is a two-sided network: generation on one side, consumption on the other. Only government can organize this technically complex network so that it delivers the cheapest possible electricity to everyone, while opening the door to massive infrastructure investment.

Transportation: Hundreds of different regional, state and local government units own and control more than 90% of roads, bridges and tunnels. Since they all connect to each other, no business or government can throw money at transportation infrastructure without knowing each other's larger plan. States and local governments should collectively decide when to charge user fees and privatize when necessary. In other words, a government plan should help drive the process.

The goal in these areas is to lower costs and to expand quality of service — therefore increasing the standard of living for all Americans. This is what the FCC just did for wireless service, one of the most commonly used of all infrastructures in the economy today. The government has the potential to transform these other major building blocks of the economy.

Reed Hundt is CEO of the Coalition for Green Capital and former Chairman of the Federal Communications Commission.

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