Regulation can impede FCC efforts to get more spectrum online...

to impose) significant conditions when firms seek to repurpose spectrum from a low-value to a higher-value use acts as a ’tax’ and thus reduces the incentives of firms to offer spectrum to, and acquire spectrum in, the secondary market,” the paper argues (http://xrl.us/bnpgm5). “As a result, ’taxation by condition’ will discourage the larger scale transactions necessary to resolve spectrum exhaust.” If the FCC wants to address spectrum exhaust, “’taxing’ efforts to repurpose spectrum to higher-valued uses like mobile data in the form of license conditions is perhaps the worst of all policies,” the paper said. “Instead, barring legitimate competitive or interference concerns, efforts to repurpose spectrum from low- to high-value uses should be expeditiously approved without extraneous conditions. Moreover, regardless of the Commission’s (or other’s) social goals (e.g., universal broadband), the costly and often implicit restrictions on trading spectrum rights is an enormously bad way to achieve those objectives.” The equation is simple, said Phoenix Center Chief Economist George Ford, co-author of the report. “If you want more of something, then you don’t tax it,” he said. “If the FCC wants more spectrum for mobile data, then the agency must avoid imposing hefty taxes in the form of conditions on private efforts to solve the spectrum crisis. A requirement to ‘pay the vig’ impedes the development of a secondary market for spectrum and influences the type of transactions we do see. It’s bad policy."