Spectrum Auctions? There's an App for That

[Commentary] What if the federal government could improve its finances by $25 billion without cutting spending or raising taxes? What if this also boosted the value of fast-growing industries by several times this amount? It's no wonder the budgets proposed by both President Obama and Rep. Paul Ryan include what sounds too good to be true, but is just another miracle of modern technology.

This windfall could come from a new approach to government allocation of airwaves, moving use to the booming mobile and broadband industries from underuse by older technologies such as television. There would be more bandwidth for smart phones and tablets to allow everything from distance learning to mobile apps. The federal government has never had a good way to free up spectrum for better uses as technology changes. Today's issue is that "over the air" television broadcasters, which now serve only 10% of households (those lacking cable or satellite access), own spectrum they don't need. But there's no mechanism to let them sell it to newer industries. The big opportunity is to use a new form of auction so that the market decides where spectrum belongs. Auctions have long been an innovative way to substitute economics for politics.