Study: Limiting Incentive Auction Bidding Could Cost $12B

If the Federal Communications Commission limits the participation of either Verizon or AT&T in the upcoming spectrum incentive auctions, it could reduce the proceeds by as much as $12 billion (or 40%), which could mean there would not be enough money to pay for all the spectrum broadcasters give up. That is according to research released by the Center for Business and Public Policy at Georgetown University's McDonough School of Business.

The research was conducted by Robert J. Shapiro, Douglas Holtz-Eakin and Coleman Bazelon. According to a spokesperson for Georgetown, it was funded by the McDonough School and not any outside company. The authors warn that a $12 billion shortfall -- from a potential $31 billion in proceeds with the big carriers participating to $19 billion without -- could mean that there might not be enough to build out the national interoperable public safety broadband network and pay the $2 billion in broadcaster re-packing costs and be able to pay for "the full amount [of spectrum] made available by the broadcasters." The research also indicated that if the wireless carriers were discouraged or prevented from bidding, their plan B would be deploying less efficient technologies that would ultimately cost consumers. They estimated that strategy could increase monthly bills by 9%.