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President Barack Obama has inserted authorization for his long desired wireless spectrum auction into American Jobs Act.  (Source: Newscom)

The auction would allow TV broadcasters to sell unused spectrum to wireless carriers, splitting the profits with the government. Wireless carriers could then use the spectrum to speed up smart phone connections.  (Source: Backpack Tactics)

The government would use its earnings to create an emergency broadcast Wi-Fi network to be used by firefighters and police during emergencies.  (Source: Corbis)
Spectrum sale would eventually boost 4G speeds and coverage, fund a national emergency Wi-Fi network

Sneaky, sneaky -- remember U.S. President Barack Obama's big American Jobs Act, which he was plugging before the NFL season opener last Thursday?  Well, the proposed legislation was released Monday and it included a little something extra -- proposed authorization for the U.S. Federal Communications Commission to hold a special wireless spectrum auction, something President Obama has long been pushing.

Telecommunications companies like Verizon Communications Inc. (
VZ), AT&T, Inc. (T), and Sprint Nextel Corp. (S) have been pushing for this auction for a long time.  They warn that they're running out of spectrum to deploy faster 4G wireless connections.  Meanwhile, they point out that many TV broadcasters are sitting on large unused chunks of spectrum.

The auction would likely be held sometime early next year and would be an incentive-based auction.  TV broadcasters would not be required to participate, but those who do would split the profits of sales of their unused spectrum with the government.

A handful of TV broadcasters are excited about the potential revenue from the option.  But a noisy contingent has protested the auction.  They claim that the FCC has not sufficiently considered interference that use of the spectrum for wireless devices might cause.  Thus they argue that their fellow broadcasters 
should not be allowed to sell their spectrum, and the auction should be scrapped.

The proposed spectrum auction has largely stalled thus far due to these protests.  Now it may finally advance.

If the auction is authorized, it would use $6.5B USD raised from the auction to 
fund the national Wi-Fi emergency broadcast network.  Firefighters, police, and other first responders would utilize the network.

The network was first proposed in the wake of the 9/11 terrorist attacks of 2001 after emergency responders struggled to communicate with each other in the chaotic aftermath.  In early 2009, at the start of Obama's presidency an auction looked to create a public/private partnership to fund the network.  However, the auction failed due to lack of interest.

If the new plan succeeds, a 10 MHz block of the 700 MHz band -- the so-called "D-Block – would be applied to building the new network.  The majority of funding would go towards building physical wireless networking infrastructure into most major U.S. cities and securing the resulting network.

In his letter to Congress, Obama promotes the act, but doesn't spend much time specifically promoting the auction provision.  He writes:

To create jobs, I am submitting the American Jobs Act of 2011 -- nearly all of which is made up of the kinds of proposals supported by both Republicans and Democrats, and that the Congress should pass right away to get the economy moving now. The purpose of the American Jobs Act of 2011 is simple: put more people back to work and put more money in the pockets of working Americans.

However, he faces resistance in the House and Senate from his Republican rivals. Representative Eric Cantor, the Republican party House Majority Leader, writes:

What Washington needs and what the American people need is for us to find some agreement and there are plenty of things we can agree on. For instance, on the need for infrastructure spending, we believe that states have monies right now, but Washington has tied up their ability to use those monies. We want to straighten out the system of how money is spent before we start spending more.

We don't support the idea of creating a Fannie and Freddie for roads and bridges in an infrastructure bank. We believe that you can facilitate a better flow of funds to construction projects by fixing the current system. There's plenty for us to work on together. Instead of trying to accentuate where differences are, because good people can disagree, let's try to produce results so the middle class can get back to work in this country.

Like the President, most Republican rivals haven't directly commented on the auction and emergency network deployment plans (though Rep. Cantor's comment seems to allude to the latter deployment).

Thus the fate of President Obama's latest effort to push through the incentive-auction of unused TV spectrum largely rests on his ability to sell the Jobs Act as a whole.



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RE: Should Be Separate
By Manualshift on 9/15/2011 7:49:02 PM , Rating: 2
A national sales tax is not a good idea.

The only benefit to the economy i can think of is that illegal money will now contribute....I do like that part.

But the downside far outweighs it. The group that is pushing for a national sales tax is the banks and credit card companies. It would be a windfall for them. Do you really want to be paying interest on your federal taxes as well as your state, which you already do? The percentage of consumer spending that would be diverted to paying interest on taxes would hurt the economy that much more. It would also take away buying power from many that don't have much to begin with.

Think about what your asking for before you get it. Figure out how it would affect a new car purchase with an average car transaction price of $25k+. That's a lot of interest to be paying on taxes.


RE: Should Be Separate
By bigdawg1988 on 9/16/2011 12:54:15 PM , Rating: 2
Well said. Besides, rich people spend far less of their money than they earn (except musicians and athletes). And a lot of rich people don't earn income the same way you and I do. They don't make a paycheck, they earn money through investments. But those investment profits are not taxed at the same rate as income, it's much lower.
And that whole argument about the bottom 50% not paying taxes being unfair is far too simplistic and I wish people would give it up. ]
Try living at the poverty level in this country and let me know how much you have left over to pay for taxes. Besides, we need poor people to keep prices low. Imagine if Walmart had to pay their workers $15/hr. and provided insurance. Think how low their prices would be. Look around at your clean office. Think how much less money for bonuses there would be if the cleaning people were paid more.
Our economic system is not based on "fairness" and neither are the taxes. The reason why rich people should pay more is because they can. Can't squeeze blood out of a turnip and you can't get taxes from no income. Ask Bill Gates and Warren Buffett (and several other billionaires) if they pay their fair share. It's the bottom 98% that spend the money that keeps the top 2% wealthy anyway. Let the top dogs kick in more. They'll get it back anyway....


RE: Should Be Separate
By Keeir on 9/16/2011 7:07:48 PM , Rating: 2
Ouch.

So many problems.

#1. Investment "income" comes in two flavours. Capitol Gains and Dividend. In the case of Dividend payments, the vast majority is supposed to be taxed at the corporate level at ~35%. Capitol Gains means wealth is transfer from one private party to another private party. This is very different from income earned from a job.

The issue with our taxation system is that it has become so complicated that the knowledgable and well-connected get gigantic breaks and politicans have used it to secure breaks by pandering to the lower classes with nominal credits.

Probably the whole system needs a reset.

I might point out there is a difference between "Fair" and "Moral". It is not "Fair" to charge people significantly more to live in the same country/consume the same product. It may be "Moral", but it is not "Fair".


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