CES 2012: Genachowski: We Need Incentive Auction Law, Now

By Greg Tarr -- TWICE, 1/11/2012

LAS VEGAS - In his third annual International CES summit, FCC Chairman Julius Genachowski said the country needs to come together to support universal  broadband adoption by the end of the decade.

Genachowski, who was interviewed by CEA president Gary Shapiro,  said to do that the country needs incentive spectrum auctions to free up more space for wireless Internet service.

"We need ubiquitous broadband," he said.

Genachowski said that since being appointed to the FCC, he has directed the agency "on a mission of harnessing the power of broadband internet to drive economic growth and benefit all Americans."

In walking the floors of International CES 2012, he said the show presented over 3,000 companies with virtually every product on the floor fueled by wired and wireless broadband Internet.

 "If you shut off the Internet, virtually nothing on the CES floor would work," he observed, adding the value of almost every device at the show goes up as bandwidth goes up.

Genachowski said he believes that "if we don't create innovation zones based on massive broadband in the U.S., other countries surely will" and capital and jobs will flow in that direction.

Genachowski said incentive spectrum auctions will help generate badly needed spectrum to close the gap of the nearly 100 million Americans who do not have broadband at home today.

Universal broadband adoption in necessary, he said, "so that every American will take advantage of our twenty first century communications platform, for finding and landing jobs, for connecting to education in and out of the classroom for taking health care information and participating in the community."

The Commission has already taken steps to remove some of the barriers to wired and wireless broadband build out,  by encouraging public and private initiatives to drive the industry.

The efforts, he said, will help generate 100,000 broadband-enabled customer service jobs in the next two years, he said.

 "The opportunities of a broadband economy are huge, and so are the challenges," Genachowski said, with the greatest opportunities and challenges coming from mobile broadband.

"We now have the most 3G subscribers in the world," he said, and "we have a strong early lead in getting to scale in 4G."

"Private investment in a mobile broadband economy is up by double digit percentages, driving real job creation with projections for even greater job creation over the next few years," he said.

Incentive auctions, Genachowski said, will encourage spectrum holders to turn in bandwidth that can be auctioned off, generating some $25 billion for the Treasury.

"We need to get it done now, and we need to get it done right," he urged.

Genachowski pointed out that the U.S. was the first country to free up white space from unlicensed spectrum.

The FCC, he said, has sounded the alarm about a "spectrum crunch" for three years, and nowhere is there a bigger crunch than at CES this week.

Without incentivized spectrum auctions, Genachowski warned demand will swell and slower speeds and higher prices will result, as innovators turn to other countries, taking jobs and innovation with them.

Genachowski said the Senate Commerce Committee voted 21-4 to give the FCC authority to operate incentive auctions, and it would be wrong to pre-judge and micro-manage that by setting rules that would restrict designating any spectrum for unlicensed use.

Congress is to make a decision on a law enabling the FCC to proceed with incentive auctions by March 1. "At stake is U.S. leadership in mobile," Genachowski said.

He pointed out that wireless carriers now embrace Wi-Fi as part of their networks.

 Genachowski said he would also like to stop the FCC from imposing eligibility rules for auctions, adding that spectrum planning is complex and technical work, and America's lead in broadband could be lost, and with it investment capital and jobs.

He challenged "myths" that the Internet has helped lose jobs, correcting that the Internet creates 2.6 jobs for every one it eliminates, and does so all over the country - not just in Silicon Valley.

As for future incentives, Genachowski told Shapiro that the Communications Act of 1996 was written for different technologies and different infrastructure and should be updated, although a reform to the law is not being actively considered.

On net neutrality, Genachowski said he was proud of the work that the Commission had accomplished and that a pending Verizon lawsuit challenging the those regulations was distracting and could create uncertainty and confusion in the market.