By Sara Jerome - 04/06/11 07:45 PM EDT
The officials said airwave auctions are the way to help all Americans gain access to the mobile Internet, which was one of the goals outlined in President Obama’s State of the Union address.
Goolsbee said the increasing use of broadband requires the government to confront a "major challenge:" a spectrum crunch that could occur as more people use iPads and BlackBerries to watch video and surf the Web.
"Over the next give years, from 2010 to 2015, we'll see five times as much wireless traffic," Goolsbee said.
To address the demand, the White House and the FCC have been asking Congress for months to give the Federal Communications Commission (FCC) the authority to hold spectrum auctions.
The auctions would offer incentives to TV broadcasters to sell off their airwave holdings to mobile companies.
Backed by a room full of economists, FCC Chairman Julius Genachowski argued that the spectrum auctions are an essential step.
"There’s no questioning the incredible opportunity that mobile broadband presents — opportunity to spur economic growth, create jobs, enhance our global competitiveness, and improve our quality of life," he said.
Proponents bolstered that argument by unveiling a letter signed by 112 economists who support spectrum auctions. They said it included experts who have served in Democratic and Republican administrations.
"These are economists from across the spectrum, so to speak," Genachowski said. "They disagree on many things, but they agree on the importance and necessity of voluntary incentive auctions."
"It's essential that we move quickly," he said. "Every day we delay … is a day with real costs for consumers."
Still, the auctions face a major hurdle: the FCC needs permission from Congress to move ahead.
A bipartisan group of members in both chambers has expressed support for the policy, but they are also listening closely to broadcasters who are wary of how the plan would be implemented. Broadcasters question whether the spectrum crunch is being exaggerated by the wireless industry, which is hungry for move airwaves.
The National Association of Broadcasters (NAB) says it is okay with spectrum auctions as long as participation by TV stations is truly voluntary. They fear broadcasters could be forced to relinquish their spectrum.
Senate Commerce Chairman Jay Rockefeller (D-W.Va) has introduced legislation that would give the FCC auction authority. House Republicans will hold a hearing next week to dig into the issue.
House Energy and Commerce Communications subcommittee Chairman Greg Walden (R-Ore.), a former radio industry executive, has made it clear that he does not want to broadcasters to be pushed around if auctions are approved.
White House officials and the FCC chairman sought to reassure the broadcasters on that point by emphasizing that the auctions will not be mandatory.
Economist Paul Milgrom of Stanford University said the voluntary nature of the proposal is key to making sure it is a market-based mechanism.
"If you get into a habit of seizing assets that people think they own, you undermine the free market," he said. "I think that's a really bad idea."
Milgrom and others advised Congress to stay above the fray when it writes the legislation and let the FCC decide how to proceed.
"Setting up an auction involves some details that the FCC has shown itself capable of doing in the past. It would be very hard to write [specific rules] into legislation and get it right the first time," Milgrom said. "The FCC needs to be allowed the flexibility to do this correctly."