Congress finds funds in the airwaves

Parts of the broadcast spectrum will be auctioned off to help cover the costs of the payroll tax cut and extended long-term unemployment benefits. Even a sliver of spectrum could bring a big chunk of cash.

Kai Ryssdal: The bipartisan meeting of the minds in Washington over the payroll tax cut and extended unemployment benefits became official today. There was some nose-holding by members on both sides of the aisle as they voted, but the House and Senate did approve the social security tax holiday that will continue through the end of the year. Millions of americans who've spent long months trying to find a job will keep getting long-term unemployment benefits, although the program will wind down as part of the deal. The current 99-week maximum for benefit checks will be trimmed to 73 weeks by September.

Political compromise, though, most definitely does not come cheap. $120 billion over the next five years is the estimate from the Congressional Budget Office. Where are they gonna find the money? For one thing, Congress plans to auction off parts of something called the spectrum.

Our senior business correspondent Bob Moon walks us through the selling of the public airwaves.


Bob Moon: You've got your AM and FM radio, TV stations, Citizens' Band, police, fire, military, air traffic control, radar -- and even car-door key fobs. They all use different frequencies of the radio spectrum. But it's the exploding popularity of smartphones and streaming video that's turned wireless onramps to the information superhighway into a frustrating crawl at times. And the Federal Communications Commission is only expecting the jam to get worse.

Glenn Fleishman is a tech writer for The Economist online.

Glenn Fleishman: Just like you could only fly a certain number of planes through the air at the same time, wireless spectrum works in much the same way. You have a certain amount of air space, and you can only send a certain amount of  wireless data or voice data through that space.

The FCC's answer is to clear more space in the wireless spectrum, and sell it to the highest bidder. Open frequencies are in high demand, even as channels set aside for the nation's TV broadcasters go unused. Christian Sandvig is a media professor at the University of Illinois at Urbana-Champaign. He says most of us have cable.  

Christian Sandvig: By some estimates, you might say about 9 percent of the population of the United States is watching television over the air, and dropping. On the other hand, the population of people who want to use cell phones, especially smartphones, to do things like browse the Web, keeps increasing.

So Congress has decided to auction off slivers of the spectrum, hoping to raise around $22 billion. TV stations will be given a small share of the proceeds, if they agree to give up the channels they were authorized to use for free.

Sandvig: Here -- if you just get off this spectrum, we'll give you some money.

You could call it making money out of thin air.

I'm Bob Moon for Marketplace. 

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.

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