fixed wirelessThe AIRWAVES Act introduced in Congress would dedicate 10% of the proceeds from several upcoming spectrum auctions to expanding rural wireless coverage. A new report estimates that at least $1.5 billion could be raised for rural wireless in upcoming auctions of spectrum in the 24 GHz and 28 GHz bands, with additional funding to come from other auctions.

The report, titled “Assessment of the Economic Impact of The Airwaves Act,” comes from Telecom Advisory Services and was commissioned by the Competitive Carriers Association.

The full name of the AIRWAVES Act is the “Advancing Innovation and Reinvigorating Widespread Access to Viable Electromagnetic Spectrum Act.” The bill, sponsored by Colorado senator Cory Gardner, would require the FCC to complete auctions during each of the next three calendar years and to dedicate 10% of auction proceeds toward rural wireless.

The report’s estimated economic impact of the proposed AIRWAVES Act is based only on forecast results for two auctions, however, because it is too soon to predict beyond that, the authors said. The two upcoming auctions studied include the 28 GHz band auction (Auction 101) and the 24 GHz band auction (Auction 102).

The authors expect to see considerably more money raised in Auction 102 than in Auction 101. According to them, the issue is that the 28 GHz spectrum auction will not cover the entire U.S. but only 61.7% of the land mass and 23.7% of the population. The report authors estimate that Auction 101 is likely to generate between $41 million and $1.1 billion, with the most likely scenario being about $561 million. Auction 102 is expected to generate between $334 million and $27.5 billion, with $14 billion being the most likely scenario.

The amount of money to be available for rural wireless from the two auctions would likely be in the range of $1.5 billion (or 10% of total “most likely” revenues). Using this estimate, the report details a range of economic benefits that the authors see potentially flowing from the AIRWAVES Act, including a long-term economic impact of $1.2 billion on the agricultural sector, $3.3 billion on the healthcare sector and $893 million on the transportation sector.

All figures in millions

Rural Economic Impact
Other economic benefits that could result from the AIRWAVES Act, as detailed in the report:

  • A short-term network construction economic impact of $2.5 billion, including a $553 million direct impact and $1.9 billion indirect impact
  • Job years created from network construction would be 9,668, including direct and indirect jobs. A job year is one job for one year.
  • An increase in 4G coverage of up to 1.08 percentage points, with a more likely estimate of .55 percentage points. Although this may sound low, the authors argue that this would reduce the rural coverage gap between 12% and 24%.

Image courtesy of flickr user Stefano Brivio.

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