FAQs

  1. What is the purpose of the proposed spectrum license fee?

    • To generate revenue for the government and help reduce the deficit.
  2. How much would the annual fees be?

    • Starting at $50 million in 2009 and gradually increasing to $550 million per user per year.
  3. When would the fees start?

    • In 2009.
  4. Who would pay the fees?

    • Wireless carriers that license wireless spectrum from the government.
  5. Why is the government running out of airwaves to auction?

    • Wireless spectrum is a limited resource.
  6. How much revenue does the government predict it will generate from wireless auctions over the next 10 years?

    • $4.8 billion.
  7. How much would the additional fees help reduce the deficit by 2013?

    • Half.
  8. What are the arguments against the proposed fee?

    • The wireless industry opposes it, arguing that it would increase costs for consumers.
  9. What is the CTIA’s stance on the proposal?

    • It is still reviewing the proposal.
  10. What is the likelihood of Congress supporting the proposal?

    • Higher than in the past due to the Democrat-controlled Congress.
  11. When are more details about the proposal expected?

    • Later this spring.
  12. What is the next step in the process?

    • Legislation would be required for any changes to the fee structure, which the wireless industry is likely to fight against.

Summary

The Obama administration is proposing a new spectrum license fee on wireless carriers to help generate revenue for the government and reduce the deficit. The fees would start at $50 million in 2009 and gradually increase to $550 million per user per year over the next 10 years, generating an estimated total of $4.8 billion over that period. The fees would be in addition to license fees that operators have already paid as part of the Federal Communications Commission’s (FCC) wireless auctions.

The government is running out of wireless spectrum to auction, and the proposed fees would help to offset the decline in revenue from this source. The Obama administration predicts that it will only be able to generate about $4.8 billion in revenue from wireless auctions over the next 10 years. The proposed fees could help to halve the deficit by 2013 and fund several new spending initiatives.

The proposal has been met with resistance from the wireless industry, which argues that it would increase costs for consumers. The industry has successfully opposed previous spectrum fee proposals, but theDemocrat-controlled Congress may be more willing to support President Obama’s plans.

More details about the proposal are expected later this spring when the administration releases a more detailed budget package. The wireless industry is likely to fight hard against any changes to the fee structure, but the government is determined to reduce the deficit and fund new spending initiatives.

If you have any questions about the proposed spectrum license fee, please visit the following website for more information: [website address]