Government Is Wasting Spectra the Private Sector Needs

W acky causes, politicized handouts, and improper payments — these are what usually come to mind when you think of government inefficiency.

You probably wouldn’t think of cell service, but it is a major example of government waste standing athwart innovation. When they’re finished with USAID, the Department of Education, and Medicare, Elon Musk’s efficiency crusaders should look to government-owned radio spectrum that could be better used by the private sector.

At his confirmation hearing last month, secretary of commerce nominee Howard Lutnick pointed out that the Department of Defense is hoarding prime spectrum, which enables all wireless communications, that could be better used by the private sector: “There’s enormous amounts of spectrum held by the Department of Defense,” Lutnick told the Committee. “I’d like to try to help us drive some of that spectrum towards our businesses.”

This is an encouraging sign that the Trump administration will take the need to resume auctions for licensed use seriously, something over which the Biden administration consistently wallowed in indecision. Demand for licenses is skyrocketing, yet DoD holds significant unused bandwidth. It’s a prime example of federal overreach and a missed opportunity for economic growth.

Auction authority expired in 2023, and Congress has failed to come to an agreement since then about how to resume. Since the current system came into effect in 1994, FCC spectrum auctions have generated more than $230 billion in revenue. In addition to revenue generation, this competitive bidding system ensures that telecommunications networks remain anchored to market principles.

For two years, DoD and their allies in the Senate have been standing in the way of an agreement that resumes the sale of licenses and allows more spectrum to be auctioned. Their opposition is bad for national security. Technologies from 5G and 6G networks to Wi-Fi to data streams for next-generation AI technologies are key to competing with China. DoD should recognize that more commercial spectrum is a national security priority, not a concession to civilians.

Aside from auctions, unlicensed spectrum also adds value to the U.S. economy by powering WiFi. While the U.S. has ground to make up against China on licensed deployments, it is significantly ahead in WiFi technology, but it cannot improve if DoD continues to hoard spectrum it barely uses.

So far, these arguments have found little purchase with Pentagon careerists, who have stonewalled with a series of working groups and reports that say little of substance. But there is an opportunity to break the logjam with the reconciliation bill congressional Republicans are currently crafting.

Budget reconciliation can be done once per fiscal year and can only affect revenue and spending — that is, it can raise taxes, lower taxes, raise spending, lower spending, or liquidate government assets to generate revenue — but cannot change other policy and must be deficit-neutral. As long as a bill meets these stipulations, it takes only a simple majority to pass the Senate, averting the 60-vote threshold usually required to pass legislation.

DoD and their Republican champions in Congress are requesting between $100 and $200 billion for defense spending in the package. This is a huge ask with Republicans trying to extend expiring provisions of the Trump tax cuts from 2017 in a bill that has to be deficit-neutral. DoD can get what it wants by relenting on spectrum: To generate revenue to pay for defense spending, it should identify bands of spectrum it doesn’t need and put them up for auction. DoD is in no position to both refuse to sell its unused spectrum and demand $100 billion or more in new spending. If it wants more spending, it can help pay for it.

The lion’s share of revenue generation from spectrum auctions has historically come from exclusive licenses that will enable 5G and 6G deployments. The government does not necessarily need to exclusively license everything, especially with the continuing demand for WiFi, but DoD should be expected to supply a robust FCC auction that can generate the revenue it wants without forestalling tax extensions or further cuts.

Spectrum auctions will accelerate economic development, privatize underutilized government assets, and help pay for DoD’s requested spending without ruining the CBO score for extending tax cuts. This is a win-win-win for DoD, industry, and proponents of government efficiency.