President Barack Obama’s budget proposal on February 1, 2010, indicated that the Federal Communications Commission (FCC), the US telecom regulator, could get an estimated $6.4 billion boost from the use of spectrum (radio airwaves) over the next ten years.  
 
In his fiscal 2011 budget proposal, the US president proposed the extension of FCC’s authority to auction spectrum, which is slated to expire on September 30, 2012. This would bring in at least $1.6 billion by way of revenue for the US government from auctioned licensed spectrum through 2020. The move is aimed at fostering a widespread accessibility of broadband and associated technologies in the country and boost adoption in urban regions.  
 
Moreover, President Obama has proposed new user fees for unauctioned spectrum, which could garner another $4.8 billion. The budget proposal, which is subject to the approval of the Congress, will give the FCC a new authority to determine and establish user fees on unused airwaves.
 
The FCC is expected to submit the “National Broadband Plan” to the Congress on March 17, 2010. The agency is setting up strategies and an appropriate regulatory framework to promote adoption, affordability and wider availability of broadband in the US. The FCC presented a status report on the National Broadband Plan on January 20, 2010.
 
A key recommendation that is likely to feature in the National Broadband Plan is the overhaul of Universal Service Fund (budgeted at $9 billion for fiscal 2011) which subsidizes phone services in rural areas. The FCC is likely to recommend a shift of funding from traditional phone services to broadband in high-cost areas.
 
President Obama has submitted a budget to the Congress that proposes an FCC funding of $352.5 million in fiscal 2011, representing a 5% year-over-year increase. A portion of the fund will be allocated to implement the National Broadband Plan and manage national spectrum use.
 
One of the major challenges that FCC seeks to address through the National Broadband Plan is the more effective use of the nation’s existing telecom assets, especially the available spectrum, which is facing impending shortages. The growing popularity of next-generation wireless devices such as smartphones and associated bandwidth-hungry data applications has catapulted demand for spectrum among carriers. The FCC foresees that demand for wireless broadband services will soon exceed the supply of spectrum.
 
To address this need, the FCC is exploring all options to free up airwaves that could be auctioned to top-tier carriers such as AT&T (T), Verizon (VZ), Sprint Nextel (S) and Deutsche Telekom’s (DT) US unit T-mobile USA. However, the process of locating the available spectrum for auction could take several years.
Read the full analyst report on “T”
Read the full analyst report on “VZ”
Read the full analyst report on “S”
Read the full analyst report on “DT”
Zacks Investment Research