Panel: Revamp spectrum-management system with more flexibility

LAS VEGAS–U.S. spectrum licensees need greater freedom to maximize the benefits of the nation’s airwaves, which traditionally have been tightly controlled by the Federal Communications Commission, according to five experts speaking during a “moot court” session last night at IWCE 2004. Under the current “command and control” approach, the FCC dictates the use and rules for spectrum, but this practice does not provide licensees with the flexibility necessary to react quickly to market opportunities in the ever-changing world of wireless communications, according to Dale Hatfield, adjunct professor in the interdisciplinary telecommunications program at the University of Colorado and the former chief of the FCC’s office of engineering and technology. This longstanding strategy has created an artificial scarcity of spectrum, with the most notable problem being policies that placed more than 400 MHz of valuable low-frequency spectrum in the hands of television broadcasters that use it less each day with the adoption of cable and satellite offerings. “I don’t think there’s any disagreement that the system today is basically broken,” Hatfield said. “The question now is how to fix it.” Most of the debate focused on two alternative concepts: A market-based, “property rights” approach that grants users exclusivity to spectrum without dictating use, or a “commons” approach that lets anyone use the airwaves, as long as they abide by interference rules. Both will be used in the future, but the focus of new rules should be to change “who’s running the show,” according to Gerald Faulhaber, professor of public policy and management at the University of Pennsylvania’s Wharton School. Regulatory oversight is the source of most U.S. spectrum problems, so it’s time to let the free market dictate spectrum use and ownership, while having the inevitable disputes settled in court rather than by the FCC or state commissions, he said. “Light regulation is like jumbo shrimp — there ain’t such a thing,” Faulhaber said. “If you like the FCC today, you’re going to love the commons approach.” But the commons approach lets more competitors enter the market while placing a premium on innovations and interference-avoidance techniques, with the recent success of Wi-Fi in the unlicensed 2.4 GHz band being a prime example, said Michael Calabrese, vice president of New America Foundation. At a time when most airwaves are unused, policymakers need only look at the transportation sector to realize that the commons approach would generate a higher rate of usage. “Public highways are more efficient than toll roads,” Calabrese said. But a commons approach runs the risk of undermining high-power users that generate the most revenue, such as commercial wireless applications, according to Thomas Hazlett, senior fellow with the Manhattan Institute for Policy Research. Providing low-frequency, unlicensed spectrum for unproven technologies should not take precedence over the need to ensure that the wireless industry — generating about $90 billion annually with 155 million customers — has the airwaves it needs to pursue 3G and 4G opportunities, he said. Peter Pitsch, director of communications policy for Intel, agreed that auctioning airwaves to high-power users is the best use of unfettered spectrum. However, he said continuing to identify and designate unlicensed spectrum for low-power uses that do not interfere with high-power incumbents is an opportunity that should not be missed. “The solution is to have more flexible licensed spectrum and more unlicensed spectrum,” Pitsch said. “These have been the two success stories of the last 20 years. … The choice is not ‘either-or;’ it’s ‘and-both.'”