New day dawning for spectral supply, demand?

For as long as I can remember, most references to the term “spectrum” in the U.S. almost always have been linked to the word “shortage.” With the possible exception of the military, everyone seemed to agree that there weren’t enough available frequencies to let all operators pursue their desired business plans.

But this longtime truism could change dramatically during the next few years. Technological advances constantly improve interference-mitigation techniques and spectrum efficiency, allowing operators to extract more from the airwaves they have or simply use fewer frequencies.

As a result, the federal government — most notably, the military — will clear the 1710-1755 MHz band for commercial uses. Those airwaves and another 45 MHz in the 2.1 GHz band could be auctioned as early as this summer in the FCC’s first major frequency distribution this century.

In addition to this 90 MHz of spectrum, the FCC is expected to auction as much as 60 MHz of spectrum in 700 MHz band in 2008 — about one year before television broadcasters likely will have to transmit only digital signals to clear the airwaves, at least 24 MHz of which will be allocated to public-safety uses.

Making these significant influxes of spectrum effectively more “plentiful” is the fact that each alphabet-soup step on the wireless-technology ladder yields increasingly greater efficiencies. And the reality that so many companies are establishing sustainable businesses from products delivered over free unlicensed bands speaks volumes about the ability of operators to co-exist in a given frequency band.

These factors alone should remove the auspices of a spectrum shortage in the U.S., unless a bunch of new players enter the wireless market as network operators instead of opting for an MVNO relationship with an existing carrier. If we also have a significant technological disruption — for example, a more efficient modulation scheme or a long-awaited market breakthrough for software-defined radio — develop during this period, it’s possible there finally could be enough available spectrum for everyone.

Even taking this scenario to its extreme, it is hard to imagine that U.S. spectrum would become a commodity in the next five years. However, the presence of these various factors means it’s possible that the spectrum availability will not be the significant barrier to entry in the future that it is today.

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