The Case for Liberal Spectrum Licenses: A Technical and Economic Perspective

The traditional system of radio spectrum allocation has inefficiently restricted wireless services. Alternatively, liberal licenses ceding de facto spectrum ownership rights yield incentives for operators to maximize airwave value. These authorizations have been widely used for mobile services in the U.S. and internationally, leading to the development of highly productive services and waves of innovation in technology, applications and business models. Serious challenges to the efficacy of such a spectrum regime have arisen, however. Seeing the widespread adoption of such devices as cordless phones and wi-fi radios using bands set aside for unlicensed use, some scholars and policy makers posit that spectrum sharing technologies have become cheap and easy to deploy, mitigating airwave scarcity and, therefore, the utility of exclusive rights. This paper evaluates such claims technically and economically. We demonstrate that spectrum scarcity is alive and well. Costly conflicts over airwave use not only continue, but have intensified with scientific advances that dramatically improve the functionality of wireless devices and so increase demand for spectrum access. Exclusive ownership rights help direct spectrum inputs to where they deliver the highest social gains, making exclusive property rules relatively more socially valuable. Liberal licenses efficiently accommodate rival business models (including those commonly associated with unlicensed spectrum allocations) while mitigating the constraints levied on spectrum use by regulators imposing restrictions in traditional licenses or via use rules and technology standards in unlicensed spectrum allocations.

Enforcement in Dynamic Spectrum Access Systems

The spectrum access rights granted by the Federal government to spectrum users come with the expectation of protection from harmful interference. As a consequence of the growth of wireless demand and services of all types, technical progress enabling smart agile radio networks, and on-going spectrum management reform, there is both a need and opportunity to use and share spectrum more intensively and dynamically. A key element of any framework for managing harmful interference is the mechanism for enforcement of those rights. Since the rights to use spectrum and to protection from harmful interference vary by band (licensed/unlicensed, legacy/newly reformed) and type of use/users (primary/secondary, overlay/underlay), it is reasonable to expect that the enforcement mechanisms may need to vary as well.\ud \ud In this paper, we present a taxonomy for evaluating alternative mechanisms for enforcing interference protection for spectrum usage rights, with special attention to the potential changes that may be expected from wider deployment of Dynamic Spectrum Access (DSA) systems. Our exploration of how the design of the enforcement regime interacts with and influences the incentives of radio operators under different rights regimes and market scenarios is intended to assist in refining thinking about appropriate access rights regimes and how best to incentivize investment and growth in more efficient and valuable uses of the radio frequency spectrum

Allocation of Orbit and Spectrum Resources for Regional Communications: What's at Stake?

Contentious debate surrounds allocation of the geostationary orbit and electromagnetic spectrum, two resources used by communications satellites. An extensive economics literature alleges that the nonmarket administrative allocative procedures now in place are highly inefficient, but no research has empirically estimated the welfare loss. This paper develops a conceptual framework and a computerized model to estimate the economic value of the resources, the size and distribution of welfare costs associated with the present regulatory regime, and the potential gains from more market-like allocation.

Managing the radio spectrum : framework for reform in developing countries

Bringing management of the radio spectrum closer to markets is long overdue. The radio spectrum is a major component of the infrastructure that underpins the information society. Spectrum management, however, has not kept up with major changes in technology, business practice, and economic policy that have taken place worldwide during the last two decades. For many years traditional government administration of the spectrum worked reasonably well, but more recently it has led to growing technical and economic inefficiencies as well as obstacles to technological innovation. Two alternative approaches to spectrum management are being tried in several countries, one driven by the market (tradable spectrum rights) and another driven by technology innovation (spectrum commons). This paper discusses the basic features, advantages and limitations, scope of application, and requirements for implementation of these three approaches. The paper then discusses how these approaches can be made to work under conditions that typically prevail in developing countries, including weak rule of law, limited markets, and constrained fiscal space. Although spectrum reform strategies for individual countries must be developed case by case, several broadly applicable strategic options are outlined. The paper proposes a phased approach to addressing spectrum reform in a country. It ends by discussing aspects of institutional design, managing the transition, and addressing high-level changes such as the transition to digital television, the path to third-generation mobile services, launching of wireless fixed broadband services, and releasing military spectrum. The paper is extensively annotated and referenced.E-Business,Roads&Highways,Telecommunications Infrastructure,Climate Change,ICT Policy and Strategies

EVEREST IST - 2002 - 00185 : D23 : final report

Deliverable públic del projecte europeu EVERESTThis deliverable constitutes the final report of the project IST-2002-001858 EVEREST. After its successful completion, the project presents this document that firstly summarizes the context, goal and the approach objective of the project. Then it presents a concise summary of the major goals and results, as well as highlights the most valuable lessons derived form the project work. A list of deliverables and publications is included in the annex.Postprint (published version

Business models for deployment and operation of femtocell networks; - Are new cooperation strategies needed for mobile operators?

In this paper we discuss different business models for deployment and operation of femtocell networks intended for provisioning of public mobile broad band access services. In these types of business cases the operators use femtocells in order to reduce investments in "more costly" macro networks since the traffic can be "offloaded" to "less costly" femtocell networks. This is in contrast to the many business cases presented in Femtoforum where femtocells mainly are discussed as a solution to improve indoor coverage for voice services in homes and small offices, usually for closed user groups The main question discussed in this paper is if "operators need to consider new forms of cooperation strategies in order to enable large scale deployment of femtocells for public access?" By looking into existing solutions for indoor wireless access services we claim that the answer is both "Yes" and "No". No, since many types of cooperation are already in place for indoor deployment. Yes, because mobile operators need to re-think the femtocell specific business models, from approaches based on singe operator networks to different forms of cooperation involving multi-operator solutions, e.g. roaming and network sharing. --

Increasing Spectrum for Broadband: What Are The Options?

The growth of wireless broadband is a bright spot in the U.S. economy, but a shortage of flexibly licensed spectrum rights could put a crimp on this expansion. Freeing up spectrum from other uses would allow greater expansion of wireless broadband and would bring substantial gains—likely in the hundreds of billions of dollars—for U.S. consumers, businesses, and the federal treasury. ... U.S. experience suggests that it takes at least six years, and possibly over a decade, to complete any large-scale reallocation of spectrum. Thus, for policymakers, the ?projected? need is actually here today. This paper makes three proposals to increase spectrum available for wireless broadband under a flexibly licensed, market-based regime.

Valuing Spectrum Allocations

Observing trends in which Wi-Fi and Bluetooth have become widely popular, some argue that unlicensed allocations hosting such wireless technologies are increasingly valuable and that administrative spectrum allocations should shift accordingly. We challenge that policy conclusion. A core issue is that the social value of a given spectrum allocation is widely assumed to equal the gains of the applications it is likely to host. This thinking is faulty, as vividly seen in what we deem the Broadcast TV Spectrum Valuation Fallacy – the idea that because wireless video, or broadcast network programs are popular, TV channels are efficiently defined. This approach has been appropriately rejected, in key instances, by spectrum regulators, but is similarly applied in other instances regarding unlicensed allocations. While traditional allocations have garnered widespread criticism for imposing rigid barriers tending to block innovation, and flexible-use spectrum access rights have gained favor, the regulatory methods used to allocate (or reallocate) bandwidth remain embedded in a “command and control” process. Reconfiguring spectrum usage to enable emerging wireless markets often requires lengthy, costly rule makings. The expense of this administrative overhead is generally omitted from spectrum allocation policy analysis. Yet, it constitutes an essential component of the consumer welfare analysis. We propose a more fulsome policy approach, one that includes not only the appropriate measures of marginal value and opportunity cost for rival allocations, but incorporates transaction costs. Instead of regulators attempting to guess how much bandwidth should be allocated to various types of licensed and unlicensed services – and imposing different rules within and across these allocations – a more generic approach is called for. By better enabling spontaneous adjustments to changing consumer demands and technological innovation, spectrum allocations can be more efficiently brought into their most valuable employments