Subject: [NEXTEL-1] Spectrum reform an urgent U.S. priority

From: Marcelrf <[email-masked]>
Date: Sat, 28 Feb 2004 03:58:59 -0500

Spectrum reform an urgent U.S. priority

As the world goes wireless,
access problems arise

By Michael Calabrese
February 4, 2004

At the recent World Economic Forum in Davos, Switzerland,
one of the hottest topics was WiFi, the technology that uses
license-exempt (unlicensed) spectrum to share high-speed
wireless Internet connections. In the United States, wireless
networking is the fastest-growing segment in telecommunications,
while in less developed countries it is seen as the means to
leapfrog the lack of a wired infrastructure.

While the WiFi boom has been about short-range mobility,
roughly 1,500 wireless Internet service providers (WISPs)
already are using unlicensed spectrum to offer high-speed
broadband to homes and businesses up to 30 miles from the
Internet backbone. This is particularly important for rural areas,
where wired connections are unavailable or unaffordable.

As the world goes wireless, demand for access to the airwaves will
explode.
Big retailers and manufacturers are investing millions to replace
bar-coding
with wireless inventory controls. And Intel is planning for a future in
which unlicensed devices are cheap and ubiquitous, with dozens and
possibly
hundreds of them scattered around houses in beehive-like wireless
networks.

We can try to achieve this future goal of pervasive connectivity by
relying
on a pair of regulated monopolies - one cable, one copper - to trench
fiber
into every home and small business. We also could wait for national
wireless
carriers to blanket the nation with the thick quilt of cell towers.

Alternatively, we can spread our bets by promoting competition in the
last-mile by opening more spectrum to thousands of entrepreneurial WISPs
and
community-access networks that are already offering last-mile
connections on
unlicensed frequencies.

As usual, our political institutions lag far behind technological
change.
The conventional wisdom is that we suffer from a severe shortage of
spectrum. In reality, even the prime low frequencies that pass easily
through walls, trees and weather are barely used at all. Over downtown
D.C.,
near the White House, we found that 60 to 80 percent of the prime
frequencies are barely in use.

What's scarce is government permission to access the airwaves. The most
useful spectrum has all been allocated on an exclusive basis to
broadcasting, the military and other services that now need only a
fraction
of the frequencies they license thanks to digital technologies.

All sides of the spectrum debate agree that the FCC's outdated
command-and-control approach - based on rigid zoning by service and zero
cost licensing - has created artificial scarcity, stifling competition,
slowing innovation and restricting citizen access to the airwaves.

While delicensing frequencies and relying on markets for technologies
like
WiFi would represent true deregulation, the predominant view at the FCC
is
that the most practical solution is to simply grant spectrum incumbents
complete and permanent control over the frequencies they now borrow.
Today's
licenses would become de facto property.

The FCC is already moving in this direction. Last May, the commission
decided to facilitate secondary markets for spectrum that allow firms,
whether or not they paid for licenses, to more easily sell or sublease
underused spectrum.

The commission is also proposing a so-called "two-sided auction" that
would
allow incumbent licensees to pocket auction revenues when the FCC seeks
to
clear a band for new uses. According to senior FCC staff, the logic is
that
broadcasters and other licensees have so much political clout that the
only
practical way to reduce scarcity is to bribe them to bring their
spectrum to
market.

This approach to spectrum flexibility transfers a massive and
unnecessary
windfall to lucky incumbents that never paid a nickel for their
now-scarce
licenses. In addition to costing billions at a time of ballooning budget
deficits, it is being pursued despite the fact that Congress explicitly
rejected this sort of giveaway when it passed emergency legislation in
June,
2002 canceling auctions for TV Channels 60 to 69.

A longer-term problem is that freezing the old zoning system into
permanent
property rights will forestall emerging "smart" radio technologies that
could dynamically share today's underutilized spectrum space. Exclusive
ownership of frequencies turns sharing into "trespassing" and allows
licensees to demand payment for access to their airwaves.

Spectrum deregulation can be achieved without costly giveaways and
without
strangling unlicensed technologies that promise more affordable and
ubiquitous high-speed broadband.

Strange as it may sound, government should both lease spectrum and give
it
away.

By leasing, I mean that licensees should be given nearly complete
flexibility, but in exchange for paying a modest annual user fee, or
royalty, as we do with other public resources. While spectrum capacity
may
be plentiful, exclusive government licenses to operate profitable
services
like broadcasting remain scarce. Congress adopted this approach in 1996
when
it gave broadcasters the flexibility to use their new DTV channel to
sell
ancillary services, but only in exchange for a fee the FCC set at 5
percent
of gross revenue.

By giving away, I mean that we need a substantial reallocation of wasted
spectrum capacity to shared, unlicensed access. Rather than focus on
private
markets to sell spectrum access, expanding free and shared access to the
airwaves can encourage markets for new generations of WiFi equipment and
mitigate spectrum scarcity.

Some bands can be reallocated for unlicensed wireless broadband on a
primary
basis, while others can be opened for opportunistic sharing by "smart"
devices that hop frequencies and avoid harmful interference with
existing
services. This year the FCC will be considering to what degree analog TV
channels 52-69 can be opened for unlicensed sharing since they are due
to be
returned once the DTV transition is complete.

Just as public highways have proved far more efficient than relying
exclusively on toll roads or fixed-line railroads, meshed networks of
cognitive radios can share the airwaves based on basic "rules of the
road."
That is the "commons" model: spectrum as a common carrier that is,
thankfully, already owned by the public.

Calabrese is vice president and director of spectrum policy at the New
America Foundation.

http://www.hillnews.com/news/020404/ss_calabrese.aspx

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