Subject: [NEXTEL-1] Should the airwaves be deregulated?

From: [email-masked]
Date: Wed, 11 Feb 2004 23:51:58 -0500

Should the airwaves be deregulated?

      Contributed by derek

      February 11, 2004

      Many utopian idealists promote the complete deregulation
      of US airwaves, saying that modern software-defined,
      cognitive radios will be able to coexist without interfering
      with one another in airwaves that are a complete free-for-all
      with respect to frequency, and usage.

      But another, more moderate camp advocates less extreme
      deregulation, suggesting only that spectrum licensees should
      be permitted to use the spectrum for any purpose the free
      market demands of them.

      In a recent paper published by two highly credentialed economists,
Thomas Hazlett, a senior fellow at The Manhattan Institute, and Gregory
Rosston, deputy director of the Stanford Institute for Economic Policy
Research (SIEPR), the two gents argue that by regulating the use of specific
frequencies to specific functions, the FCC is stifling progress, business,
and tax revenues. This argument is not so far fetched: government
intervention has a long history of reducing the optimal outcome of free
markets. The two argue a scenario where an independent TV station operator
for a little-watched TV station would make more money and better serve the
public by killing their TV broadcasts and using their spectrum for providing
Broadband Wireless Services instead. The problem is that many people (the
FCC, some public, and especially existing wireless data carriers) think it
very unfair.

      The reason: TV broadcasters, for the most part, did not ever pay for
their spectrum licenses - some goofball administrations back in time gave
them free perpetual use of massive swaths of the usable radio spectrum for
$0. Allowing TV stations to use that huge spectrum to compete against
companies like Verizon Wireless, who had to pay vast sums for their tiny
spectrum, would be unfair. The FCC wants the TV guys to pay to do other
communications services, which is more fair, and generates revenue for the
FCC.

      So here's the bind: Without the approval to use their frequencies for
other profitable businesses, TV broadcasters have little incentive to change
from analog to digital, and are dragging their feet on the transition to
digital TV. Our two economists propose that we just get over it, and let
licensees use spectrum any way they see fit.

      I disagree. That would provide a shock to the system, and an unfair
windfall to the same companies that have been allowed a free ride on huge
swaths of spectrum for decades. Unfortunately, we've regulated ourselves
into this mess, so we're going to have to regulate ourselves out of it. The
FCC should FORCE the broadcasters to go digital, take back the excess
spectrum, auction some for licensed use, and release some for unlicensed use
to foster SDR, WiFi, etc.

      Bonus: Wanna know why TV broadcasters play such an important role in
spectrum reform? Have a look at the very interesting chart of US Frequency
Allocations at  http://www.ntia.doc.gov/osmhome/allochrt.pdf (slow-loading
PDF). See the HUGE sections in blue? Now do you understand why the
broadcasters would like to retain the rights to all that spectrum as they
upgrade to digital and only use 1/5 of it for TV? It would leave them 4/5 to
re-sell or use to compete with other companies with a huge cost advantage.

      Arguments like those by our two esteemed economists could certainly be
valid unbiased opinions, but they are suspiciously closely aligned with the
opinions of the TV broadcasters and their powerful lobby. I'm not accusing
them of being in the broadcaster's pocket, but they sure are singing from
the same sheet music

     http://www.techdirt.com/news/wireless/

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