When I wrote the post yesterday about Verizon Wireless potentially dropping their unlimited data plan, I touched on the need for a fresh look on how spectrum gets allocated in this country. I want to talk a little bit more about that in this post.
The airwaves have traditionally been a scarce resource, licensed in the public interest by the FCC to both commercial and non-commercial entities. Everyone from local radio and television stations, to public safety services like police and fire departments, to radio hobbyists, to cell phone carriers, to wireless remote manufacturers all need to “share” the spectrum that is available to them. The way this is done is by having certain ‘frequency bands’ allocated to specific uses, with further sub-bands allocated to direct individual uses – like specific TV or radio stations. To make sure their isn’t any interference, the edges of these frequency bands are typically left unused to act as ‘buffers’ between their adjacent bands. This entire approach reflects the analog roots of spectrum use, and is really a poor way to manage such a limited resource in a digital world.
So how do I see making something happen here?
As a first step, we should move away from ‘fixed use’ allocations of spectrum in favor flexible use allocations. This would allow existing license holders to maximize the use of the spectrum they have by deploying whatever services make the most sense for them to provide – not just a single licensed service. This would be a huge economic windfall for existing license holders, and they would likely be strongly in favor of it.
In exchange for that windfall, however, they would need to start returning spectrum to the FCC for reallocation. This would force them to continually invest in the more efficient use of the spectrum they have left, or find themselves economically disadvantaged at some point in the future. The rate of spectrum return could be based on the overall efficiency increase in the industry, but at a significant enough rate to force meaningful improvements to happen.
The spectrum that licensees return would become part of a flexible use pool that could be licensed to anyone on a transactional basis at current market rates, acting the same way that spot rates for power on the electrical grid do. (In fact, I could even see the emergence of financial futures markets and other free market exchanges growing up around wireless bandwidth.) Not only would this make spectrum available to a whole new class of service and content providers, it would also create even more pressure on everyone to use the spectrum available to them as efficiently as possible. Our long term goal should be to make the majority of our ‘wireless commons’ available to those who can put it to the most productive and efficient use – the biggest value for society overall.
I am far from an expert in this area, and am really suggesting this approach more as a starting point for discussion rather than a fully considered solution. The unfortunately reality is that the allocation of spectrum today (in large blocks via auctions) is really focused on getting more money into the hands of our elected representatives for them to fritter away, providing little long term value to society. We can’t forget that there is a real social impact from poorly allocated spectrum, especially around job creation in the private sector.
Whatever solution ends up replacing the current prodigality, it truly needs to be in the public interest.
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