Thursday, February 6, 2014

Where to Share Spectrum Might be the Issue, Not Sharing as Such

To say communications spectrum policy is contentious is an understatement, and contention exists over the concept of “shared spectrum” as well.

The notion is that instead of the traditional method of reallocating spectrum, namely compensating licensed users to clear blocks of spectrum for supplemental auction, it might be less costly and get new communications spectrum to market faster if licensed users and commercial users share spectrum.

Put simply, incumbent mobile service providers probably have good reasons to oppose the concept, while challengers likely have good reasons to support the concept.

“The burden of proof should be on those who argue for spectrum exclusivity over sharing,” argues Kevin Werbach, Wharton School, University of Pennsylvania associate professor of Legal Studies and Business Ethics, and founder of the Supernova Group, a technology consulting firm.

“Both licensed and unlicensed spectrum provides significant value to consumers,” argues Dr. George Ford, Phoenix Center for Advanced Legal & Economic Public Policy Studies chief economist. That said, Ford is skeptical about the economics of shared spectrum, as an exclusive method of allocating a scarce resource.

“The allocation decision should be made based on which licensing approach is expected to generate the greatest value for the spectrum being allocated,” Ford argues.

One key contextual issue is where additional spectrum will be needed, what applications will need to be supported and whether spectrum sharing is suited to new uses and business models, compared to the traditional mobile business model.

“Shared spectrum is largely for low-power uses only,” Ford argues. “Sharing spectrum that covers greater distances per unit of power—like the TV broadcasting spectrum—is counterproductive and economically senseless.”

But some might also note the biggest potential use of new spectrum and networks is for high bandwidth but low power applications, precisely the places that a shared spectrum approach would make most sense.

The legacy use of Wi-Fi provides a useful model. Where traditional mobile networks logically have been optimized for mobility over wide areas, making low-power licensed spectrum a logical choice, tomorrow’s networks might well be built around low power, local access. And that is precisely the area where shared spectrum might make lots of sense.

There might be less disagreement than first appears.

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