Friday, October 3, 2008

Unlicensed White Space Use as an Airwave “Freeze”

Professors Tom Hazlett and Vernon Smith have an op ed piece in the Oct. 3rd edition of the Wall Street Journal entitled “Don’t Let Google Freeze the Airwaves.” Apparently advocacy by Google, Microsoft, the New America Foundation and others in favor of unlicensed access to unused broadcast television channels freezes out even better reallocation of spectrum that could eventually be auctioned off for highly efficient private use.

Professors Hazlett and Smith appear to think private, unlicensed use could not possibly be as efficient as the command and control provided by a single owner keen on recouping its investments. Using the Professors’ rationale, would unlicensed Wi-Fi home network operators be better off if a single venture secured the 2.4 GHz band and packaged innovative home networking “solutions”? Not for me. I’m doing just fine managing spectrum quite efficiently using a device whose manufacturer bore no great burden proving to the FCC that the device would not cause harmful interference. Millions of Wi-Fi network operators do not have to pay a dime for the privilege of using spectrum and they surely do not need a spectrum owner to restrict their freedom and charge them for the privilege of using public spectrum.

The same principle applies to the millions of cordless telephone users. Should we have to pay a fee to the telephone company, or whoever acquired the cordless telephone frequencies for the privilege of using cordless handsets? Of course not. There are plenty of instances where spectrum use does not have to be coordinated, managed and priced by a single licensee.

Consider all the innovations and consumer friendly applications that entrepreneurs have developed for unlicensed spectrum. One upcoming application, using low powered “femtocells” makes it possible to extend licensed cellular telephone service and signal penetration into homes and offices. Some femtocells use the unlicensed Wi-Fi frequency band while others transmit on licensed cellular radio frequencies. In either case, consumers benefit equally. However, if the Wi-Fi spectrum became inventory held by a venture other than a cellular company, we could expect the Wi-Fi spectrum owner to demand gatekeeper or bottleneck compensation, or at least to delay and complicate the beneficial extension of cellular telephone service inside buildings.

I share with Professors Hazlett and Smith antipathy toward maintaining status quo spectrum allocations that favor incumbent users and ignore technological innovations. However I part company with them in their apparently absolute dismissal of the spectrum sharing between incumbents and new users. The Professors’ model replaces one incumbent with superior, but unjustified, access rights for another who paid for the right. In both instances incumbency works against free, shared use by unlicensed operators who surely can exploit technological innovations that provide innovative and entrepreneurial ways to satisfy telecommunications and information processing requirements.