more on Comment on "The End of Spectrum Scarcity"

[Dave Farber <dave () farber net>]

Delivered-To: dfarber+ () ux13 sp cs cmu edu
Date: Mon, 01 Mar 2004 07:19:51 -0500
From: Kevin Werbach <Kevin () werbach com>
Subject: Re: [IP] Comment on "The End of Spectrum Scarcity"
X-Sender: mail.werbach.com:kwerb@127.0.0.1
To: dave () farber net, faulhabe () wharton upenn edu
Cc: gstaple () velaw com

Gerry and Dave, thanks for the thoughtful reply to our IEEE Spectrum article.

Greg and I would agree that hard work lies ahead if truly disruptive legal 
frameworks for wireless communication are to be adopted.  The main point of 
our article is that we need to stop thinking in terms of a permanent 
"spectrum drought."  Just considering the baby steps the FCC has already 
committed to, and technology readily available today, we're looking at more 
spectrum becoming available in the next few years than over any comparable 
time period in memory.

With regard to the debate over property vs. commons models, my own paper is 
coming out later this month in the Texas Law Review; the draft is available 
at <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=456020>.  I argue in 
detail why a commons approach isn't necessarily more regulatory.  I propose 
a tort-like model for dispute resolution in the commons, which would have 
courts rather than the FCC enforcing boundaries among users.  Once we break 
out of the artificial framework of "spectrum" divided into frequencies, the 
property rights approach may actually require more regulatory intervention 
to design the initial market conditions and police boundaries.

At bottom, though, we agree on the major points.  Current spectrum scarcity 
is artificial.  Both property rights and unlicensed commons approaches 
should be tried.  Markets are generally better than regulators at 
allocating resources.  (The commons approach is based on a market too -- a 
market in equipment, rather than in exclusive spectrum licenses.)  If more 
of the industry and the government acknowledge those statements, we'll have 
come a long way on the road to spectrum abundance.

-k-


At 04:00 PM 2/29/2004, you wrote:
>From: Steven Cherry <s.cherry () ieee org>
>Subject: The End of Spectrum Scarcity
>X-Sender: steven () pop panix com
>To: "David J. Farber" <dave () farber net>
>
>Dave,
>
>I think IPers will be interested in an article in our March issue, "The 
End of Spectrum Scarcity," by Kevin Werbach and Greg Staple.
>
>http://www.spectrum.ieee.org/WEBONLY/publicfeature/mar04/0304scar.html
>
>The following is a comment on the article referenced above from Gerry 
Faulhaber and Dave Farber. ( I distributed to IP the paper we wrote last 
year on this subject but in case you forgot, it  is at:
>
>http://rider.wharton.upenn.edu/~faulhabe/SPECTRUM_MANAGEMENTv51.pdf )
>
>Comment:
>
>
>The Werbach-Staples article is a very nice intro to what we all hope
>will be an age of spectrum abundance, replacing the old regulatory order
>of spectrum scarcity.  The authors mention both new technology (mesh
>networks, agile radio, UWB) and loosening licensing restrictions
>(leasing,etc.) as means to achieve this abundance.  The old world of the
>FCC handing out restrictive licenses is about to go, the authors believe
>(perhaps hope).  In its place, the hardware will ensure that
>interference is a thing of the past.
>
>Well, I hope too.  But the hard work is ahead.  The problem has never
>been spectrum licenses (even though exclusive use); the problem has
>always been regulation and the huge inefficiencies it generates.
>Spectrum licenses can easily co-exist with the new technologies,
>including open-access-type use ("Part 15" in FCC-speak).  Licenses can
>easily co-exist within a market, in which licensees can not only lease
>but buy, sell and subdivide their spectrum licenses, subject only to
>frequency, power and other restrictions.  It is regulation, not
>licenses, that has led to a false spectrum shortage.
>
>It is not that regulators are venal or slow-witted.  The FCC has some of
>the brightest engineers and economists in this field.  It is the
>regulatory process itself, which leads to lobbying, rent-seeking,
>obfuscation, blocking rivals and legal manuevering to achieve
>competitive advantage within this regulatory/legal process.  Success
>comes from manipulating the regulatory/legal process, not building
>better equipment nor pleasing customers.
>
>As the authors point out, economists have argued for making spectrum
>licenses marketable; not because economists love exclusive-use licenses
>but because they believe, with overwhelming evidence, that markets are
>orders of magnitude more efficient that regulation.  Engineers would
>like to replace the arbitrariness of the assignment of licenses and use
>an open-access approach to spectrum (the "spectrum commons"), as we now
>do in Part 15 spectrum, claiming we can let the hardware take care of
>interference and allocate spectrum in real time.  Unfortunately, the
>history of Part 15 (and the UWB proceeding) demonstrates that we are not
>out of the regulatory woods -- not even close!  Tho users need have no
>license to broadcast, manufacturers and service providers still struggle
>mightily at the FCC, holding up innovation for years, to gain advantage
>for their favorite use.  "Open access" means everyone can use it; it
>doesn't mean there aren't rules.  And there must be rules which are
>enforced.  Who makes up the rules?  Who enforces them?  Well, it looks
>like it will end up being...the FCC, the regulator that brought us the
>present mess.
>
>We need both exclusive use licenses (FM radio, airport radars, etc.) and
>open access spectrum (Part 15, agile radio, etc.).  What we need to get
>rid of is regulation!  We need to undertake spectrum reform that takes
>the politics and bureaucrats out of the allocation and rulemaking
>process and let the private markets deal with it.
>
>Spectrum abundance?  Bring it on.  New advanced technologies?  Bring 'em
>on.  Regulation?  High time we lost it, and let's make sure we don't let
>regulators in the back door on our way to abundance, or it may never
>happen.
>
>Professor Gerald R. Faulhaber
>Business and Public Policy Department
>Wharton School, University of Pennsylvania
>Philadelphia, PA 19104
>
>David J. Farber
>Distinguished Career Professor of Computer Science and Public Policy
>Carnegie Mellon University
>School of Computer Science
>
>

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KEVIN WERBACH                                       kevin () werbach com
Supernova Group LLC                      1 (877) 803-7101 (voice/fax)
http://werbach.com                       Weblog -- http://werblog.com

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