[IP] more on Comment on "The End of Spectrum Scarcity"
Delivered-To: dfarber+@xxxxxxxxxxxxxxxxxx
Date: Mon, 01 Mar 2004 07:19:51 -0500
From: Kevin Werbach <Kevin@xxxxxxxxxxx>
Subject: Re: [IP] Comment on "The End of Spectrum Scarcity"
X-Sender: mail.werbach.com:kwerb@xxxxxxxxx
To: dave@xxxxxxxxxx, faulhabe@xxxxxxxxxxxxxxxxx
Cc: gstaple@xxxxxxxxx
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@xxxxxxxx>
>Subject: The End of Spectrum Scarcity
>X-Sender: steven@xxxxxxxxxxxxx
>To: "David J. Farber" <dave@xxxxxxxxxx>
>
>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@xxxxxxxxxxx
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