[IP] On the same wavelength
Begin forwarded message:
From: Dewayne Hendricks <dewayne@xxxxxxxxxxxxx>
Date: August 13, 2004 2:46:24 PM EDT
To: Dewayne-Net Technology List <dewayne-net@xxxxxxxxxxxxx>
Subject: [Dewayne-Net] On the same wavelength
Reply-To: dewayne@xxxxxxxxxxxxx
On the same wavelength
Aug 12 th 2004 | SAN FRANCISCO
From The Economist print edition
<http://www.economist.com/science/displayStory.cfm?story_id=3084475>
Governments and industries are bracing themselves for the possibility
that radio interference will become a thing of the past
MOST people do not worry much about physics or politics when, for
example, they look at the colours of a rainbow. Nor do they pause much
when they use a remote control for their TV set, talk on a mobile
phone, listen to the radio, cook food in their microwave oven, open
their car door from a distance, or surf the internet without wires. Yet
these are all phenomena of electromagnetic radiation. How humans
harness electromagnetic waves—and specifically those in the
radio-frequency part of the spectrum—has become so important that old
and new ways of thinking are now lining up for a tense confrontation
that will affect numerous businesses and billions of consumers.
The old mindset, supported by over a century of technological
experience and 70 years of regulatory habit, views spectrum—the range
of frequencies, or wavelengths, at which electromagnetic waves
vibrate—as a scarce resource that must be allocated by governments or
bought and sold like property. The new school, pointing to cutting-edge
technologies, says that spectrum is by nature abundant and that
allocating, buying or selling parts of it will one day seem as
illogical as, say, apportioning or selling sound waves to people who
would like to have a conversation.
The traditional mindsets were colourfully on display this week when
full details were announced of a complicated spectrum swap arranged by
America's telecom and media regulator, the Federal Communications
Commission (FCC). First announced on July 8th, the swap gave Nextel,
America's sixth-largest mobile-phone carrier, new slices of spectrum in
return for vacating other bands where it was causing interference with
the radios of firemen, police and hospital workers. If it wins final
approval, the deal will cost Nextel $3.25 billion. It follows years of
what Michael Powell, the FCC's chairman, called “ruthless lobbying”.
Nextel's rivals threaten to contest the decision, screaming that Nextel
got a windfall of public property. Verizon Wireless, America's largest
carrier, recently bought another piece of spectrum, in New York, for
$930m.
A glimpse of the new mindsets, by contrast, can be had in any Starbucks
coffee-shop where patrons connect to the internet through Wi-Fi, a
technical standard (officially called 802.11) that does not have a
government licence but operates in “unlicensed” bands of spectrum in
the 2.4GHz or 5.8GHz range. These are bands which governments have
deliberately set aside as, in effect, an experiment for new
technologies such as Wi-Fi. Almost anything goes in these bands, and
any interference—between Wi-Fi base-stations and cordless phones,
say—is for vendors, not the government, to sort out.
On one side, therefore, are notions of radio frequencies as scarce
resources that can be used by only one transmitter at a time and are
worth lobbying and paying billions for; on the other side is the idea
that any number of transmitters and receivers can peacefully co-exist
on the airwaves and that spectrum should therefore be open to all—not
individual property, but rather a commons. To understand this debate,
one must look back at history; to understand its importance, at
economics.
Slicing up the airwaves
For decades after Guglielmo Marconi invented the radio in 1897, the
only way to send multiple radio signals at the same time was by
transmitting them at different wavelengths. Radio receivers were dumb
devices—copper coils, essentially—and if two signals came in on the
same wavelength, the result was noise. So when America passed the Radio
Act in 1927 and the Communications Act in 1934, and other countries
followed with similar legislation, the reigning wisdom was that
governments had to chop up the radio-frequency spectrum and give
exclusive privileges in each band to avoid chaos: radio required
central planning.
The next major change in this understanding came in 1959, when Ronald
Coase, later a Nobel laureate in economics, argued that the market was
far better than governments at allocating the scarce resource of
electromagnetic spectrum, and that auctioning spectrum to the highest
bidder was therefore superior to simply giving licences away. This
fitted well with the Zeitgeist of the following decades, when
economists such as Milton Friedman and Friedrich von Hayek won Nobel
prizes for similar arguments in other areas of life. Starting in 1995,
governments in America and Europe began selling spectrum by auction.
Telecoms companies were the biggest buyers, mortgaging their balance
sheets to get airwaves for a new generation of cellular services.
The underlying assumptions about the physics of electromagnetism had
not changed, however. Devices were still assumed to be dumb,
interference a fact of life and exclusive-usage rights a necessity. The
only change is that today most governments run mixed regimes, doling
out some licences for free and auctioning others. Not all that mixed,
however: auctions account for only 2% of the radio-frequency spectrum
(up to 300GHz or so) in America. Central planning, in other words,
still accounts for 98% of the usable airwaves. Most of the spectrum is
given to television broadcasting, military communications and other
forms of dedicated content.
This dispensation represents a huge loss to society. James Snider at
the New America Foundation, a think-tank in Washington, DC, estimates
that America's airwaves would have been worth $771 billion in 2001
(when he last did the sums) if every licensee were to use his bandwidth
for the service in most demand by the public. But licensees do not do
this, or cannot because of regulations. This means that about half of
the total value of the airwaves is wasted on uneconomic uses—on extra
broadcasting capacity, say, instead of more cellular communications.
It would be bad enough if most of the spectrum were being wasted on the
wrong uses; in fact, much of it is not being used at all. According to
one study, only four of 18 ultra-high frequency TV channels in urban
Washington, DC, were actually in use when the study was done. In rural
areas, the “white spaces” of fallow spectrum are even more vast. An
official at America's National Telecommunications and Information
Administration, which manages all the spectrum used by the federal
government (as opposed to the FCC, which regulates all other uses),
once estimated that 95% of the government's spectrum is not being used
at any given time.
<snip>
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