1JRN 930 Fall 2003Spectrum Policy PrimerPart ICurrent approach(c) 2003 J. M. Bauer 3Policy issues Overarching goals z Avoid interference (or reduce it to an acceptable level)z Maximize the value of spectrum to society Spectrum managementz Allocation, the dedication of frequencies (or bands) for specific services or usesz Allotment of spectrum to locationsz Assignment to specific users or classes of users Satellite orbit management2(c) 2003 J. M. Bauer 4Principal policy options Traditional approachz Spectrum is scarcez Interference is a transmission phenomenonz Requires exclusive assignment of channels  A radically different viewz Spectrum is abundantz Transmission is a receiver phenomenonz Sophisticated equipment (ultra-wideband, spread spectrum) allows open access(c) 2003 J. M. Bauer 5Legal foundations Spectrum considered public resource Public interest mandate of FCC in spectrum management Joint federal-state jurisdiction Constitutional framework:z Electronic speech principally protected by First Amendmentz FCC power to license upheld with scarcity rationale. When will it be challenged?(c) 2003 J. M. Bauer 6Local Local Cities, municipalitiesCities, municipalitiesJurisdictionLevelPowersPowersFederalInternational frequency allocation, satellite orbit allocation, standard-setting, emergency communicationsInternational frequency allocation, satellite orbit allocation, standard-setting, emergency communicationsStateAgencyInternational TelecommunicationUnion (ITU)State PUCsInter-nationalFrequency allocation and assignment (definition of services and geographic markets, limitedconduct regulation)Frequency allocation and assignment (definition of services and geographic markets, limitedconduct regulation)1993 legislation shifted power to FCC. States can petition to regulate(14 states do not regulate wireless, rest certain aspects) 1993 legislation shifted power to FCC. States can petition to regulate(14 states do not regulate wireless, rest certain aspects) Siting of wireless towers andantennas. Limited by Telecom Act 1996Siting of wireless towers andantennas. Limited by Telecom Act 1996FCC (WTB): private useNTIA: government use3(c) 2003 J. M. Bauer 7Frequency allocation Block allocation assigns certain blocks of spectrum to services Flexible allocation allows the licensee to use spectrum for an application of choice (voice, data, etc) Open allocations do not predetermine use Refarming is the reallo- cation of spectrumSelected band allocationsIVDS: 1 MHz in 218-219 MHz band.SMR: Total of 19MHz in 800+900 MHzbands.Broadband PCS: 140 MHz in 1850-1990MHz band.Narrowband PCS: 3 MHz in 901-902,930-931, and 940-941 MHz bands.WCS: 15 Mhz in 2305-2320 and 2345-2360 MHz bands.GWCS: 25 MHz in 4660-4685 MHzband.DBS: Several bands, uplinks 5.925-30GHz, downlinks 3.7-20.2 GHz.LMDS: 28 GHz band.Advanced fixed wireless: 38 GHz band.Selected band allocationsIVDS: 1 MHz in 218-219 MHz band.SMR: Total of 19MHz in 800+900 MHzbands.Broadband PCS: 140 MHz in 1850-1990MHz band.Narrowband PCS: 3 MHz in 901-902,930-931, and 940-941 MHz bands.WCS: 15 Mhz in 2305-2320 and 2345-2360 MHz bands.GWCS: 25 MHz in 4660-4685 MHzband.DBS: Several bands, uplinks 5.925-30GHz, downlinks 3.7-20.2 GHz.LMDS: 28 GHz band.Advanced fixed wireless: 38 GHz band.(c) 2003 J. M. Bauer 8Geographic licensing schemes Geographic market definition:z Nationwide and regional licensesz 493 Basic Trading Areas (BTAs), make up ...z 51 Major Trading Areas (MTAs)z 734 Cellular Market Areas (CMAs) akaMetropolitan Statistical Areas (MSAs) or Rural Service Areas (RSAs)z 175 Economic Areas (EAs) Use varies by service(c) 2003 J. M. Bauer 9Dynamic spectrum management Need to adjust spectrum use to economic and technical developmentz Incumbent users have limited incentive to release spectrum, except when compensatedz Spectrum markets would likely facilitate adjustment Limited flexibility. In certain bands (e.g., PCS), licensees can aggregate and dis-aggregate spectrum Private spectrum managers4(c) 2003 J. M. Bauer 10Universal Licensing System Adopted in R&O in November 1998 (WT Docket Nos. 98-20, 96-188) Dynamic, browser-based system to manage license applications and modificationsz Reduced number of application forms from >40 to 4z Consolidates service-specific rules into one set of rulesz Mandatory for auctioned services(c) 2003 J. M. Bauer 11Licensing methods Administration z License awarded to proposal that serves the public interest bestz Time-consuming and often contested Random assignment (e.g., lotteries)z License awarded in equal chance drawing among applicants w/ minimum qualifications Auctionsz Award license to highest bidder(c) 2003 J. M. Bauer 12Unlicensed spectrum 400 MHz of spectrum are unlicensedz Industrial, Scientific and Medical Band (ISM) in 2.4 GHzz Unlicensed National Information Infrastructure (U-NII) in 5 GHz band Etiquette rules (Part 15 CFR)z Maximum power levelsz “Listen first” principle Very innovative segment (e.g., WLANs)5Part IIAlternative approaches to spectrum managementElementary featuresEndogenousEndogenousEndogenous, governmentOpen accessNon-exclusiveQuasi-exclusiveExclusive rightsUsersMarket transactionsGovernment planning, licenseesGovernment planningDynamic adjustmentAuction of usage rights or usersAuction, market transactionsAuctionAdministra-tive processAssign-mentEndogenous (users),governmentEndogenous (owners),governmentGovernment planningGovernment planningAllocationCommonsOwnershipLicensing+LicensingProperty rights Spectrum regimes define sets of legal rightsXXXXXXXXXXXXXXXXXAccess/useManagementExclusionAlienationEnforcementOpen accessCommonsOwnershipLicensing+Licensing Legal rights entail different economic property rights and thus incentives6(c) 2003 J. M. Bauer 16Rights specification Influences efficiency of spectrum usez Given the state of technology, utilization of spectrum for most valuable use (static)z Incentives to improve technology Affects level of transaction costs Has consequences for non-market goals Effects the overall evolution of the wireless industries(c) 2003 J. M. Bauer 17Licensing+ Market based assignment and flexibility Spectrum auctionsz Shorten licensing process (US: 48Æ4 months)z Assign market value to spectrumz Depend critically on spectrum allocationz Have hitherto ignored costs (may