The laws of physics cannot be persuaded by politics, pricing or PR. And some economic principles are equally unyielding.
Hence, economics and engineering considerations are both important to a sound U.S. spectrum policy.
The Federal Communications Commission last week voted to auction spectrum at 2.3 GHz for wireless communications services, steering licensees toward fixed applications. This was a victory for the wireless communications industry, which said the spectrum would be better suited for wireless Internet applications. Industry then was criticized for trying to avoid competition.
Ultimately, the debate came down to interference. Because the WCS frequencies are next to satellite-based digital audio radio service, the FCC noted “there is a substantial risk that these technical rules will make mobile operations on WCS spectrum technologically infeasible, at least for the foreseeable future.”
Another debate about future spectrum auctions this month had James Keelor of Cosmos Broadcasting complain the use of channels 60 to 69 for mobile and public safety services would interfere with television service. (God forbid I have to give up clear reception to watch E.R. so that spectrum can be used to get a real ambulance out to save someone’s life.)
Both debates showcase the importance engineering plays in determining spectrum policy. As such, engineering insights should receive top billing in determining spectrum policy. This is rocket science (or nearly as complex).
But the economics of spectrum auctions also need to be considered in spectrum decisions. And here, a little restraint to not use auctions as a short-term budget fix would go a long way.
The value of spectrum is variable. PCS licensees placed a high value-$20 billion-on the frequencies they received at auction. Loftier goals of a better-connected America aside, the U.S. government is one of the main beneficiaries from the sale of that spectrum.
But the government also could make that spectrum become worth a lot less if it releases too much spectrum to the marketplace too quickly. It is a simple supply-and-demand principle.
America has a vested interest in the success of PCS carriers; cash in its coffers. As such, America should keep the value of that spectrum high by limiting the amount of spectrum available and the potential uses for that spectrum for awhile.
