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Reclaiming the Vast Wasteland: The Economic Case for Reallocating Unused Spectrum (White Space) Between Channels 2 and 51 to Unlicensed Service . by J.H. Snider New America Foundation at ISART 2006 Boulder, CO, March 9, 2006. Spectrum Management Models. The Conventional Framing
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Reclaiming the Vast Wasteland: The Economic Case for Reallocating Unused Spectrum (White Space) Between Channels 2 and 51 to Unlicensed Service by J.H. Snider New America Foundation at ISART 2006 Boulder, CO, March 9, 2006
Spectrum Management Models The Conventional Framing Commons vs. Property Model Unlicensed vs. Licensed My Framing Commons vs. Property Model ≠ Unlicensed vs. Licensed
Two Types of Unlicensed Models • Unlicensed Commons Model • Unlicensed Property Model • Residential Property • Business Property • Public Property (e.g., Municipal WiFi)
Two Types of Property Models • Unlicensed • Licensed
One Type of Commons Model • Unlicensed
My Question: Which is the more efficient property model? • Unlicensed Property Model • Licensed Property Model
Outline • The shift to low power devices • The economic advantages of unlicensed in a low power world • The economic argument for low frequency unlicensed • Policy Recommendations
Why Does The Future Belong To Low Power Devices? • Historical trend: an increasing percentage of devices are low power • Economic forces: low power has compelling economic advantages
Historical Trend: Declining Coverage Areas • Marconi Wireless • Broadcasting • Cellular Telephony • Municipal WiFi
Economic Forces are Driving the Shift to Low Power • Growth of the fiber backbone • Need for wireless bandwidth • Demand side • Supply side (Cooper’s Law, cell tower growth) • Better coverage • Better security • Declining equipment cost • Conservation of battery power
The Low Power Myth Low Power = Small Geographic Area
The Low Power Reality Low Power = Small Geographic Area & Large Geographic Area
Economics of Unlicensed vs. Licensed Property Model • Lower end user usage costs • Higher quality for end users (faster, more secure, better coverage, more control) • Lower end user equipment costs • Lower barriers to entry for manufacturers (lower royalty fees, lower transaction costs, more bargaining leverage)
FCC Device Authorizations for Licensed and Unlicensed Bands, 1993-2004
FCC Task Force Report • Scarce (low frequency) spectrum should be allocated via property model • Rarely used (high frequency) spectrum could be allocated via commons model Hence • Low frequency spectrum should be licensed • High frequency spectrum could be unlicensed
But… This argument becomes irrelevant for the unlicensed property model
A Different Question Why should the federal government be able to take my beachfront property and license it to a third party such as GE or Disney?
Reallocations of Spectrum Below 3 GHz Since November 2002 FCC Spectrum Policy Task force Report
Policy Recommendations • More low frequency unlicensed spectrum • The best opportunity: the white spaces between TV channels 2 and 51
The Battle Over The White Spaces • The case for more broadcast service • The case for more broadband (unlicensed) service
The Rise of Broadband and Decline of Over-the-Air Television
‘White Space’ as a Share of TV Band in Sample of U.S. Media Markets
The End My Blog: jhsnider.net/telecompolicy New America Foundation: www.newamerica.net
WiFi Standards Innovation Note: The FCC authorized WiFi type spread spectrum unlicensed devices in 1985 in Docket 81-413.
Market Expenditures on Licensed vs. Unlicensed Equipment & Services