Sharing spectrum to fuel growth and opportunity

It’s hard to imagine that something bureaucratically labeled the “Broadcast Television Incentive Auction” could have huge importance for America’s cities, entrepreneurs, rural areas, and low-income communities. Yet the process being administered by the Federal Communications Commission (FCC) – and up for discussion at its Open Commission meeting today – will dramatically shape the information and communications environment for decades to come.

At issue is the proper allocation of wireless spectrum. Smartphones, tablets, and other devices that drive innovation and connect us depend on access to the people’s airwaves.  To meet growing demand, a massive expansion of wireless data capacity will be critical. In other words, the next information superhighway will not have wires. And if we don’t build that highway to maximize capacity for all, too many innovators, small businesses, rural and low-income communities will be left behind.

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A debate is now raging over how to make more spectrum available. Some view spectrum solely as an asset, to be sold off to the highest bidder.  That approach, taken too far, will actually leave capacity underutilized.  Spectrum is a rare resource that can actually better encourage economic development if it’s shared.

Our policies should take advantage of the extraordinary new opportunities to maximize capacity and availability by sharing spectrum. That’s not happening nearly enough today.

For more than a century, spectrum has been overseen by the federal government. That oversight mostly involved giving away or selling spectrum to private broadcasters, mobile phone providers, and others. The FCC has made only limited swaths of relatively unattractive spectrum available on a shared “unlicensed” basis.

In recent years, however, there has been an explosion of technical innovation and investment in this space. Some 3.5 billion devices using Wi-Fi and Bluetooth – two technologies that depend on shared spectrum – were shipped worldwide in 2012.

Shared access is particularly important for the communities left behind by the major spectrum owners. New York City is building the nation’s largest free public wireless network spanning 95 blocks in Harlem. And in rural areas throughout America, entrepreneurial wireless service providers and towns are using established spectrum sharing techniques and experimenting with new “white spaces” devices that operate in the vacant areas between television channels to increase access.

As wireless data usage balloons with the adoption of smartphones, tablets, and the sensor-driven Internet of Things, the importance of sharing will increase. Even the mobile phone companies that spent billions to purchase exclusive spectrum licenses are offloading traffic to shared access systems as the only way to meet surging demand.

The reallocation of underutilized spectrum is happening on two main fronts. The first is the FCC’s incentive auction to pay TV broadcasters to give up their underutilized spectrum licenses, which will then be auctioned to wireless broadband providers.  The way the FCC structures the process will determine how much shared white space is left over at the end. Rules that are too restrictive will strangle nascent technologies that are particularly valuable in rural areas, where there are fewer competing television broadcasts and fewer broadband options.

The second effort involves reallocation of spectrum currently controlled by federal agencies, including the military, for commercial use. The standard approach of clearing out the existing systems, moving them somewhere else, and then restructuring and auctioning the spectrum is extremely contentious, costly, and slow. But as the President’s Council of Advisors on Science and Technology (PCAST) concluded last year, spectrum sharing regimes could give government agencies the protection they need to achieve their missions, simultaneously allow private operators to deliver valuable services, and still make residual capacity freely available to the public. 

The burden of proof should be on those who argue for spectrum exclusivity over sharing. The financial or technical benefits of exclusivity should be weighed against the opportunities for economic development, innovation, new businesses, free expression, and civic participation that are maximized when spectrum is shared.

The decisions the FCC and other agencies make on spectrum reallocation will determine whether the sharing approach that has been so successful for Wi-Fi can be expanded in new ways. And it will have implications for American competitiveness and economic development for decades to come.

On one essential point, experts agree: spectrum is a fuel that can power our economy, but only to the extent that we use it efficiently. An approach to spectrum that reflects values of openness, innovation, equity, and creativity will maximize that capacity.

Werbach is an associate professor of Legal Studies and Business Ethics at the Wharton School, University of Pennsylvania, and founder of the Supernova Group, a technology consulting firm. He served as Counsel for New Technology Policy at the FCC during the Clinton Administration, and co-led the FCC review for the Obama-Biden Transition Project.