[cr-india]fwdd from india gii

[Vickram Crishna]

An interesting article from the Economist... of course while 
presenting *both* sides of the picture it has cleverly not mentioned 
the most obvious *other* side: frequency reuse and the widening of 
spectrum choices this presents.

While we have correctly been petitioning the government for opening 
up the spectrum to community radio let us not forget the most 
important part of this issue: the fact that* low power radio% only 
travels a short distance, and so the same frequency is available for 
reuse beyond that point.

I think this more than establishes the need for treating spectrum as 
a common resource. It is high time we (the people of India) looked to 
taking back control of the airwaves from an increasingly irrelevant 
command-and-control regime. We need to move beyond the stale and 
pointless demand for simple community radio.

The other day (well, night actually), when Tariq Ansari  (Radio 
Mid-day, Go 92.5) and I were invited on NDTV24x7 for a discussion on 
the closure of Win 94.6, he made the telling point that for 
commercial radio, business sense will only emerge when there is 
plenty of consumer choice in a big market, not now, when a few 
channels are fighting to buy some interest from LCD# consumers. I 
specially mention this because so many people seem to think that the 
fight for spectrum is an either/or battle between social and 
commercial interests.

* see my earlier argument on this list for hundreds of thousands of 
channels in India
% at any frequency, and this has a huge implication for data 
services, while the traditional public frequencies have an equally 
important implication for low cost services, since user devices are 
so ubiquitous
# Lowest common denominator

<snip>
A "both sides" article from the Economist on the spectrum debate [for IP].

Economics focus

Freeing the airwaves

May 29th 2003

/Should radio spectrum be treated as property, or as a common resource?
/

WHAT is the best analogy for radio spectrum? Is it, as most people
intuitively believe, a palpable resource like land, best allocated
through property rights that can be bought and sold? Or is it, thanks to
technological progress, more like the sea, so vast that it doesn't need
to be parcelled out (at least for shipping traffic), in which case
general rules on how boats should behave are enough to ensure that it is
used efficiently.

Wireless folk have been discussing these questions for some time. Now,
regulators are starting to take an interest, because increasing demands
for wireless services require more efficient use of the spectrum.
Earlier this month, America's Federal Communications Commission (FCC)
decided to allow leasing and trading of frequency licences-the property
model-as a first step towards establishing a market in radio spectrum.
However, when regulators meet for the World Radiocommunication
Conference in Geneva, starting on June 9th, they will try to harmonise
their plans to expand the part of the spectrum that can be used without
a licence, treating it as a common resource.

These two different regulatory models are already competing across the
airwaves. On the one hand, telecoms companies have spent vast sums on
licences for third-generation (3G) wireless services-but are facing
serious financial and technical obstacles to building networks. On the
other, there are already many wireless local access networks, called
WiFi, which operate in unlicensed spectrum-and are growing at a
phenomenal rate.

The question of how best to allocate spectrum is not new. Over 40 years
ago Ronald Coase, who won the Nobel prize for economics in 1991, argued
that there is no reason why spectrum should be treated differently from,
for example, land. Both are scarce-so a market is the best way to
allocate their use. Although this seems blindingly obvious today, it
took the FCC more than two decades to start auctioning radio frequencies.

The debate has since moved on. Auctions alone are now considered
unsatisfactory, because they do not change the traditional structure of
spectrum allocation. And even after last month's reforms allowing
leasing and trading, the FCC remains a /dirigiste/ bureaucracy which
decides, in most cases, how the spectrum is divvied up, who gets which
slice, and for what use.

So what is the best way to replace this command-and-control regime?
Proponents of the property approach want to create, as soon as possible,
a market in which rights to spectrum blocks can be freely traded-rather
in the way that pollution rights now are. Some have already drawn up
plans for a "big bang": a giant simultaneous auction of as much spectrum
as possible.

Hold hard, say the advocates of common access. If spectrum were scarce
by some law of nature, they argue, selling licences would certainly be
the best solution. But in fact it is scarce only in terms of old, clunky
technology. When radio equipment needed "channels", defined by frequency
and power, to allow communication without interference, airwaves were
indeed a scarce resource.

Now, however, thanks to the dramatic decline in the cost of computer
power, wireless devices are far cleverer, meaning that they can use
spectrum more efficiently and are more tolerant of interference. They
are able to communicate over a broad range of frequencies at once (this
is called "spread spectrum"), to help each other out ("mesh networks")
and to adapt to the local environment ("agile radio"). Instead of
creating a spectrum market, argues Yochai Benkler, a law professor at
New York University, it should now be possible to rely on the market in
smart radio equipment without anybody having to control the airwaves.

Technological progress is not the only reason why spectrum markets would
be a second-best solution, Mr Benkler argues. For one, they are likely
to come with high transaction costs. If spectrum is priced efficiently
in an increasingly dynamic wireless world, the necessary overhead in
network management and metering is likely to be quite costly. Innovation
could suffer as well: rights holders could ignore technological
improvement just because it does not fit their business model. With
spectrum as commons, anybody can innovate, as users do on the internet.

*Keeping the options open
*Despite their differences, the two camps agree that they do not have
enough hard data to bet everything on one regime: they must experiment
with both. David Farber and Gerald Fulhaber, telecoms professors at the
University of Pennsylvania, for instance, want a big-bang auction. But
they also want to let others use spectrum freely, as long as they do not
"meaningfully" interfere with the owner's right to a clear broadcast.

Despite its recent move toward a spectrum market, the FCC too prefers a
hybrid approach, saying in a recent report that "no single regulatory
model should be applied to all spectrum". Early last year, it authorised
systems using a technology called ultra-wideband to operate at very low
power to avoid interference. The agency is also looking into expanding
the part of the spectrum for which no licence is needed.

If experiences in other areas of technology are any guide, there is a
good chance that both approaches will be around for some time, although
the commons solution may eventually come to dominate. The internet, at
least from the perspective of the end-user, is a common resource, with
bandwidth allocated on a first-come-first-served basis. In software, the
commons is growing, in the form of free open-source programs developed
by volunteers.

Technology may thus help to create markets; but it also makes some of
them obsolete. In this case it has turned land into sea, metaphorically
speaking. To draw a historical parallel: the development of better ships
did not lead to parcelling up the world's oceans but to something called
free trade.
<unsnip>
-- 
Vickram