IIC Telecommunications and Media Forum: Spectrum Policy

One of the good things about going to the IIC forum (see next post for details) was the opportunity to hear the debate on the other, more ‘telcoish’ panels which were extremely interesting — especially those that dealt with spectrum (albeit because it’s an area I don’t know that much about).

Listening to the debate as it went on one overriding feeling was: ‘if only we had regulators like this for IP’ (see for example the quote on special interest lobbying from one of the regulators) — perhaps it’s time to have an OfIP with the same kind of mandate to protect and promote the interests of citizens at large in relation to IP as OfCom does in the relation to telecommunications.

Below are a set of incomplete and impressionistic notes taken from one of the spectrum sessions.

Intro

  • Liberalizing spectrum
  • Auctions
  • Digital dividend — i.e. spectrum we get back from analogue broadcasters once you move to digital

Problems under deregulation:
* hoarding of spectrum (competition)
* health and safety

Regulator

  • problems of Command and Control (C+C)
    • uncertainty
    • inefficient use (unpriced)
    • if only state owns it you don’t have any price so no guide for anything
  • 2001: reforms
    • transparency: vacant spectrum and assigned block licenses
    • licensing: triggered by application, max 8 months processing
    • licenses: quasi-property rights (restrictions necessary to seperate one right from another)
    • trading: leasing and full transfers allowed (highly valued but low liquidity)
    • flexibility: facilitates change of use with no bureaucracy (no experience with increased interference)
    • system has broad support among stakeholders
  • EU: binding spectrum harmonization
    • [Being a bit provocative] Just lift up traditional C+C to EU level
    • cannot calculate costs and benefits as there is no market out there
    • Benefits:
      • avoid fragmentation
      • enhance economies of scale
      • pan-eu services
    • Drawbacks:
      • coordination failures are difficult to repair (e.g. ERMES pager service — complete disaster)
      • fragmentation can be beneficial
      • enhance national spectrum reforms (Norway) (the benefits of diversity)
      • variations in local demand and topography/demography
      • transfer of economic power to EC (both from national states and from users of these services)
      • increased bureaucracy
    • Alternative strategy: restrict member states to exclude tech and services
  • Coordinated spectrum reforms
    • benefits
      • increased innovation and economic efficiency
      • avoid fragmentation
    • drawbacks
      • slowest ship sets speed of convoy
      • less ‘regulatory competition’
      • reduced trial/error feedback
      • inherenet risks of legislative process (could be hugely costly if you go wrong because of difficult to reverse)
    • what you could do instead (omitted)

Another Regulator

  • role of spectrum is to break down barriers existing in trad. fixed line market
  • we don’t know the best way to use spectrum (and esp. the digital dividend)
  • is this really a scarce resource (picture from OFCOM showing at least half, if not majority, of spectrum is unused)
  • WAPECS (wireless access policies for electronic communications) recent policy policy produced by a commission advisory group. Long term goals:
    • facilitate rapid access to spectrum for new technologies to promote competitiveness and innovation
    • ensure coherent authorisation scheme
    • technology neutrality within technical constraints
    • service neutrality
  • ‘big bang’: interesting but involves disruption/uncertainty for all players
  • natural attrition: change licences on expiry (slow, penalises new entrants and consumers)
  • phased approach: [that which was ultimately advocated]

Economist/consultant

  • Exclusive ownership model not a great idea
  • proposes 2 alternatives: open source and hybrid
  • spectrum massively underused
  • michael werback: supercommons (Texas Law Review)
  • state allocation world -> mixed world -> open world (unlicensed bands, collective shared usage, packet radio, broadband)

General Quotes

  • Lobbyist for a major hardware corporation when questioned about Deustche bank study commissioned by Siemens that went against the position he was advocating: “let’s be honest, i was a consultant ok, every consultant can produce what is wanted by their client”
  • National telco regulator: “with command and control you favour the big players, you favour those who can lobby the regulator every week, who can all over europe, etc. they win out. Whereas if you liberalize then a lot of that goes away (there is less artificial scarcity) and it is much easier for small players to get in.”
  • Economist/consultant: “… we already have a lot of the technology. we could be doing much more and actually what is holding us back is things like patents …”
  • National telco regulator: “every time i hear ‘level playing field’ i reach for my revolver as it usually indicates an attempt to protect an existing vested interest”