23 Pages Posted: 15 May 2012
Date Written: September 1, 2003
The Federal Communications Commission (FCC), and the Federal Radio Agency before it, has been determining who and how radio spectrum is used in the USA. There has been a strongly held view in regulation that the radio spectrum has been a scarce resource and hence must be subject to strict licensing for use.
In 1993, the FCC for the first time treated spectrum as a private good and auctioned it. All stakeholders currently admit that the current licensing regime is obsolete and needs to be redefined to enable a more efficient and useful allocation of spectrum. In the past few years, two diverging opinions have formed out of these discussions – one that supports the creation of property rights in spectrum, allowing it to be traded, aggregated and divided like any other property; and the other which would like to see spectrum being used as a commons – where anyone who follows basic rules of etiquette can use spectrum without a fee or license. The supporters of the commons regime argue that innovation and maximized allocation efficiency will come out of a less restrictive policy, while property rights supporters claim that since spectrum is a scarce resource, it should be handled by a market for optimal welfare and that treating it as a commons would only lead to tragedy. We believe that a commons regime would do much to benefit the current level of innovation and the establishment of new and interesting services and products in the user-space.
However, although we recognize that the commons can fail, we do not feel that it is necessary to discard the commons regime completely. Instead, we propose that the commons would be a better spectrum policy regime, and should be established for most of the spectrum. Only if and when the commons shows signs of failing or heading towards tragedy, should a more restrictive policy structure be implemented. In order to establish this argument, we begin by listing the relative benefits and limitations of the commons regime, and then move on to an analysis of the possible failure modes of the spectrum commons. Through this, we hope to isolate specific conditions where the commons might fail, and then to grade them according to extent of failure. For each of the failure modes that we find as relevant, we propose responses that could range from technical to policy. In this way, we specify exactly what the different responses should be in each case, and to propose or require transitions only when absolutely necessary. In this way, we hope to establish a stable and viable commons structure, which would work, and in the case of failure, provide the stakeholders with a pre-defined response in order to minimize disruptions and allow for smooth transitions to more restrictive regimes.
Suggested Citation: Suggested Citation
Bar, Francois, Transition Paths in a Spectrum Commons Regime (September 1, 2003). TPRC 2003. Available at SSRN: https://ssrn.com/abstract=2060607