Communications Insights: Trends and Cool Stuff

I am very pleased to announce that the FCC has just published a suite of papers which I worked on while I was there. This work sought to tackle some of the intractable problems facing spectrum policy. For nearly a century, spectrum policy has focused on “scarcity” and resolving “harmful interference”. This was largely due to limits of the technology of the day. Now radios fueled by semi-conductor processing power, are enabling spectrum policy to evolve. We can now focus on a much more efficient principal of “use coordination”. The first paper in the series, OSP Working Paper #41, examines the Tragedy of the Commons and how economic protocols might be employed to alleviate this problem, while preserving the openness and innovation associated with unlicensed operation. It achieves this by coordinating competing demands on the spectrum. There are several different means for assigning priority to allocate use. However, allowing would-be users to express their willingness to pay seems to be the most economically efficient. Through an economic coordination protocol, usage at any given time is awarded to those with the highest value. OSP Working Paper #43, looks at how the set of rights which underlie this regime can be assigned through auctions.

Insight: Of all the work I have done in my professional career, this is the product of which I am most proud. The future of spectrum policy will be one of “use coordination”, where the “exclusiveness” of a license will be determined at an auction along with which entities are assigned the license. We are back to First Principles. This work holds the promise to wrestle the spectrum from the hands of a few powerful entities and put it back in our hands. In addition, it is likely to increase efficiency and hence the benefit we all receive from its use. The beauty of the system is that if the current spectrum arrangement is the most efficient, then it will emerge as such. At the very least, we will have exposed society to a huge upside with very little downside risk. It also would allow us to grant priorities to those whose ability to pay is diminished, such as public safety and financially disadvantaged users.

As a body of work, it has far reaching implications. At the recent FCC field hearing on network management (viz. Net Neutrality), there was much reasonable debate on what constitutes reasonable network management. There were many views as to how to handle competing demands on limited network resources. To my mind, the most efficient way will be some variation on willingness to pay, perhaps through an economic coordination protocol.