ITIF Disagrees with Broadband Direction Laid Out by President Obama

Coase and WiFi: The Law and Economics of Unlicensed Spectrum

January 12, 2015
| Reports

In 1959, economist Ronald Coase argued for innovative and needed change to the system of spectrum allocation, challenging the prevailing “command and control” model in favor of one based on property rights and auctions. Today, many continue to not only rely on Coase’s insights to support spectrum auctions over command and control, but also invoke Coase’s writings as almost sacred texts opposing any use of spectrum for unlicensed purposes. We believe that this is an inappropriate reading of Coase and that his economic insights provide strong support for unlicensed, as well as licensed, spectrum. Indeed, Coase was primarily attacking a model of governmental command and control that was in dire need of modernizing. But Coase surely never intended his work to be used to support rigid and doctrinaire thinking about spectrum.

This paper examines the support for a new interpretation of Coase, concluding that a mix of both unlicensed and licensed spectrum is well grounded in Coase’s economic pragmatism. There is a wide range of possible ways to define rights in spectrum use; we should craft those rights in such a way that minimizes the costs of arranging the most socially beneficial outcome. Given the tremendous benefits of both licensed and unlicensed applications, we need a spectrum policy grounded in Coasean pragmatism, not Coasean doctrine. 

Policy makers should not take an overly-narrow focus on one particular type of efficiency (allocative efficiency) of one particular input (radio spectrum).  Using this to focus only on auctions gives short shrift to the obvious and growing value of unlicensed services all around us. Services utilizing unlicensed spectrum are valuable contributors to the economy and should not get short shrift based on misunderstood doctrine.

It is common to think of unlicensed as a gap-filler, as an efficient way to fill guard bands with low-power devices that are unlikely to cause interference to licensed services. While this can be a great opportunity to maximize the use of spectrum, offering up only narrow slices of spectrum is not what unlicensed services deserve. Policy makers should consider new, dedicated unlicensed bands where possible. 

The potential for economic growth through new unlicensed platforms, services, and devices is greatest when large, contiguous blocks of harmonized spectrum with simple service rules are available. Wherever possible, we should avoid creating specialized rules to protect particular incumbents from interference, allowing for simpler, cheaper equipment. All and all, this offers the best potential to maximize spectrum use, which is what professor Coase was really after.

Unlicensed Spectrum Deserves Fair Shake

Net Neutrality Hostilities Resume

Tech News World
It's far from game over when it comes to net neutrality.

New York, D.C. and Title II

December 19, 2014
| Blogs & Op-eds

The Washington Post has been reporting a number of stories attempting to show that network operators are telling Wall Street and Washington two entirely different stories, but the statements made tell a different story.

Let's Get Real — We Aren't Talking About Net Neutrality

December 12, 2014
| Blogs & Op-eds

There are many problems with the public conversation surrounding the Federal Communications Commission's (FCC) net neutrality rule-making: The public discourse struggles to rise above simple catch-phrases, popular antipathy against broadband providers clouds good decision-making and the increasing politicization of tech issues drives policy-by-ideology over rigorous analysis of available trade-offs. But one problem stands out among the rest — we aren't actually arguing about net neutrality. Instead of fiddling with a variety of jurisdictional hooks, none of which are quite right for the job, the FCC should take a step back and allow this problem to be solved the right way — through legislation.

Half the Battle over Net Neutrality Is Defining What It Means

November 24, 2014
Robert Atkinson discussed the potential implications of new net neutrality rules on NPR’s All things Considered.

Robert Atkinson discussed the potential implications of new net neutrality rules on NPR’s All things Considered.

Broadband Industry Groups Warn Title II May be Unreasonable, Unfeasible

Title II represents a strong shift towards a European-style precautionary regulation without legitimate justification, says Doug Brake.
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