WASHINGTON – (January 12, 2015) Spectrum management refers to the regulation, licensing and allocation of the use of bands of the electromagnetic spectrum and is the central component of modern wireless policy. Largely thanks to the work of Ronald Coase, spectrum management has moved beyond the simple “command and control” model of earlier times. However, some still favor doctrine over pragmatism, wanting a regime functioning solely through property rights and auctions.
Coase and WiFi: The Law and Economics of Unlicensed Spectrum, a new report from the Information Technology and Innovation Foundation (ITIF), analyzes the theoretical frameworks that underpin modern spectrum management and argues for policies that embrace a combination of both licensed and unlicensed spectrum. A mixed management regime that recognizes that exclusive licensing is superior in many, but not all, circumstances is ideal for enhancing innovation and development of next generation technologies.
“Much of modern spectrum policy is derived from the writings of economist Ronald Coase,” notes Doug Brake, Telecom Policy Analyst with ITIF and author of the report. “Unfortunately, many now invoke Coase’s work as an almost sacred text opposing any use of spectrum for unlicensed purposes. This is an inappropriate reading of Coase as his reasoning supports a mixed regime of spectrum rights (some licensed and some unlicensed) to maximize productive output.”
The report further argues that policymakers should not focus solely on auctions as a means of allocating spectrum and should look to expand unlicensed use through simplified, uniform technical rules and further develop dedicated unlicensed bands where possible. Unlicensed rules should avoid specialized interference protection measures where possible, permitting maximum flexibility and keeping the cost of equipment down. Such rules offer the best potential to maximize spectrum use, which is what Coase was really advocating for.
“Services utilizing unlicensed spectrum will be a key component of 21st Century technological development and a valuable contributor to the economy,” Brake adds, “They should not get short shrift based on misunderstood doctrine. This would be bad for wireless innovation and ultimately society as a whole.”
Read the report.
The Information Technology and Innovation Foundation (ITIF) is a non-profit, non-partisan think tank whose mission is to formulate and promote public policies to advance technological innovation and productivity internationally, in Washington, and in the states. Recognizing the vital role of technology in ensuring prosperity, ITIF focuses on innovation, productivity, and digital economy issues. Learn more at www.itif.org.