August 20, 2003, 4:14 PM — To begin with a really bad analogy, suppose you bought a very popular (and thus rather expensive) toy, and had lots of children who wanted to play with it. The first thing you'd do is set up some rules. For example, Billy gets it from 10:00 to 11:00, and then Susie gets it from 11:00 to 12:00, and so on. And there would be rules about what each child could do with the toy, and what penalties there might be for abusing the rules or the toy itself.
The regulation of the radio spectrum is a lot like that, with, of course, lots of lawyers and politicians thrown into the mix. The airwaves are economically (and often financially) expensive, because there's limited capacity, and they're thus a finite resource. Access to the spectrum via a radio-based device can improve productivity and lead to profits, so there's likely to be excessive demand. Without regulation, it's a safe bet that nobody would get much done as radio transmitters quickly polluted the spectrum and would make it essentially impossible for anyone to get their information through all the noise.
So, governmental regulatory bodies step in to set rules as to who can do what, when, and how with certain portions of the radio spectrum, often called bands. There are many different bands, and within bands different classes of applications. Some activities (like broadcasting and cellular) get exclusive access to their bands, while others (such as those used for wireless LANs) are shared with other applications. The regulators set such items as transmit power levels, how much spectrum a band will occupy, and many technical and even political parameters. The general trend in recent years has been to use an auction process to make spectrum for new applications (such as new cellular services) available to the highest bidder, with less regulation of specific technologies and other detail. However, large amounts of spectrum have been made available at no charge for limited-range applications, like cordless phones and wireless LANs. For data applications, more bandwidth means improved reliability and, of course, higher throughput. But, again, since everyone can always use more spectrum, the regulation process is often lengthy, political, and expensive.