Senate panel debates radio spectrum policy reform

Witnesses at a U.S. Senate committee hearing agreed that changes are needed in the way radio spectrum is managed in the United States, but they clashed over whether wireless carriers and other companies should have exclusive and long-term access to chunks of the spectrum.

Senator John McCain, chairman of the Senate Commerce, Science and Transportation Committee, took issue with the current U.S. policy for commercial auctions of radio spectrum. Companies expect to retain control of the spectrum they win in auctions, and often do, the Arizona Republican said Thursday, even though the auctioned licenses have expiration dates.

Radio spectrum is the range of frequencies that transmitters can use to send audio, video or data, ranging from TV and radio broadcasts to cellular phone signals to short-range wireless connections such as Wi-Fi.

Witness Michael Calabrese, director of the Spectrum Policy Program at think tank New America Foundation, suggested a lease arrangement, where companies lease radio spectrum instead of buying it. He called on the committee to reject calls for frequency license-holders to get exclusive rights, calling that approach a "giveaway at taxpayer expense."

But Steven Berry, senior vice president of the Cellular Telecommunications and Internet Association, said companies would have little incentive to offer new wireless products without some assurance that their spectrum investments were safe.

"If the FCC (Federal Communications Commission) would have said at the end of 10 years ... there would be no guarantee they'd be renewing that license, I contend that there would be no one wanting to invest the billions of dollars required for that license in the first place," Berry said.

Thursday's Commerce Committee hearing examined the FCC's Spectrum Policy Task Force report, released in November, which recommends a variety of changes to the way the FCC controls the radio spectrum. The report is available at http://www.fcc.gov/sptf/. The 73-page report suggests the old "command-and-control" model of the FCC approving all spectrum uses moves too slowly to keep up with the demand for wireless services.

The report recommends the FCC move primarily to a combination of an "exclusive-use" model, in which spectrum licensees have exclusive and transferable use rights for some parts of the radio spectrum, and a "commons" model, where unlimited numbers of unlicensed users share frequencies.

Think of the commons model as much like the Internet, where all users can dial in and use bandwidth, and the "exclusive-use" model much like broadcast television, where a limited number of companies control the airwaves.

Much of Thursday's debate focused on how much of the spectrum should be part of a commons and how much should be sold off to companies. Berry advocated a policy that would provide "certainty, predictability and flexibility" to wireless companies. "I don't think you want to change the rules after billions of dollars have been invested," he said.

But Calabrese suggested that the task force report's exclusive-use recommendations are at odds with the U.S. Constitution's First Amendment, guaranteeing all U.S. residents, not just a few companies, freedom of speech.

"The task force's report ... embraces a blueprint for the biggest special-interest windfall in American history," Calabrese added. "The task force essentially recommends giving today's incumbent licensees permanent and exclusive property interests in their frequencies with no compensation at all to the public."

But Gregory Rosston, deputy director of the Stanford Institute for Economic Policy Research, called for a "market-driven" approach, where the demand for wireless frequencies, not regulation, would determine the cost of licenses. He called on the Senate to move faster than the task force report's recommendation of identifying 100MHz of spectrum in which to allow greater flexibility within five years, and to keep the FCC from piecemealing spectrum policy on a case-by-case basis.

"Some degree of private ownership would reduce substantially some of the problems that have plagued some of the open-ended commons systems: overcrowding and the inability to facilitate a rapid change to new technology," Rosston said.

Kevin Kahn, director of Intel Corp.'s Communications and Interconnect Technology Laboratory, said there's room for both the commons and exclusive-use models in the radio spectrum. Only about 5 percent of the spectrum is licensed, he noted, and new wireless devices coming out in the next few years will be able to dynamically adjust the spectrum they use, to take advantage of unused "white spaces" in the spectrum.

"Our main conclusion is there's a lot of room for experimentation here," Kahn said. "I don't know that any of us have all the answers. It's important for us to set up a regime where that experimentation can take place."

Senator Frank Lautenberg, a Democrat from New Jersey, also urged the committee to reject a "one-size-fits-all" policy. "I think throughout this hearing we should remember that spectrum with all of its electromagnetic waves is a public resource, a public good, and a public asset," Lautenberg said. "With that in mind, spectrum should be treated the same way we treat the nation's other natural, but limited, resources. We manage them through joint public/private partnerships."

The demand for spectrum is nearly limitless, added Senator Conrad Burns, a Montana Republican, and reforms in spectrum policy should be able to keep up with that demand. "If done correctly, spectrum reform has the potential to create numerous high-tech jobs and jump start a currently ailing technology sector in the United States," Burns said.

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