Recent PostsCTN Issue: December 2016 Thomas Hazlett & Michael Honig, The Price of Freedom: How to Charge for Spectrum as WiFi and Cellular Collide IEEE ComSoc Technology News (Dec. 2016) Al[...]Thomas Hazlett recently reviewed two new volumes on the Information Economy for the International Journal of Economics of Business. Both Martin Campbell-Kelly and Daniel D. Garcia-Swartz, [...]My new research shows that more Internet access funding doesn't help students. And almost all U.S. schools are already online. By Thomas Hazlett 08/23/16 09:27 AM EDT Even during[...]How an early telephone silencer took on AT&T. By Lauren Young via Atlas Obscura It's not unusual today to overhear strangers' intimate phone conversations while comm[...]
The Case for Liberal Spectrum Licenses: A Technical and Economic Perspective
26 Berkeley Tech. L.J. 1037 (2011). Thomas W. Hazlett, Professor of Law & Economics, George Mason University School of Law, Evan T. Leo, Partner, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C.
The traditional system of radio spectrum allocation has inefficiently restricted wireless services. Alternatively, liberal licenses ceding de facto spectrum ownership rights yield incentives for operators to maximize airwave value. These authorizations have been widely used for mobile services in the U.S. and internationally, leading to the development of highly productive services and waves of innovation in technology, applications and business models. Serious challenges to the efficacy of such a spectrum regime have arisen, however. Seeing the widespread adoption of such devices as cordless phones and wifi radios using bands set aside for unlicensed use, some scholars and policy makers posit that spectrum sharing technologies have become cheap and easy to deploy, mitigating airwave scarcity and, therefore, the utility of exclusive rights. This paper evaluates such claims technically and economically. We demonstrate that spectrum scarcity is alive and well. Costly conflicts over airwave use not only continue, but have intensified with scientific advances that dramatically improve the functionality of wireless devices and so increase demand for spectrum access. Exclusive ownership rights help direct spectrum inputs to where they deliver the highest social gains, making exclusive property rules relatively more socially valuable. Liberal licenses efficiently accommodate rival business models (including those commonly associated with unlicensed spectrum allocations) while mitigating the constraints levied on spectrum use by regulators imposing restrictions in traditional licenses or via use rules and technology standards in unlicensed spectrum allocations. Full text available on SSRN http://ssrn.com/abstract=1585469.
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