Wednesday, May 23, 2007

Using Auctions to Make Better Use of Spectrum



The U.S. government's current spectrum policies have an unfortunate tendency to block out new entrants and innovative new uses of spectrum, such as widely-available Internet access. As has been pointed out by various studies, the vast majority of viable spectrum in this country simply goes unused, or else is grossly underutilized. We typically use only about 5 percent of available spectrum, and even that minimal use is inefficient compared to what is technically possible today.

We believe there's a better way to put this spectrum to use to provide more broadband options for consumers. The FCC is about to auction off a large segment of spectrum in the 700 MHz band as part of the digital TV transition. As you may have read, we filed a letter with the FCC on Monday in which we suggested that whomever wins this spectrum at auction should be allowed to employ "dynamic spectrum management techniques" -- including an AdWords-like auction of spectrum -- which would allow more efficient usage of the spectrum, primarily for wireless broadband services.

What might these techniques look like? While dynamic auctions could take many possible forms, the central concept is to utilize intelligent communications devices to resolve spectrum access contention. One example is a real-time airwaves auction, in which a spectrum licensee could bestow the right to transmit an amount of power for a unit of time, with the total amount of power in any location being limited to a specified cap. The airwaves auction would be managed via the Internet by a central clearinghouse.

A second example is device-driven registration fees, under which a communications device itself could become key to the payment process. For example, the consumer's price to purchase a device could include an airwaves registration fee (say, $5.00- 10.00), which would grant the ability to gain unlimited use at a specified power level. The device could include collision-detection and back-off features (similar to Wi-Fi) to limit congestion.

Some people have asked whether Google plans to bid on spectrum ourselves. Our support for allocating spectrum more efficiently does not necessarily signal our intention to participate in the auction, although we haven't yet made any final decisions. Regardless of which entities ultimately bid at the auction, however, we believe that the FCC should be adopting service rules and band plans that encourage competitive entry by new and innovative broadband companies.

For us, the bottom line is that the longtime methods of allocating spectrum still have not made wireless broadband commonplace across America. We are proposing that the existing service rules should allow more flexible commercial arrangements such as dynamic auctions, which over the long term would help reduce prices for consumers, promote new service offerings, and make broadband more available.

1 comment:

scrawford said...

great post, Rick!