by J.H. Snider New America Foundation at ISART 2006 Boulder, CO, March 9, 2006

1. Reclaiming the Vast Wasteland: The Economic Case for Reallocating Unused Spectrum (White Space) Between Channels 2 and 51 to Unlicensed Service by J.H. Snider New America Foundation at ISART 2006 Boulder, CO, March 9, 2006

2. Spectrum Management Models The Conventional Framing Commons vs. Property Model  Unlicensed vs. Licensed My Framing Commons vs. Property Model ≠ Unlicensed vs. Licensed

3. Two Types of Unlicensed Models • Unlicensed Commons Model • Unlicensed Property Model • Residential Property • Business Property • Public Property (e.g., Municipal WiFi)

4. Two Types of Property Models • Unlicensed • Licensed

5. One Type of Commons Model • Unlicensed

6. My Question: Which is the more efficient property model? • Unlicensed Property Model • Licensed Property Model

7. Outline • The shift to low power devices • The economic advantages of unlicensed in a low power world • The economic argument for low frequency unlicensed • Policy Recommendations

8. Why Does The Future Belong To Low Power Devices? • Historical trend: an increasing percentage of devices are low power • Economic forces: low power has compelling economic advantages

9. Historical Trend: Declining Coverage Areas • Marconi Wireless • Broadcasting • Cellular Telephony • Municipal WiFi

10. Economic Forces are Driving the Shift to Low Power • Growth of the fiber backbone • Need for wireless bandwidth • Demand side • Supply side (Cooper’s Law, cell tower growth) • Better coverage • Better security • Declining equipment cost • Conservation of battery power

11. Growth in Cell Sites

12. The Low Power Myth Low Power = Small Geographic Area

13. The Low Power Reality Low Power = Small Geographic Area & Large Geographic Area

14. Sampling of Wide-Area Unlicensed Networks

15. Economics of Unlicensed vs. Licensed Property Model • Lower end user usage costs • Higher quality for end users (faster, more secure, better coverage, more control) • Lower end user equipment costs • Lower barriers to entry for manufacturers (lower royalty fees, lower transaction costs, more bargaining leverage)

16. FCC Device Authorizations for Licensed and Unlicensed Bands, 1993-2004

17. High vs. Low Frequency Unlicensed

18. FCC Task Force Report • Scarce (low frequency) spectrum should be allocated via property model • Rarely used (high frequency) spectrum could be allocated via commons model Hence • Low frequency spectrum should be licensed • High frequency spectrum could be unlicensed

19. But… This argument becomes irrelevant for the unlicensed property model

20. A Different Question Why should the federal government be able to take my beachfront property and license it to a third party such as GE or Disney?

21. Licensed vs. Unlicensed Spectrum Math

22. Licensed vs. Unlicensed Flexible Spectrum Under 3 GHz

23. Reallocations of Spectrum Below 3 GHz Since November 2002 FCC Spectrum Policy Task force Report

24. Policy Recommendations • More low frequency unlicensed spectrum • The best opportunity: the white spaces between TV channels 2 and 51

25. The Battle Over The White Spaces • The case for more broadcast service • The case for more broadband (unlicensed) service

26. The Decline of Over-the-Air Television

27. The Rise of Broadband and Decline of Over-the-Air Television

28. ‘White Space’ as a Share of TV Band in Sample of U.S. Media Markets

29. The End My Blog: jhsnider.net/telecompolicy New America Foundation: www.newamerica.net

30. WiFi Standards Innovation Note: The FCC authorized WiFi type spread spectrum unlicensed devices in 1985 in Docket 81-413.

31. Market Expenditures on Licensed vs. Unlicensed Equipment & Services