FCC courts controversy with 'white space' sale

It seems like I can't go a month without some story breaking about some government or regulator coming up with some proposed regulation, treaty or law that gives legal protections to one industry at the expense of another.

This time, it's a new bill being proposed in the US Congress that could potentially transform swathes of unlicensed "white space" spectrum into paid-for, licensed spectrum.

The Public Safety Spectrum and Wireless Innovation Act, proposed by Republican Party lawmakers in July, ostensibly addresses the way in which the FCC handles reallocation of around 120 MHz of digital dividend spectrum currently owned by broadcasters.

Broadcasters support the bill because it gives them certain protections, such as the ability to move their facilities (with compensation) without losing coverage in the process, and stricter limitations on channel reassignments.

Auctioning everything

However, the bill also contains several controversial provisions, such as allowing broadcasters to waive certain FCC regulations as an incentive to sell, and allowing spectrum buyers to be exempt from net neutrality rules. One of the bigger controversies - and the one arguably the most relevant outside the US - is a section of the bill covering allocation of unlicensed spectrum.

Some background: in September last year, the FCC approved the use of "white spaces" (i.e. the spectrum left over from both digital TV signals and the "digital dividend" spectrum for wireless broadband services like LTE and Wimax) for unlicensed use. That means companies like Google, Microsoft and Yahoo can use them to offer so-called "Super Wi-Fi" service, which is similar to Wi-Fi, but with much wider coverage because of the lower radio frequency.

The controversy lies in Paragraph 17 of the bill, which requires the FCC to put unlicensed spectrum up for auction. The idea is essentially to pit companies that want it for exclusive, licensed use (such as AT&T or Verizon) against companies that want it to stay open and unlicensed. The latter group must pony up an aggregate bid that exceeds the highest licensed bid. In other words, if companies who want to keep white space spectrum open can outbid, say, Verizon (which paid $9.4 billion for 700-MHz spectrum in the FCC's 2008 auction, incidentally), the white-spaces spectrum gets to stay unlicensed.

Aside from the slim odds for unlicensed-spectrum proponents to outbid telcos with deep pockets - and the puzzling concept of paying the FCC to not sell spectrum to the highest bidder - critics argue that the real value of open unlicensed spectrum is the inherent innovation opportunities that we've already seen with open-spectrum technologies like Wi-Fi.

"The innovation and experimentation we have seen through the use of unlicensed spectrum would screech to a grinding halt," Harold Feld, legal director of Public Knowledge, said in a statement. "Given that unlicensed uses like Wi-Fi come from small and new companies, the future of new uses would be very bleak."

Obviously, it remains to be seen what final form the bill takes, and whether it gets passed. But it raises some interesting questions for markets in Asia and elsewhere that will also be going through their own digital-dividend transitions in the next few years. The ITU is already looking at the aspects of white-space spectrum as part of its overall work on the digital dividend.

Whether analog-to-digital TV shifts result in usable white-space spectrum in a given market depends on a lot of local factors. But where white-space spectrum is available, both industry players and regulators should take a close look at the question of unlicensed spectrum and the potential benefits of innovation and competition, rather than simply giving in to the traditional temptation of treating all spectrum as a cash cow waiting to be milked. The success of Wi-Fi alone should be a clue to the potential possibilities of preserving open spectrum.

More coverage of white space spectrum:
IEEE publishes white-space broadband standard
FCC gives green light to white space
 

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