Applying New Technologies to Old Spectrum Management Problems Presentation by Dale N. Hatfield Adjunct Professor, University of Colorado at Boulder at the CFP Bi-Annual Meeting San Jose, CA January 22-23, 2008

Introduction Purpose Outline –Quick Review of Spectrum Management Terms/Processes –Constraints and Criticisms of the Traditional Approach to Spectrum Management –Proposals for Reforming the Traditional Approach – Advances in Wireless Technology –Tracing One Thread of a Reform Initiative –Why So Little Market Progress on This Alternative? –Concluding Thoughts

Quick Review Major Steps in Spectrum Management –Allocation, Service Rules, Assignment and Enforcement; Primary and Secondary Status Agencies Responsible for Spectrum Management Traditional Centralized “Command and Control” Approach to Management

Quick Review Pressures on the Resource –More users, more uses, greater bandwidths –Traditional solutions to spectrum congestion Reallocation Move higher in frequency Increased sharing Improved technology –More spectrally efficient technologies (bits/second/Hertz) –More frequency reuse –Compression –Focus Here on Increased Sharing (Types)

Constraints and Criticisms of the Traditional Approach Criticisms of the Command And Control System of Spectrum Management –Excessive rigidity –Stifles technical and service innovation –Lacks incentives for efficient use of the resource –Creates barriers to sharing –Erects barriers to other beneficial agreements and transactions –Invites rent seeking behavior

Constraints and Criticisms of the Traditional Approach Rigidities in the Allocation, Allotment, and Assignment of Spectrum –“Static” spectrum management results in spectrum going unused in the frequency, time and/space dimensions – administrative scarcity –More dynamic/decentralized approaches to managing the resource were often hampered by equipment limitations –Under-utilization due to administrative scarcity and equipment constraints has been verified by recent spectrum occupancy measurements

Constraints and Criticisms of the Traditional Approach Rigidities in the Allocation, Allotment, and Assignment of Spectrum –As stated by SPTF: “In many bands, spectrum access is a more significant problem than physical scarcity of spectrum, in large part due to legacy command- and-control regulation that limits the ability of potential users to obtain such access.” –Above suggests that substantial amounts of spectrum capacity could be freed up by more dynamic and “opportunistic” approaches to the management of the resource

Proposals for Reforming the Traditional Approach Challenges –Reducing rigidities in current system –Taking advantages of advanced technologies –Vision of a more flexible future Competing Approaches/Models –Property rights/market incentive model –“Commons” or “unlicensed access” or “license exempt” model –Command and control/engineering model

Advances in Wireless Technology Technological Advances for Reducing Past Constraints –Software Defined Radios –Cognitive Radios –Policy Based Radios “Intelligence at the Edge” and Its Implications

Tracing One Thread of a Reform Initiative Two Inter-related Proposals Directed at Increased Sharing Thru Market Forces –Modifying/adopting rules to allow market transactions – a “Secondary Market” in spectrum – especially lease transactions –Modifying/adopting equipment authorization rules to facilitate the regulatory approval of SDRs/CRs/PBRs

Tracing One Thread of a Reform Initiative Allows Marketplace Forces to Reduce Scarcity Thru Increased Sharing –Licensed holder (lessor) of unused/lightly-used spectrum has legal ability and financial incentive to lease under-utilized spectrum –Entity seeking spectrum access (lessee) has ability to gain access to under-utilized spectrum by leasing needed spectrum –Sophisticated equipment (SDR/CR) supports such voluntary, market-based transactions by reducing/minimizing possibility of interference between the lessees’ and lessors’ systems

Tracing One Thread of a Reform Initiative Notes on This Thread or Alternative –Sharing is voluntary and potentially cooperative in response to marketplace forces –Three aspects of the alternative Legal ability (e.g. through the secondary market) to gain more dynamic/opportunistic access to under- utilized spectrum Availability of approved equipment to gain more dynamic/opportunistic access to such spectrum Actual ability to gain access to under-utilized spectrum using such equipment without causing “excessive” interference to existing licensee(s)

Tracing One Thread of a Reform Initiative Status of the Initiative –In a series of decisions the FCC has made the necessary changes to its rules to permit the creation of a secondary market It is now perfectly legal to lease under-utilized spectrum in many bands A limited market now exists (e.g., see –Likewise, the FCC has modified its rules and processes to allow the approval of equipment that has the characteristics of Software Defined Radios/Cognitive Radios/Policy Based Radios

Tracing One Thread of a Reform Initiative Status on the Initiative (Cont’d) –Understandably, there have been some challenging issues associated with involuntary or non-cooperative sharing (e.g., TV “White Space”) but those are largely different issues –For voluntary/cooperative sharing there are no longer regulatory barriers to such transactions but few secondary market lease transactions have actually occurred; Why is that the case?

Why So Little Progress? Possible Explanations: –Remaining Transaction Costs –Convergence – Fear of Creating New Competitor (Versus Traditional “Silos”) –Insufficient Number of Sellers/Lessors Exacerbated by incentives for hoarding and the elimination of the spectrum cap –Exclusion of Government Spectrum –Fear of Permanent Reallocation –Economies of Scale/Scope and First Mover Advantages Make It Difficult for Any New Entrant –Immature Technology

Final Thoughts Software Defined Radios/Cognitive Radios/Policy Based Radios have tremendous potential to solve the problems associated with the traditional command and control, centralized approach to spectrum management Despite the lack of legal/regulatory barriers to the creation of a vibrant secondary market in spectrum to facilitate the introduction of SDR/CR/PBR technology and reduce the amount of under-utilized spectrum, the current wireless industry structure does not appear to create strong enough economic incentives for the voluntary introduction of such advanced systems Given this lack of economic incentives, policy-makers may want to consider a “no harm, no foul” rule or perhaps a “compulsory license” policy to allow new entry in situations where the incumbents have failed to use their assigned spectrum efficiently

Contact Information Dale N. Hatfield Adjunct Professor Interdisciplinary Telecommunications Program University of Colorado at Boulder Engineering Center - ECOT-317 Campus Box 530 Boulder, CO Main Tel: Direct Dial: Fax: Cell Phone: or