U.S. broadband wireless policy ranks among the world’s most flexi...

and former FCC chief of policy development, said “There are a couple of auction designs and spectrum policies [in the U.S.] promoting spectrum flexibility and allowing the markets to make adjustments that worked very well.” Pepper said he thinks of flexibility “in 3 dimensions: technology, service and build out.” The FCC was right not to set technology standards for analog-to-digital transition for cellular service and later when it allowed technology choice in the PCS band, he said. “People who were arguing in favor of a [mandatory] standard for digital cellular service were arguing for the standard that nobody in the world adopted and we'd have picked the wrong one if the government had actually picked,” he said. The U.S. is also ahead of Europe in terms of service flexibility, Pepper said: “The fact that the U.S. policy has allowed networks to work using existing spectrum has been enormously powerful and advantageous for the U.S. consumers.” In Europe, especially in the U.K. and Germany, wireless providers lack that flexibility, boosting spectrum prices, he said. “If you can’t use 2G spectrum you have today to provide 3G service tomorrow, you will pay anything [for 3G spectrum] because you have to have that license, you don’t have that flexibility to migrate technology [using the same spectrum],” Pepper said. Another advantage of U.S. public policy is “allowing transferability of licenses,” he said: “There is a big debate in a lot of countries today on whether or not licensees should be permitted to sell the license. We've allowed that since at least the 1940s. Secondary markets make very important adjustments in the market, let the market work.” Europe doesn’t allow use of secondary markets, he said: “If you want to shift a strategy or focus on another country in Europe, you can’t buy and sell licenses, you have to sell the whole company.” Pepper criticized “false choices in the debates in the U.S. and around the world: it has to be licensed or unlicensed, public safety or commercial, voice or data. These are all false choices. There is a place for both licensed and unlicensed.” Manhattan Institute Senior Fellow Thomas Hazlett again pushed for the govt. to allocate more spectrum for wireless services. “For public policy, more spectrum is a nice idea,” Hazlett said: “It improves competitiveness, lowers retail prices, increases efficiency and stimulates economic growth.” Hazlett said the recent wave of wireless consolidation was driven by demand for radio spectrum. For example, he said, after its merger with AT&T Wireless Cingular immediately floated plans for 3G deployment, while T-Mobile, which didn’t get a partner, “continues to lag behind its competitors in offering wide-area next generation services.” Hazlett said “greater flexibility for operators allows standards competition that has been successful” in the U.S. “These reforms can be pursued either through [regulatory] regime switches” or through “liberalizing the rules,” which is “something less onerous politically and more within reach for people who are serious short term and medium term reforms,” he said.