Experts Clash on Split Between Licensed, Unlicensed Spectrum

Hazlett said he supports mixed spectrum use and doesn’t want to do away with Wi-Fi, but licensed operators use spectrum much more efficiently. Hazlett offered as evidence of the need for more licensed spectrum T-Mobile’s recurring complaints that it doesn’t have enough spectrum to compete with its peers and Cingular’s decision to buy AT&T Wireless, which he said was mainly to gain the spectrum it needed to upgrade its network to UMTS/HSDPA.

Hazlett said a CDMA chip searches 800 times a second to find the lowest power level it needs to maintain a connection, so it can power down and allow maximum use of the airwaves. “What you want is you want a lot of exclusively assigned spaces out there. You want the rights to be very cheaply sold,” he said: “You never want to call it exclusive use. That’s a little dig at the FCC, which calls it exclusive use. It’s the most intensely shared spectrum on the face of the earth.”

Hazlett, known for warning about the “tragedy of the commons,” said licensed users make better use of spectrum than unlicensed users. “In general, much more sophisticated use is made of these technologies in the so-called exclusive rights assignment space for the obvious reason that the operators of networks have a lot more degrees of freedom,” he added: “Private competitors… figure out a way, with the use of intense investment in infrastructure, with exactly the sort of infrastructure investment you never see in the unlicensed space.”

But Calabrese said much of the spectrum is in the wrong bands with too little in low frequency ranges, despite claims that hundreds of MHz are already set aside for unlicensed use. The FCC has set aside only 26 MHz of unlicensed spectrum available below 1 GHz and only about 100 MHz below 3 GHz: “The mixed spectrum regime that I have in mind, that I believe would be superior, would require dedicated unlicensed in a range” of frequencies, he said. “There’s very little dedicated unlicensed at the lower frequencies you really need for broadband deployment, for example, below 1 GHz, where TV operates, where signals cut easily into buildings and trees in bad weather.”

Calabrese also argued that by allowing more unlicensed spectrum the FCC would reduce the cost of broadband service and increase competition and the quality of coverage. “It allows a better fit between supply and demand for wireless services, especially broadband,” he said. “The licensed model has been higher power, centralized infrastructure… which facilitates quality of service and it’s priced that way.” But unlicensed promotes smart devices and peer-to-peer connections, giving users an alternative to buying service from the major operators.

In a 2nd spectrum-related panel, Thomas Lenard of the Progress & Freedom Foundation said he’s heard few coherent arguments to justify municipalities like Philadelphia competing with industry to offer wireless or wireline broadband. Virtually every study performed so far cuts against municipal investment, he said: “If the govt. comes in and starts building supermarkets, is it more or less likely that Safeway is going to come in and open a supermarket? It’s got to be less likely. That’s kind of common sense.” A number of municipal buildouts have been studied in some depth, he said: “None of them was able to cover costs without being subsidized… The ventures that I studied looked like they'd be a definite drain on the taxpayer.”

Municipal broadband efforts often find themselves in direct competition with incumbents, Lenard said. “Those incumbents don’t go away,” he said: “Those incumbents compete very seriously and that’s a major reason why municipalities fair so poorly.”

But William Lehr of the Center for Technology, Policy & Industrial Development at the Mass. Institute of Technology, argued that in many cases the debate has been mischaracterized -- as whether municipal govts. should be allowed to compete with private industry. In reality, the choice is often between a muni system and no broadband, he said. “If I've got fiber on my street, that doesn’t mean you have fiber on your street,” Lehr said: “If I have fiber running down the highway that goes to my town, that surely doesn’t mean I have fiber in my town. If Verizon is rolling out FiOS in this community or this suburban it doesn’t mean that the community down the street is going to have fiber anytime soon.”

Municipal entry is occurring in part to “fill in the gaps” where a city’s residents aren’t satisfied with options available, Lehr said. In some cases cities are taking advantage of the relatively low cost of putting new technology on infrastructure they already own. In many towns the town is the largest consumer of broadband and has a natural interest in having a robust network, he said. “Local context matters,” Lehr said. “There are examples where municipal entry has helped and can help in the future.”

Pulver.com Gen. Counsel Jonathan Askin said when he worked for CLECs he used to argue that cities shouldn’t build networks: “Because of Moore’s Law, because of IP technology… that concept is very different than it was when I was representing CLECs and we were offering a managed telecom service… All we need at this point in the world is an open broadband pipe and the ability to run any application we want over that broadband pipe, be it voice, video or data. We no longer need the hand-holding of an intermediating service provider.”