More unlicensed mobile spectrum needed, group says

The U.S. Congress and Federal Communications Commission shouldn't forget unlicensed uses of spectrum as policymakers debate ways to open up more mobile spectrum for broadband and voice services, a group of wireless advocates said Thursday.

Unlicensed uses of mobile spectrum, such as Wi-Fi, can lead to new innovations and can take some pressure off overcrowded mobile phone networks, said representatives of the Wireless Innovation Alliance, an advocacy group focused on efficient uses of spectrum.

The value of Wi-Fi to the U.S. is in the "tens of billions of dollars," said Assaf Eilat, a senior economist at economic consulting firm Compass Lexecon.

Many rural areas depend on unlicensed spectrum for broadband, said Stephen Coran, counsel to the Wireless Internet Service Providers Association (WISPA). Three-quarters of the landmass in Texas and 38 percent of Illinois are served exclusively by WISPs using unlicensed spectrum, he said. Most WISPs do not take federal payments to deliver broadband, he said.

In those areas, "you cannot get broadband by any other source," Coran added. "Spectrum is the subsidy that is the lifeblood of WISPs across the country."

FCC Chairman Julius Genachowski and some members of Congress have called for so-called incentive auctions, in which television stations that give up unneeded spectrum could share in the proceedings from spectrum auctions. But even as many lawmakers have called on the FCC to maximize revenue in spectrum auctions, setting aside some spectrum for unlicensed uses can actually increase the returns in auctions, said Eilat, co-author of an October paper focused on unlicensed spectrum.

When new spectrum is "scarce," demand will increase, Eilat added. "In this case, if unlicensed spectrum is made available, there's going to be competition between bidders for the ... available licensed spectrum, and that's going to drive the prices up," he said.

Some congressional Republicans have balked at making spectrum available for free. In July, Republican members of the House Energy and Commerce Committee released a spectrum reform discussion draft bill that would have set up a process for auctioning unlicensed spectrum, but Wireless Innovation Alliance member Public Knowledge slammed that idea as unworkable

But other groups have questioned whether more unlicensed spectrum should be made available. Randolph May, president of free market think tank, the Free State Foundation, said he's wary of calls to set aside significant amounts of spectrum for unlicensed uses.

"Generally, licensees that buy spectrum at auctions have incentives to put the spectrum to the highest value use," May said. "Users of unlicensed spectrum generally don't have such incentives."

May questioned Eilat's assertion that setting aside unlicensed spectrum could lead to higher auction returns.

"While the amount of spectrum auctioned at any one time may affect the bid price, this does not mean it is sound policy to give away spectrum for unlicensed use in order to render more scarce the amount of spectrum available for auction," May said. "Ultimately, the government will receive more auction revenues if spectrum that otherwise might be allocated for unlicensed use is auctioned."

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.