Bandwidth Wars

BANDWIDTH WARS
[SOURCE: Financial Times, AUTHOR: Thomas Hazlett, George Mason University]
[Commentary] What's the real pay-off in the transition to digital television? Spectrum efficiency. What an analog television transmitter can do using a standard television channel (6-8 MHz, depending on country) a digital station can do four, five or six times. Viewer choice increases ­multi-fold by flipping a technology switch. Digital’s cleaner use of airwaves also accommodates new voice and data applications. Given that vast frequency space was long ago set aside for analog television, digitization frees up abundant bandwidth for pretty amazing new stuff. We have trekked to just the cusp of the Wireless Age. But that day is delayed by go-slow spectrum policies, accounted for by three factors. First, regulators enjoy, and profit from, control over valuable stuff. Given that no agency official stands to lose salary or share price by squandering socially valuable bandwidth, state “warehousing” of frequencies is endemic. Second, market players are generally comfortable with market stability. From the operators’ perspective, cellular licence auctions do three things ­ cost money, yield more spectrum for them to use, yield more spectrum for their rivals to use ­ and two of them are bad. Finally, there is a great temptation for other political interests, including those affiliated with tele­vision broadcasters, to keep the spectrum subject to political allocation. That yields power and opportunity. The US performance on television band reallocation is not visibly improved, but the plodding elsewhere appears as bad or worse. By making some progress to advance productive use of the digital dividend, the Americans may paradoxically stumble to a first-place finish in an international race being run in slow motion.
http://www.ft.com/cms/s/84e25588-3949-11dc-ab48-0000779fd2ac.html
(requires subscription)