Spectrum Policy Should Promote Competition

[Commentary] We all benefit when commercial companies compete for our business. Competing in the cellular market is unusual in that it depends on access to a limited resource: spectrum. No firm can enter the cellular market in Pittsburgh (except as a reseller) unless it can get Pittsburgh spectrum.

Carriers already offering service there also often want more spectrum when they expand capacity, as adding spectrum allows them to expand at a much lower cost. I hope that someday there will be a vibrant market for spectrum where firms can buy what they need when they need it, but at this point, spectrum suitable for cellular service can be hard to get. You can wait around for government to take spectrum that is currently used for something else, reallocate it for cellular use, and auction it, but those auctions are infrequent and unpredictable. You can try to get spectrum from a firm that already has some, but there are typically few holders of cellular spectrum in a given region, and they are all probably rival cellular carriers who would be happier if you just went away without offering a competing service.

There are solutions. To protect competition even as more diverse spectrum bands become available, we could adopt a screen that places different weights on each MHz of spectrum depending on the frequency. When it applies property taxes, government does not treat a square mile filled with Mississippi swampland the same as it treats a square mile filled with Manhattan skyscrapers. There is no reason it has to treat 10 MHz of spectrum at 900 MHz the same as 10 MHz of spectrum at 5 GHz in a spectrum cap or screen.

[Peha is a professor at Carnegie Mellon University]