Toward Property Rights in Spectrum: The Difficult Policy Choices Ahead

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Executive Summary

The vision laid out by economist RonaldCoase in his 1959 paper on spectrum remains theguiding light for spectrum policy reform.Property-like rights in electromagnetic spectrumand a secondary market for spectrum licenses arewell recognized as the best ways to allocate spectrumto its highest and best uses. When spectrumis better allocated, both telecommunications consumersand providers will be far better off.

Numerous commentators have built onCoase's wisdom and charted paths to facilitatemarkets in spectrum. However, defining rightsto use spectrum is far more difficult than ordinarilysuggested. Problems such as geographicspillover and adjacent channel spillover make itmuch more difficult to define rights to spectrumand to determine how to measure when thoserights have been transgressed. Unlike the case ofreal property, which is measured in two or threedimensions, there are as many as seven dimensionsby which electromagnetic frequency can bemeasured, and the best way to measure thesedimensions remains unsettled. Many decisionsremain, such as whether to use statistical modelsof radio wave propagation, actual measurementof interference, or some combination of the twoto determine the scope of rights in spectrum.

More careful analysis is needed to determinewhat type of property regime will operate effectivelyto govern rights in spectrum. A number ofquestions must be answered for a transition to aproperty rights regime to be successful.

Dale Hatfield and Phil Weiser

Dale Hatfield is professor of telecommunications at the University of Colorado. Phil Weiser is associate professor of law and telecommunications at the University of Colorado.