In today’s digital landscape, the transformation to a world of wireless Internet access has shifted our mobile phones into virtual pocket computers. The Wireless Communications Association International (WCAI) has stated that smartphone users consume 30 times the data of a “traditional” handheld device, and AT&T alone reports that it is rolling out 2,000 additional cell towers in 2009 in response to a 5,000 percent growth in data usage over the last three years, largely due to the considerable popularity of Apple’s iPhone (Newman). As technological improvement has made these smartphones progressively more affordable, the explosive demand for wireless innovation is testing the limits of a fundamental resource: the telecommunications spectrum. The spectrum is regarded as the “oxygen of the wireless world,” fueling every aspect of our mobile broadband ecosystem. And as more and more consumers use their wireless devices to watch videos, exchange pictures, listen to songs, and download the latest applications, the airwaves are growing increasingly choked and over-crowded. As data use continues to skyrocket with the adoption of mobile smartphones, the question becomes: how will the federal government, in cooperation with the FCC, strategically mediate spectrum space in the face of data influx among competing mobile carriers? Extending the reach and performance of broadband will prove to a very delicate issue as the Commission works feverishly to keep up with the higher speeds that these mobile applications will continue to require in the near future.
This urgency stems from a logistical constraint. While the electromagnetic spectrum encompasses everything from microwaves to visible light to cosmic rays, only a fraction of it is suitable for telecommunications usage. This slim percentage is then split up further, with portions of the resource dedicated to activities ranging from government and military functions, to television broadcasts and consumer mobile phone services, to public medical and fire safety. Most of these entities, including mobile phone service providers, must obtain licensure to grant them exclusive usage of a given frequency. Others, such as WiFi, are open to everyone, with no license needed, allowing them to serve as an fully accessible, inexpensive resource to rural communities, for instance. Given the natural parameters of how much information can be fed through a certain slot of bandwidth, spectrum must be allocated carefully and appropriately – to not only to make the best use of it for present services, but to anticipate the new technologies and platforms of coming generation. And, predictably, as each community demands a larger piece of the bandwidth pie, identifying the most efficient way to divide up the spectrum is becoming increasingly contentious. In particular, for the manufacturers of the wireless equipment, ample spectrum is crucial to the expansion of business, to give them room to sell more of their products, applications and services. We might then ask: in the interest of business, consumer needs and innovation, how are the many conflicting demands on this important territory to be negotiated in policy and practice? How will all the slices of the spectrum be managed effectively? Historically, the FCC has made spectrum allocation decisions based on comparative hearings. Theoretically, these hearings were to allow regulators to decide which applicant would put the spectrum “to its best use.” However, over time, the process proved to be quite subjective and difficult to standardize. In his authoritative book, Putting Auction Theory to Work, Milgrom explains how comparative hearings often broke down into “lawyers and lobbyists arguing that their plans and clients were most deserving of a valuable but free government license" (Milgrom ). Because of the questionable fairness of the comparative hearings, the FCC shifted its strategy in 1982 and began to use a lottery...
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