What the United States Can Learn From OFCOM’s Olympic Spectrum Plan…

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With the Olympic Games opening tonight, it doesn’t take a PhD in electrical engineering to recognize that the broadband infrastructure in the United Kingdom will be stretched to its limits.  According to a recent article, in order to accommodate the huge spike in expected traffic, the Olympics network will span 30,000 connections across 94 locations and will include:

  • 5,500 kilometres of new fiber optic cables;
  • 2,200 switches;
  • 1,800 wireless access points;
  • 7,000 cable TV sockets;
  • 16,500 telephones; and
  • 65,000 active network ports (active connections).

But with nearly a million people expected to attend the Games—nearly all of which will be calling, tweeting, photo sharing, updating their Facebook status, and streaming real-time video on their smartphones—spectrum capacity around London and other Olympic venues will be pushed to the limit.  For this reason, kudos must be given to Ofcom, the British telecoms regulator, for moving with deliberate speed and purpose to make additional commercial spectrum available for the Games.  Indeed, started in 2009, updated in 2010 and finalized in 2012, Ofcom developed a spectrum plan that focused on freeing up significant swaths of new commercial spectrum from public sector sources to accommodate the expected tsunami in commercial spectrum demand.  While no one expects Ofcom’s spectrum plan to solve the problem completely, it is an excellent example of how well the system can work when government and stakeholders work together for the common good.

So are there lessons for the United States to be learned here?  Absolutely.

As noted a moment ago, the Olympic experience demonstrates that a regulatory agency can move quickly and decisively to alleviate spectrum exhaust should it so choose.  Fortunately, the FCC does not appear to have a lack of will in this regard.  For example, newly-confirmed Commissioner Jessica Rosenworcel recently testified before Congress that:

The equation here is simple. The demand for airwaves is going up. The supply of unencumbered airwaves is going down. This is the time to innovate. We must put American know-how to work and create incentives to invest in technologies—geographic, temporal, and cognitive—that multiply the capacity of our airwaves.

And, at the same hearing, newly-confirmed Commissioner Ajit Pai noted simply that “[w]e must act with the same alacrity as the industry we regulate” and that we need “an ‘all-of-the-above’ approach to spectrum policy.”   Given such bi-partisan willingness to move forward, the difficult questions of what policies can actually help alleviate, rather than exacerbate, spectrum exhaust remains in the lap of Chairman Genachowski.  As noted in previous blogs, however, while Mr. Genachowski often likes “to talk the talk” about solving spectrum exhaust for commercial services, he has, more often than not, failed “to walk the walk.”

More importantly, the Olympic experience shows both that while government spectrum is perhaps one of the last and best areas to free up much needed prime spectrum for commercial use, getting the government to relinquish this crucial spectrum is not an easy political task.  Indeed, while the bulk of the new spectrum in Ofcom’s Olympic spectrum plan comes from government sources, Ofcom was also quick to point out that this new spectrum availability was unambiguously temporary in nature and would be returned promptly to government use at the conclusion of the Games.  So, what the government gives, it can also quickly take away.

Unfortunately, we have a similar problem right here in the United States.  To President Obama’s credit, he issued a Presidential Memorandum in 2010 entitled Unleashing the Wireless Broadband Revolution requiring that the Federal Government make available 500 MHz of Federal or non-federal spectrum for both mobile and fixed wireless broadband use by commercial users within 10 years.  However, just this week, the President’s Council of Advisors on Science & Technology (“PCAST”) issued a nearly 200 page report examining how to implement the President’s Order.  Rather than provide some good news, however, PCAST opted to drop several bombshells:

First, the PCAST Report found that “clearing and reallocation of Federal spectrum is not a sustainable basis for spectrum policy due to the high cost, lengthy time to implement, and disruption to the Federal mission.”  And, as if this was not significant enough, PCAST went on to find that “although some have proclaimed that clearing and reallocation will result in significant net revenue to the government, we do not anticipate that will be the case for Federal spectrum.”  And what is PCAST’s solution?  According to PCAST, “the norm for spectrum use should be sharing, not exclusivity.” (Emphasis supplied.)

Needless to say, PCAST’s recommendations represent a radical departure from established U.S. spectrum policy since the 1990’s, which successfully implemented a paradigm of auctioning of spectrum for its best and most efficient commercial use.  Indeed, while geographic spectrum sharing between government and the private sector certainly has its continued use, are we really willing to abandon any hope of clearing and auctioning government spectrum for an increasingly spectrum-starved CMRS market?  Perhaps Commissioner Pai states the issue best:

Although initiatives to repurpose federal spectrum for commercial use have ground to a virtual standstill recently, now is not the time to wave the white flag.  Rather, we must reinvigorate our efforts to reallocate additional federal spectrum for mobile broadband use.  Doing so will require leadership across agencies.

Leadership is an essential component of significant change, but good leaders are difficult to find.  I’d trade a change to good incentives over the expectation of good leadership any day.  Perhaps allowing federal agencies to keep a healthy share of the value of the spectrum they surrender may move things along faster, which, in turn, may even allow these agencies to invest in more efficient wireless technologies.  If we are going to rely on markets to establish proper incentives for allocating spectrum, then perhaps it’s time to go all the way.