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Our CEO Lowell McAdam likes to say that spectrum is the “rocket fuel” for the mobile industry. Given the speeds and innovation we’ve seen in the wireless industry, this description is dead on. But where does this critical resource come from and how is it used to meet consumers’ needs for all things mobile?
Back in the day, the FCC used a command-and-control approach to decide who could use spectrum, specifying exactly where, when and how (using which technology). If there were competing interests in acquiring exclusive access to spectrum, or competing technologies, the FCC would hold comparative hearings (sometimes called “beauty contests”) where an administrative judge decided who would put the spectrum to best use.
Today, new licensed spectrum for mobile broadband is almost always auctioned, harnessing the power of market forces to allocate this scare resource. There is also a healthy secondary market where spectrum is bought and sold, allowing it to be used most effectively. And flexible rules allow mobile companies to deploy new technologies to replace old ones in order to use licensed spectrum more efficiently. For example, wireless companies are “refarming” spectrum that recently was used for 3G data to deploy 4G Long Term Evolution.
But not all spectrum is, or should be, licensed. Another key policy innovation was the FCC’s “permissionless innovation” approach to unlicensed spectrum. The FCC identified certain frequencies that could be used by anyone, using any technology, without requiring a license. To be certified for use on unlicensed spectrum, a new product or service need only meet the FCC’s power and emission guidelines. Other than following these basic ground-rules, developers of unlicensed technologies are free to experiment and innovate.
Some people were skeptical that this could work, believing that interference among competing uses would make the spectrum unusable for all. Instead, the unlicensed bands have been incredibly useful to consumers. Today, everything from microwave ovens to cordless phones, baby monitors, home security cameras, Bluetooth and of course, Wi-Fi, operate on unlicensed spectrum. Over time, all of the technologies continue to evolve to use the unlicensed spectrum more efficiently and to improve co-existence with other technologies.
The FCC’s “permissionless innovation” approach to unlicensed spectrum has been an incredible success, unleashing torrents of innovation in spectrum bands that were once considered useless. And as we’ll discuss tomorrow, unlicensed spectrum is poised to unleash a new wave of mobile innovation.
