ITIF Urges Clear Thinking by Policymakers on How Bands Are Allocated

certainty needed to sustain wireless applications that require large, sustained investments,” but revenue from license auctions should be seen as “a side effect, not a goal in itself,” the report said. Spectrum auctions can generate lots of revenue, but “it is the market mechanism (including tradability on secondary markets) and the type of rights embodied by an exclusive license that make it a productive allocation,” it said. Unlicensed spectrum, “is a good way to prevent usage rights from becoming too fragmented,” but claims of congestion shouldn’t justify making more available, ITIF said: “One commonly cited claim is that unlicensed spectrum’s uses are important and valuable, and therefore more bandwidth should be freed up to ensure more reliable access to it. The problem with this argument is that licensed spectrum exists precisely for those who can’t operate under the uncertainties associated with unlicensed spectrum.” Spectrum sharing has become increasingly necessary as spectrum becomes more congested, ITIF said. Dynamic sharing “could even become the first-best allocation if technological advances enable a generalized use-or-share framework” and “there can be little objection, from a policy perspective, to allowing additional uses of a licensed band that does not cause harmful interference to the licensee,” the report said. But there are also limitations, ITIF said, noting power levels permitted in the citizens broadband radio service band are “327 times lower than those in the exclusively licensed band just above it.”