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Not on innovation alone: Politics and the Regulation of Television White Space

On November 4, 2008, the Federal Communications Commission (FCC) commissioners voted to open up broadcast television white space for unlicensed use. (http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-286566A1.pdf). This decision to free up a portion of the radio frequency (RF) spectrum was generally positive for the public, and may improve delivery of telecommunications services. However, this outcome had little to do with equitable decisions by the FCC or the public-mindedness of industry. Thurman Arnold may call it lucky that the interests of influential social institutions happened to align with the common good.

A. Background on RF spectrum regulation

When broadcast radio was invented in the early 1900s, a station broadcasted at its ‘own’ frequency, free from interfering signals. Usable RF frequencies were conceptualized as a sort of ‘space’, and the common law conferred an exclusive near-property right to this space. RF bands as property was codified in the Radio Act of 1927, persisting ever since, with the FCC regulating them as a national resource under the commerce powers. Besides allocation for government use, exclusive licenses are granted for RF bands to private broadcasting and other telecommunications. Licensed frequencies were often sold through auction and allowed to be resold in secondary markets. (http://www.ntia.doc.gov/osmhome/allochrt.pdf). The FCC’s exclusive stewardship of RF spectrum combined with Coasian allocation of RF ‘space’ is an example of pragmatism of social institutions that does not adhere strictly to ideological boundaries. Over time, most usable RF spectrum in the U.S. was allocated under that premise, leaving few limited bands of ‘white space’ where devices can operate without a license.

B. The Public Benefits of White Space

While most RF bands were private from first regulation to present, the lack of exclusive control of white spaces led to the development of many new devices (e.g. wifi networking, Bluetooth, cordless home telephones) which communicate freely in these frequencies. As with any unregulated commons, there was potential for resource misuse. However, many signal interference problems were solved by telecommunications engineering, and the FCC’s limits on device power. (http://ieeexplore.ieee.org/stamp/stamp.jsp?tp=&arnumber=953230&userType=inst).

As of June 11, 2009, television stations switched to digital broadcasts, leaving a wide gap in RF spectrum formerly allocated to analog television signals. (http://www.broadcasters.org/lab/adobe/dtvadvisory.pdf, http://en.wikipedia.org/wiki/Digital_television_transition_in_the_United_States). Signals in this frequency have much greater range and penetration than in the prior white space, leaving potential to lead to innovations if used as white space. For example, high range wifi router networks may provide cheaper and faster wireless internet that is device-based, instead of subscriber-based. These networks may even integrate other telecommunication services such as cable television, and mobile phone networks, replacing local oligopolies based on exclusively owned infrastructure. These innovations were technological possibilities many years ago; however, spectrum was never de-licensed to serve the public interest. (http://www.benkler.org/agoraphobia.pdf)

C. Politics of the FCC decision making process

Both academic studies (http://jolt.law.harvard.edu/articles/pdf/v16/16HarvJLTech025.pdf) and past experience have shown that unlicensed spectrum may lead to the development of useful technologies; however, this positive outcome did not result from a process for public benefit.

Important decisions by the FCC are voted on by its five commissioners, each one a political appointee. (http://www.fcc.gov/aboutus.html). The agency is subject to political influence by industry, both in lobbying on specific issues, as well as political contributions. Industry groups often contribute to both parties, with aggregate amount spent lobbying the FCC amounting to more than a hundred million dollars per year. (http://www.seattlepi.com/business/124749_lobby03.html). This decision process can be viewed by Arnold as using law and economics as a post-hoc justification for essentially political choices.

In the current decision, broadcast white space had support from device makers such as Cisco and Motorola, as well as software services firms such as Google and Microsoft. The lower cost of internet, in addition to the higher dependence on devices for internet access only serves to increase the bottom line of device and software makers. On the other hand, wireless carriers such as Sprint, T-mobile, as well as television broadcasters opposed this move, viewing it as a pre-cursor to supplanting their traditional subscriber business model.

D. Future regulatory decisions

Soon after the FCC’s decision to open up broadcast white spaces, Larry Page, co-founder of Google, praised the institution on his blog, saying:

"As an engineer, I was also really gratified to see that the FCC decided to put science over politics. For years the broadcasting lobby and others have tried to spread fear and confusion about this technology, rather than allow the FCC's engineers to simply do their work." (http://googleblog.blogspot.com/2008/11/vote-for-broadband-in-white-spaces.html).

This, however, is a mischaracterization of the FCC’s decision. Google and its allies deserve the real praise in influencing the FCC on this issue. Unfortunately, there are no lobby groups beholden to the public interest that have as much resource and influence as the corporations behind the white space decision. While a small portion of spectrum has been opened up into the public common, it was not a democratic exercise of public will. When the decision making process itself is influenced by a few powerful social institutions, the continuation of these public benefits is far from certain. There is no guarantee that industry interests will not conflict with those of the public in the future.

In his discussion on the psychology of social institutions, Arnold outlines how in the Middle Ages, traders and money lenders were able to produce a new system of social organization that overturned the feudal rules of law and economics. Similarly, as technology improves, many of the old rules of law and economics that used to regulate society will begin to break down, as we have seen to a small extent for property rights in the RF spectrum white space. This breakdown may lead to results that are publicly beneficial or detrimental, but in order to consistently allow these advancements to be beneficial a better process for regulatory decisions must be instituted. While the white space decision is a small step in the right direction, the broader question of setting up institutions to decide for the public benefit remains unanswered.

-- By JeffKao - 16 Feb 2010

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