In a recent COMSOC Technology News article, Thomas Hazlett and Michael Honig discuss how deal with spectrum in those frequency ranges where WiFi and cellular collide. They argue that when spectrum is scarce, unlicensed, “free”, spectrum is economically inefficient. The argument is that free access makes sense when spectrum is abundant, but is economically inefficient when the spectrum resource becomes scarce. Excessive congestion is the expected results in populated locations. In this case licensing with economic mechanisms would be preferable. The 2.4 GHz ISM-band used for WiFi, Bluetooth etc, is the popular example of this. Although, one can agree to the 2.4 GHz case the authors then extend their reasoning to the 5-6 GHz range. This is clearly an economist’s view – spectrum bandwidth is a resource that is treated independently of where it is located and what is the intended, or even possible, use and what are the associate infrastructure cost. As the authors point out, there are basically two types of use – wide area cellular, and short range indoor use.
Frequencies below 3GHz are more or less suited for wide area systems. As these systems create interference over large areas, this creates a spectrum shortage situation that needs to be dealt with in an economically efficient way as the Hazlett and Honig claim.
However, frequencies above 3 GHz (“centimeter waves”) tend to behave in very different way. Here propagation behaves like light and which causes severe coverage problems for outdoor wide-area systems. They require (too) large investments in infrastructure and little money is left for spectrum fees. The frequencies are however, ideally suited for indoor short range systems (similar to WiFi). Very little radiation will leak out of the building where they are used, and thus little interference will be caused in neighboring buildings. As the deployment of base stations indoor is controlled by the building/facilty owner, licensing will not be meaningful. There is only one “user” and the spectrum value in a fictuous auction would yield a zero price. Basically all the centimeter-wave spectrum is available to the building owner and thus we have a situation with abundance.
Again the “property” view on spectrum is more accurated than the concept of uniform resource that has the same properties regardless of location. Some property types are more suited for certain uses, some other types fit other requirements. Location, location, location … is indeed true in spectrum management.