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Supercommons: Toward a Unified Theory of Wireless Communication

Kevin Werbach, "Supercommons: Toward a Unified Theory of Wireless Communication," Texas Law Review, v. 37:863, pp. 864-973, 2004.

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  • "... both sides fail to come to grips... there is no such thing as spectrum." (p. 863)
  • "... analogies to legal domains that do not presuppose ownership, such as tort." (p. 863)
  • "Liability backstops and safe harbor mechanisms can effectively prevent ruinous interference, while efficiently resolving boundary disputes." (p. 863)
  • "... away from spectrum and toward the devices..." (p. 863)
  • "... position is neither anti-property nor anti-markets." (p. 864)
  • "In mistakenly associating property rights with wireless frequencies, they make novel forms of communication impractical." (p. 866)
  • "The point is that dividing radio spectrum into frequencies is just a consequence of a technical approach to interference management adopted in the late nineteenth century." (p. 870)
  • "... them as "government licensing," "property," and "commons." (p. 868)
  • "... Leo Herzel, in 1951. The argument was taken up brilliantly by Ronald Coase in 1959 in an article that eventually contributed to his 1991 Nobel Prize in Economics. Coase's basic point was that markets are the most efficient mechanisms for allocating scarce resources." (p. 872)
  • (p. 872)
  • Thomas W. Hazlett. The Wireless Craze, the Unlimited Bandwidth Myth, the Spectrum Auction Faux Pas, and the Punchline to Ronald Coase's "Big Joke": An Essay on Airwave Allocation Policy, 14 HARV. J.L. & TECH. 335, 405 (2001) (stating that private property in spectrum is the "enabling policy" that permits competitive allocation): Lawrence J. White. "Propertyzing" the Electromagnetic Spectrum: Why It's Important and How to Begin. (p. 873)
  • Towards a Property Rights Approach to Communications Spectrum, 16 YALE J. on REG 53, 82.
  • (p. 874)
  • "... optimizing the social welfare gains from wireless communication..." (p. 876)
  • "... accept the economists' diagnosis of the problem, just not their solution. The commons critique acknowledges that scarcity does not justify government control of the spectrum, but is, in fact, exacerbated by it." (p. 877)
  • "... FCC's NOvember 2002 Spectrum Policy Task Force Report... suggested that exclusive use should generally be the primary mechanism for desirable lower-frequency spectrum, while commons should be the primary mechanism above 50 GHz." (p. 878)
  • "... desire for fresh approaches given the collapse of the telecom sector and the problems with some spectrum auctions in the United States and Europe." (p. 879)
  • "... but both will almost certainly be part of spectrum policy for the foreseeable future. More important is what the simplistic property vs. commons description leaves out. It ignores an array of new techniques that could transform use of the radio spectrum. Both proposals structure rights too coarsely, creating insurmountable transaction costs for novel communications mechanisms." (p. 879)
  • "... spectrum is more than frequencies and less than a scarce physical resource." (p. 879)
  • "... fundamental reframing of wireless regulation." (p. 879)
  • 89. Peter W. Huber. Telecom Undone - A cautionary Tale, COMMENTARY. Jan. 2003 at 34, 34-38. (p. 879)
  • "The wrong debate, because both property and commons are configurations of the same matrix: a web of rights, privileges and duties assigned to certain types of equipment. The wrong things... concepts such as "spectrum," "interference," and "frequency bands" are deeply misleading. Removing tose veils makes possible a new theory of wireless regulation that best promotes efficiency, equity, and freedom." (p. 880)
  • "The transmissions themselves have no idea whether they are welcome or not." (kc note: bits don't care) (p. 892)
  • "... a social construct arising from collective uses of wireless devices." (p. 892)
  • "I address these arguments in Part IV. Even if they are correct, though, they fail to rebut the commons critique. The wireless commons involves more than unlicensed bands." (kc note: wireless commons org) (p. 894)
  • "UWB transmissions..." (p. 894)
  • "The only things that matter are the effects of the two regimes when seen for what they really are: different configurations of the rights in wireless transmitters and receivers. And in that context, many arguments for property rights are valid only under particular factual assumptions which are increasingly questionable." (p. 901)
  • "The only way to treat frequency blocks like land is to ignore the mechanisms under which spectrum can be used differently." (p. 901)
  • "As Coase demonstrated, there is no "correct" place to assign rights." (kc note: Coase example throughout) (p. 902)
  • "The spectrum fallacy is different. It produces ideas that are not just wrong--they are dangerous." (p. 908)
  • "I believe this will ultimately be the case more often than not, but such an outcome is not guaranteed. If equipment coexistence is expensive (i.e., "spectrum is scarce") and transactions are cheap, exclusive property rights are a superior mechanism." (p. 911)
  • "All of the spectrum policy regimes involve property rights. These are not rights in spectrum or frequencies, but in equipment. The seemingly wide gap between the property and commons models is actually two small differences in the configuration of those rights. The exclusive rights model vests rights in the first isntance in intermediary service providers, while the commons model generally vests them in end-users." (p. 914)
  • "... which I call supercommons, combines incremental experimentation from current baseline lecenses with a universal access privilege wherever a transmission would not be harmful to other systems." (p. 915)
  • "... rights are all frequency-delimited private negotiation will artificially be constrained in terms of frequencies." (p. 916)
  • "... imposed extremely conservative initial limits of UWB to protect incumbent services." (p. 917)
  • "... be to analyze interference claims when nonfrequency limited communications systems are involved. ... fuccy spectrum property rights would be." (p. 917)
  • "The FCC's determination does not mean Sprint has no rights against other users in the frequencies covered by its licenses, but merely that its rights are nto absolute. The FCC could not authorize an identical PCS system in the area of Sprint's license that would cause massive interference, or, to take an extreme case, a PCS jamming service. Sprint's rights must have some boundaries. They are just not well-defined. And that means that the rights of estwhile UWB transmitters that wish to underlay Sprint's system are equally ill-defined." (p. 918)
  • "Consider a conventional high-power television broadcaster today. What exactly does it possess? The traditional formulation is that it has a government-issued exclusive license to a six-megahertz range of frequencies,... " (p. 918)
  • "... and ill-defined protection against interference." (p. 920)
  • "Or it may cause them to claim such degredation as a means to preclude competitive entry." (p. 920)
  • "Any changes under government licensing must be reviewed and approved by the FCC. Under a property regime, the rights holder would be free to make any changes that do not alter the frequency band of transmission or interfere with other owners. This includes subdivision or sale of its rights. The owner could make other changes, but it must negotiate with owners that would have their own property rights affected." (p. 922)
  • "This line of attack rests on the false assumption that the commons relies on a specific legal or technical approach." (kc note: peer production) (p. 930)
  • "Noam suggests that access could be open but still subject to a price mechanism." (p. 930)
  • "... building in reversibility..." (p. 930)
  • "So the FCC created a protected space for innovation, which it called enhanced services." (p. 932)
  • "They may strike an appropriate balance between entry and protection but be unable to adapt when conditions change. What is impractical or unlikely today maybe routine in the future, thanks to changing technology and usage patterns. The optimal level of interferenc eis steadily increasing. A legal regime that cannot adapt quickly is doomed to failure." (p. 935)
  • "It would require the FCC to engage in a top-down definitional exercise, subject to the same inefficiencies as the current licensing process. And it would likely consider only some sharing mechanisms, such as low-power underlay, while excluding other possibilities." (p. 935)
  • "If incumbents know that they must tolerate other systems and that the boundaries of their rights are subject to review, they will have incentives to make their receivers more robust. This is itself a beneficial outcome. Better receivers mean less interference--in effect increasing the availabble spectrum." (p. 935)
  • "There are three classes of interference that could take place. Supercommons devices might unintentionally interfere with licensed systems, or they might deliberately degrade other transmissions. There are also two kinds of systems that can be harmed: private communications networks and public systems such as public safety networks, military radars, global positioning system satellite transmissions, and communication with airplanes." (p. 942)
  • "Interference temperature is a novel concept. It has already provoked opposition from licensed wireless operators. At best, it would provide a safe harbor only for low-power underlay, not for the other supercommons mechanisms such as opportunistic sharing. Nonetheless, as a rough cut to minimize unnecessary litigation, interference temperature may be a useful metric. Its virtue is that it makes quantitative what is today undefined or uncertain. As long as it is not the only boundary between the supercommons and other devices, interference temperature may prove to be a useful measure. More work should be done to determine how to implement interference temperature, and to ensure that it provides enough room for additional unlicensed devices to operate." (p. 947)
  • "The problem with this argument is that a wireless commons is not an absence of markets. It is a different from of market from those prevalent in exclusively controlled spectrum. Commons are markets for equipment, not access." (p. 952)
  • "The argument comes back to Coase. Only this time, not the Coase of The Federal Communications Commission and The Problem of Social Cost, but the Coase of The Nature of the Firm. Coase's insight there was that firms use nonmarket mechanisms internally for management because the transaction costs of market mechanisms would be too great. Similarly, some wireless communicatiosn systems may operate better in a nonmarket configuration." (p. 954)
  • "More fundamentally, focusing on the monetary value paid for spectrum under the current regime is a mistake. Both property and commons approaches would sharply reduce the value, on a per-unit basis, of the hypothetical spectrum resource." (p. 954)
  • "The cost of spectrum access is not a proper yardstick for comparing spectrum uses. PCS cellular operators (who paid billions for their spectrum rights) compete against successors of the local exchange carriers that received original cellular licenses for free, and against Nextel, which cobbled together taxi dispatch licenses through regulatory entrepreneurship. What spectrum costs is far less important than how spectrum is used. And, legal structures that require an ex ante transaction to acquire transmission rights from a private owner make certain forms of spectrum use more difficult." (p. 954)
  • "If freedom from regulation is defined as government nonintervention in individual decisionmaking, then government action to create a commons is the approach involving less regulation." (p. 955)
  • Benkler, supra note 58, at 568 (asserting that an open peer-to-peer network enables democratic discourse and individual freedom better than the current mass-media model); Yochai Benkler. The Battle Over the Institutional Ecosystem in the DIgital Environment, Communications of the ACM, Feb. 2001, at 84, 89 (arguing that a commons in the information environment would enhance the individual autonomy). (p. 955)
  • "Unlicensed parks will not emerge within a property regime because of an information capture problem. A company bidding for spectrum property rights in a governemnt-run auction or a private negotiation must determine whether the value it would receive from the asset acquired would exceed the cost it will pay. For a centrally controlled licensed service, benefits are straightforward to calculate. Service revenues are a function of the number of users. The discounted cash flow from those revenues can be matched against the net present value of the expenses involved, including the initial spectrum cost, the infrastructure build-out to provide service, and ongoing maintainance." (p. 957)
  • "In an unlicensed environment, however, the discounted cash flow analysis is not so simple. A commons depends on competition among manufacturers to develop better equipment and sell it to users. As more users take advantage of the spectrum, the value of communications within it grows thanks to network effects. The spectrum owner cannot measure these values ahead of time, because it must calculate the price it will pay for exclusive control of the entire band instead of whether there is enough of a market to recoup the expenses of selling a device. If the spectrum owner mandates that only certain equipment may be used, it is no different than a licensed service provider." (p. 957)
  • "Yet as WiFi and the Internet itself demonstrate, not all commons end tragically. Well-designed technical or legal constraints can keep the system from collapsing." (p. 961)
  • "The aggregate costs of spectrum transactions increase as the transactional environment becomes more dynamic. If frequency is the only variable, and frequency blocks are well-defined, transactions may be relatively cheap. This is the animating vision of the propertization literature..." (p. 962)
  • "One of Coase's major contributions was his recognition that interference boundaries could be set through property rights rather than government management, because each rights holder would have incentives to both exploit and police its spectrum. Coase's proposed solution, however, was based on the contemporary view of interference when he proposed it. Interference was still thought to necessitate exclusivity in spectrum. The less we think of interference as a high and rigid barrier, and the more we see it as a phenomenon that technology is gradually conquering, the more the transaction cost ledger favors commons." (p. 964)
  • "Even on their home turf of property law, casements are not so simple, as any first=year law student can attest." (p. 967)
  • "Smart digital devices backed by technical standards can coexist without exclusivity, as WiFi and UWB demonstrate. Open entry encourages different business models, with equipment manufacturers taking the place oc centralized infrastructure builders. It also allows for uses that may better achieve the normative goals of democracy, diversity, and autonomy." (p. 970)
  • "The supercommons around traditional communications techniques opens up the final frontier of wireless. By shifting from regimes that require explicit permission for new transmission techniques to one that uses dynamic boundary-setting mechanisms, the supercommons would, over time, allow the wireless communications ecosystem to move toward the theoretical ideal." (p. 973)
  • "The outcome of the spectrumd ebate is extremely important. In the y ears to come, the uses and importance of wireless communication will only grow. As radios become cheaper and more flexible, they will be incorporated into many products and processes that today are unconnected. More than eight billion microprocessors are shipped every year, a number exceeding the population of the earth, yet less than 2% of them are networked. And though virtually every household in America has at least one television, only tens of broadcast stations are available through the air and a couple hundred through cable or satellite." (p. 973)
  • "A vast opportunity lies between those hundreds of channels and hundreds of millions of users, as well as between those millions of networked devices and billions of microprocessors. A new world of communication awaits. Its coastline is only now being mapped; the extent of the hidden continent and its territorial riches remain to be discovered. Now is not the time to fear mythical dragons on the electromagnetic high seas." (p. 973)
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