If you’re reading this post, chances are you own a smartphone, tablet, or a laptop computer—if not all of the above. When you use any of these devices to communicate over the Internet without a hard-wired connection, how does information make its way onto your screen? The answer: through the electromagnetic spectrum.
Indeed, although the air that surrounds us may appear empty, it’s actually full of information that travels across various frequencies. We can see a tiny portion of these frequencies—which we perceive as light—but most of the electromagnetic spectrum is invisible to the naked eye. The signals transmitted over spectrum, however, could not be more important to our modern way of life. Spectrum not only enables us to communicate wirelessly with our devices; it also empowers us to pinpoint our location using satellites, allows airline pilots to communicate with faraway air traffic controllers, and equips local broadcasting stations to transmit television programs to antennae.
Even though we’re surrounded by spectrum, it isn’t a limitless resource. In a finite space, spectrum can carry only so much information, while different frequencies—wavelengths—vary in their ability to travel long distances and penetrate buildings, trees, and weather. Fortunately, advances in technology have enabled spectrum to be used more efficiently, fitting more information into a smaller spectral footprint. But as we watch more and more high-definition videos and play increasingly immersive video games over the Internet, demand for spectrum often outstrips the available supply of it.
Who decides how spectrum is used and who may use it? The answers to these questions matter a great deal in determining whether we’ll all be able to enjoy the benefits of wireless communication at its full potential. Unfortunately, the government has long regulated the use of the airwaves with the mindset of a central planner, with bureaucrats dictating how spectrum will be used—instead of market forces driven by consumer preferences. Although a series of auctions conducted by the Federal Communications Commission since 1994 has introduced market participation into the spectrum allocation process, a vast quantity of valuable spectrum remains tied up with legacy users—including many federal agencies. Moreover, when the FCC sells spectrum licenses to the highest bidder, the rules governing these auctions often distort marketplace outcomes.
In a new study, Joe Kane and I discuss in greater detail why spectrum matters, how it has historically been allocated, and why lawmakers should adopt a new approach to the airwaves. We call for the government to recognize property rights in spectrum, superseding the status quo in which the FCC regulates spectrum licenses. And we explain why consumers will benefit from this policy, which will yield lower prices for devices that rely on spectrum and provide a healthier landscape for wireless innovation.
The full text of the new study, A Case for Property Rights in the Electromagnetic Spectrum: How Private Markets Can Unleash Telecommunications Innovation, is available here.
You can read more on tech and telecom policy in CEI’s recent publications Free to Prosper: A Pro-Growth Agenda for the 115th Congress and First Steps for the Trump Administration.