A Tale Of Two Spectrum Allocation Policies
By Mike Masnick, Wed Nov 24 02:45:00 GMT 2004

Two different announcements from regulatory bodies in Europe show two very different approaches to regulating spectrum for 3G. The UK drifts towards an open market (though, not open spectrum) approach, while Finland goes with a much more regulatory approach.

The question of how government should regulate spectrum is an ongoing issue around the globe. So far, it appears that just about every solution upsets a lot of people. In the US, the FCC dabbles here and there in spectrum policy without coming up with a more comprehensive plan about the best way to approach spectrum allocation. While there's a push for more open spectrum, the FCC still is trying to solve specific squabbles, while promising to come out with a comprehensive policy at some point in the future.

Over in the UK, it looks like regulatory agency Ofcom has beaten the FCC to the punch, making a major announcement today that it will move to an essentially free market approach to spectrum, once the spectrum has been sold. That is, it will continue to sell off spectrum for use, but rather than regulating who uses it or how it's used, Ofcom will let the companies that buy it resell it, or use it for different purposes than for what it was originally designated. This way, the theory goes, as the market changes, companies can value the spectrum at a reasonable price and make the most efficient use of it -- rather than having it tied up in some boondoggle.

This is quite different than the push for open spectrum, as Glenn Fleishman correctly notes. It's more like "open market" spectrum. The spectrum is still licensed, but once licensed, the owner has much more flexibility in doing what they want with it. This should help to avoid the fully open market lawsuit issue, that would happen if agencies completely opened up all spectrum policy and let the courts sort out the interference complaints using traditional laws.

However, over in Finland, the government is taking a very different, much more hands-on approach to handling spectrum. The government today announced that it may take back a license for 3G spectrum that it had granted to Suomen 3G, a subsidiary of Sweden's Tele2. The problem is that Suomen has not done enough to deploy 3G in Finland, and the government sees the granting of a spectrum license as a two-way deal. It provides the spectrum, the grantee provides a network... or else. The article quotes Finland's minister of communications saying: "A license does not mean that a company just has the right the build a (3G) network, but that the company also has an obligation to build it."

In other words, while the UK wants companies to buy the spectrum and then figure out the most appropriate thing to do with it, the Finnish government has already decided what the best use of the spectrum must be -- and if companies can't deliver, then it's too bad for them. If these two policies remain in place over the next few years, as is likely, it should make for an interesting case study in how spectrum allocation policies impact technology adoption.