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COMMUNET Home

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COMMUNET  February 1996, Week 1

COMMUNET February 1996, Week 1

Subject:

CITS Policy Statement on Spectrum Auctions (Revised)

From:

"W. Curtiss Priest" <[log in to unmask]>

Date:

Fri, 02 Feb 96 09:43:03 EST

Content-Type:

text/plain

Parts/Attachments:

Parts/Attachments

text/plain (130 lines)

Archive: CITS Policy Statement on Spectrum Auctions (Revised)

                         W. Curtiss Priest, Ph.D.
                                 Director
                 Center for Information, Technology & Society
                             466 Pleasant Street
                              Melrose, MA  02176
  Internet: [log in to unmask], Voice: 617-662-4044, FAX: 617-662-6882

                   This document may be freely redistributed

                               January 31, 1996

                        The Will to Create the Future:

                                Special Topic

        "Spectrum Allocation, Auctions and Intergenerational Equity"


In observing the current debates about spectrum, ownership and
auctions it is imperative that we recognize a consideration that
appears absent from the current discussion.

In public policy microeconomics we recognize the importance of
"intergenerational equity" -- this is the principle that no one
generation has the right to impose costs on other generations.

Currently, we are but a single generation that has developed such a
high federal debt that we search for sources of funds to pay off
this debt.  One source of funds has become the auctioning of "public
spectrum" to private holders.  (We recognize the "allocative
efficiency" of using auctions as a means of allocating the use of
scarce resources, laud this use, but question how the resulting funds
should be used.)

Regardless of the urgency to transfer federal debt to taxes on
communications (which is what private ownership amounts to -- because
the cost of the license is passed back to the communications user), we
do not, from the standpoint of intergenerational equity, have
the right to take these "public goods" -- the limited airwave
spectrum -- and make a "devil's deal" in selling it off for all
time in the name of paying off the debt (or in attaining any other
public good) that inures to only one, or a limited few, generations.
This action is simply unfair and thus unconscionable.  Are the
people of any other generation less deserving than we?

While it may appear that 5 and 10 year license periods
augur against an intergenerational concern, we note that these
periods are almost wholely administrative in nature.  Only, say
in the case of PCS, if there is undue interference or a failure
of "build out" might the license be challenged.  Even broadcast
licenses with more strenuous "must carry" requirements are hardly
ever challenged, and if so are rarely successfully challenged.
Therefore, we assume that these auctioned licenses are, indeed,
licenses in perpetuity to the owner.   The $7 billion dollars
received in PCS auction revenues are a one time payment -- to
the coffers of this generation.  Only administrative fees are
charged at renewal.

Further, Priest & Komoski have presented the concept of using
lower frequency bands (including the VHF-UHF band slated for
auctioning once broadcasters move to new, HDTV bands) for providing
nationwide digital universal service.  With a $100 PC card and
a small antenna, an entire community of 10 miles radius can be
put on a community local area network operating at about 300 Mbps.
[MacArthur Foundation funded Workshop held at the Council for
State School Officers, July 7th, 1995, attended by many included
in this mailing.  At the Workshop the frequency hopping technologies
of Metricom and other wireless providers was discussed as evidence
that such a $100 card was not only economically but also
technologically feasible.]

Some people talk about the use of newer unlicensed spectrums in the
1800 Mhz and 5 Ghz bands as the NII wireless Band.  But our research
shows these frequencies, especially 5 Ghz, to be useless in achieving
universal service because of the high costs in creating "cells" to
deal with the extremely short distances these bands afford when
there are obstacles such as walls and buildings.  The higher
frequencies are very unfriendly in creating a true Universal
NII Band without deploying expensive cell infrastructure.  With
physical obstacles these frequencies are limited, only, to 10's or
100's of feet.

Therefore we recommend:

    1.  That all funds received from auctioning the "public spectrum"
        be placed in a Spectrum Trust Fund for all future generations
        to receive benefits.  This Trust will pay interest, and it
        is the interest on the Trust funds that may be used
        by any current generation for any use they, the people, deem
        suitable.  This interest income might be used to reduce the
        federal deficit, to fund technology in schools, or whatever
        "public good" disbursement is deemed deserving.

    2.  And, we recommend, either of two actions:

        a.)  not auctioning the current VHF-UHF spectrum and
        using this spectrum to create a truly affordable form of
        digital universal service (because the character of these
        frequencies are very friendly to a universal digital
        service design that can employ a low-cost wireless
        card.) or,

        b.)  auctioning the spectrum with the interest received
        from the UHF-UHF Trust Fund to be applied, with means
        testing, to provide universal digital service for our
        country.

Footnote:

A pragmatist might say that this position is all well in theory
but this is the "real world."  Perhaps the same was said about
civil rights.

The true role of government is to tackle those issues that are
beyond the marketplace to solve or want to solve.  It is, indeed,
the role of our government, and our leadership to see above the
current morality.  The only possible recourse is a class action suit on
behalf of all future generations against this generation.  Could
such a suit be brought?  And even if so, we have grown tired "ambulance
chasing lawyers" and of paying 1/3rd of the award tithe to the lawyers.
We should be able to do better than that.


CITS welcomes comments to this policy statement.  Please address
them to W. Curtiss Priest at [log in to unmask]

Thank you.

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