Toward an Evolutionary Regime for Spectrum Governance: Licensing or Unrestricted Entry?

Until recently, the Federal Communications Commission licensed the airwaves to control interference via a cumbersome administrative process. Now, just as the FCC is testing market mechanisms to allocate licenses, there is pressure to open up the spectrum to all comers. Advocates of spectrum ''commons'' maintain that new technologies such as spread spectrum and ''smart'' radio make licensing unnecessary and impractical.'' Here, William. J. Baumol and Dorothy Robyn evaluate two options for spectrum governance: a market approach that treats licensed access to the spectrum as private property and a commons (or unlicensed) approach. They conclude that while neither is perfect, a commons regime would have severe shortcomings, including the creation of powerful vested interests. They embrace a modified market regime, in which the government could change the rules if necessary to accommodate currently unforeseeable changes in technology and other circumstances.