Legal and regulatory issues regarding spectrum rights trading

Abstract

The FCC's historic “command-and-control” approach to spectrum management has contributed to spectrum scarcity, especially as it relates to spectrum below 3 GHz. This approach has also made it difficult for spectrum users to adjust their business plans to the needs of the marketplace. A more flexible regulatory regime would increase spectrum efficiency and foster innovation and new services. In order to promote more flexible use of spectrum, the authors recommend a number of regulatory and statutory changes, including (1) the elimination of use restrictions for new wireless allocations; (2) the replacement of existing use restrictions with power limits sufficient to minimize the potential for harmful interference; (3) the enactment of rules expressly allowing private parties to “contract around” established interference limits; and (4) the identification of “safe harbor” spectrum leasing arrangements that are deemed permissible under the FCC's license transfer of control requirements. The authors also recommend a number of statutory reforms, including granting the FCC express statutory authority to auction spectrum licenses held by private parties and assess spectrum fees upon users of auction-exempt spectrum.