Here's a great article by Sarah Lai Stirland for the Seattle Times that explains the truth about the amazing consumer benefits of wireless and the fallacy of spectrum scarcity:
Open-spectrum advocates say it will boost technology
(via BoingBoing)

The core of this idea is the belief that, if the rules are tweaked the right way, technology companies in the next five years will have brought to market the equipment that will make the notion of electromagnetic-spectrum scarcity, a fundamental issue of telecom economics, seem quaint.

Equipment makers would create devices that would intelligently navigate through the congested airwaves — the so-called spectrum — to avoid virtual traffic jams and allow everyone from broadcasters to kids with handheld devices to use the spectrum. Consumers and tinkerers could come up with their own ideas for new applications that would run on these devices, much as they have on the Internet. In turn, the growing number of applications and tools would drive equipment demand, fostering growth of this wireless version of the Internet.

Several chip-making companies are developing products that would power this sort of equipment. They expect to see the first products on the market in the next couple of years.

Here is the full text of the article in case the link goes bad:

http://seattletimes.nwsource.com/html/businesstechnology/134564261_btspectrum28.html

Open-spectrum advocates say it will boost technology

By Sarah Lai Stirland
Special to The Seattle Times

WorldCom is bankrupt. AT&T is dismantling itself. And numerous telecommunications start-ups poised to compete in the broadband revolution are dead.

In light of telecom's death spiral, the prognosis for endless bandwidth and ubiquitous networked computing looks dire.

But a growing group of lawyers, engineers and telecommunications analysts believes that it has the solution needed to finance, develop and ultimately restore the broadband vision: The solution lies with you, the consumer. All we need is a little help from the Federal Communications Commission (FCC).

The core of this idea is the belief that, if the rules are tweaked the right way, technology companies in the next five years will have brought to market the equipment that will make the notion of electromagnetic-spectrum scarcity, a fundamental issue of telecom economics, seem quaint.

Equipment makers would create devices that would intelligently navigate through the congested airwaves — the so-called spectrum — to avoid virtual traffic jams and allow everyone from broadcasters to kids with handheld devices to use the spectrum. Consumers and tinkerers could come up with their own ideas for new applications that would run on these devices, much as they have on the Internet. In turn, the growing number of applications and tools would drive equipment demand, fostering growth of this wireless version of the Internet.

Several chip-making companies are developing products that would power this sort of equipment. They expect to see the first products on the market in the next couple of years.

The group wants the FCC to significantly modify and limit the way it uses auctions to allocate spectrum, while encouraging the spectrum's current occupants to share. The current auctions give winning bidders exclusive rights to portions of the spectrum.

In an ideal world, the FCC would treat the airwaves like a highway system nobody owns and enforce rules governing how people use its lanes without crashing into each other, the group says. And in cases where this isn't possible, the FCC would allow people to drive across other people's "property" as long as they keep a low profile and don't do any damage.

Given this freedom, inventors and entrepreneurs would invent new vehicles and new ways of using the highway, the thinking goes. Consumers would finance the development of the airwaves by buying the devices that suit them best and abiding by the rules of the road that prevent nasty accidents.

But to make this vision a reality, the devices need a slice of the spectrum that would form a virtual park or an airwaves commons where equipment makers and others could experiment. In addition, common protocols — industry standards that allow devices to understand each others' communications — and rules are needed to prevent accidents and to make sure everyone gets a fair shake.

Users also would need to adopt a common understanding of rights and responsibilities to quell potential disputes, prevent potential damage from airwave interference and minimize opportunities for litigation.

Outlining the vision

Discussions within a group calling itself the Open Spectrum Ad Hoc Consortium have resulted in a number of detailed outlines of this vision and how it would work. Among its members are such influential luminaries as New York University School of Law professor Yochai Benkler, Internet law visionary Larry Lessig and the Internet pioneer David Reed.

"To take advantage of the fantastic potential of open spectrum, we must change our spectrum policies. With few exceptions, existing laws and regulations are rooted in historical anachronisms," writes Kevin Werbach, a technology consultant and a member of the group, in a policy paper published recently.

Hundreds of other stakeholders have filed comments with the FCC on the issue of spectrum management, an issue the commission is rethinking. In June, FCC Chairman Michael Powell created a task force to examine the issue, and it is scheduled to release a report with recommendations this week.

But the open-spectrum advocates have found a powerful ally in Microsoft, which has launched a full-fledged lobbying effort in Washington, D.C., to promote the idea.

In a July letter to the FCC, Microsoft Chief Technology Officer Craig Mundie outlined a rationale for developing wireless broadband networks that sounded remarkably like the one the open-spectrum consortium espouses.

"Such networks can develop in unlicensed spectrum — using technologies, network architectures and financing models that are different than those used by existing networks," he wrote. "One of the most important and often overlooked consequences of the creation of unlicensed bands was the tapping of an entirely new source of capital to build networks: the financial resources of the users themselves."

Microsoft has hired the Washington, D.C.- based law firm of Harris Wiltshire & Grannis to lobby Congress and government agencies. In addition, Pierre De Vries, Microsoft's director of advanced product development, has been involved in explaining the company's viewpoint on the issue in workshops at the FCC this summer.

While the fast-growing Wi-Fi technology — which connects computers to the Internet through high-speed wireless networks — has developed in the unlicensed portion of the spectrum, De Vries also sees the need for the FCC to establish rules and enforce etiquette in this band.

"There are an increasing number of stories where people in an apartment, for example, build a data network and a neighbor buys a baby monitor or a cordless phone, which works in the same piece of spectrum, but without taking into account that there are other radios in the spectrum," he said.

"So when the cordless phone is in use, the data network doesn't work very well."

Just a utopia?

As popular as the idea of a spectrum commons is in some circles, others write it off as an engineer's utopia. Still others have called for a more market-oriented approach, but they disagree when defining a market approach.

Gerald Faulhaber and David Farber, professors at the University of Pennsylvania, advocate a "big-bang" approach in which the FCC would hold a single auction for all of the available spectrum and then allow secondary trading of those rights.

NYU's Benkler, among others, cautions against this approach. He warns that giving people permanent property rights could put the FCC in a regulatory straitjacket that would prevent it from backing away from failed policy experiments.

Meanwhile, the FCC has moved cautiously in the past year to change its regulations to allow for the development of new technologies, such as ultrawideband and software-defined radios.

Sony, Microsoft and other companies are interested in ultrawideband for its ability to help consumers zap bandwidth-greedy content such as video around gadgets in the home.

But any move by the FCC faces a thicket of political opposition and criticism from companies holding licenses, as well as other spectrum occupants.

They worry that new applications could interfere with their existing uses of the spectrum.

"Every time the FCC tries to move forward on policy, the current stakeholders have a lot to lose if the system changes, so that slows things down," says Stagg Newman, a former FCC chief technologist, now a senior telecommunications expert at McKinsey in Washington, D.C.

While many in the community laud the vision of the open-spectrum revolutionaries, they also believe it's something that won't be implemented soon.

"If we were starting with a clean slate and clean spectrum, with no historical baggage, sure we would go build things that way, but the challenge facing us is how do we get from here to there?" says Vanu Bose, founder of Vanu, a Boston-based software-defined radio start-up.

Nevertheless, during the spectrum-policy workshops this summer, FCC Chairman Powell and Commissioner Michael Copps supported spectrum sharing, unlicensed bands and urgent reform. While acknowledging the likely political obstacles, Powell noted that Wi-Fi's explosion in popularity has significantly changed the political equation.

"Wireless is not a foreign thing to consumers," he said.

"It's becoming an indispensable thing to the average consumer and that changes minds and that changes policy. I think that's really, really important."

Sarah Lai Stirland writes frequently about public policy and technology. She can be reached at sarah@sarahstirland.com.