1.5 Fundamental Management Approach

Historically, regulators have assigned frequencies by issuing licences to specific users for specific purposes – an administrative approach. The administrative approach can also be more or less prescriptive on the details of spectrum use. Often it has involved specifying what equipment a licensee can use and where, and at what power levels it can be used.

This is a good way to control interference yet such methods are often slow and unresponsive to new technological opportunities. They also assume a level of knowledge and foresight on the part of the spectrum regulator which it may not possess. Attention has recently been focused on creating genuine markets for spectrum and spectrum licences under which both the ownership and use of spectrum can change in the course of a licensee's operation. This is a major step beyond the auctioning of licences which are not subject to trading and change of use. It does, however, require the full specification of what ‘property rights’ to spectrum can be traded and utilized.

Some spectrum, especially for short-range use (Bluetooth, Radio Frequency Identification Device (RFID), microwave ovens, various remote control devices, wireless security systems, etc.) need not be licensed at all. This might be the case where users do not interfere with one another, or because new technologies can be employed which are capable of dealing with interference as it happens. If such coexistence can be achieved, the spectrum commons approach is desirable.

Regulators should look for the right balance among the three methods of administrative assignment, use of markets and commons. The choice will be based on such things as the general scarcity of spectrum in various parts of the country and in various portions of the spectrum, the human and financial resources available to the regulator; the various types of use – commercial or public service; and opportunities for innovation and commerce. The growing recognition that spectrum regulators may not be able to collect and process the information needed to make efficient administrative assignments is one of the factors promoting spectrum reform throughout the world.

As an illustration of the changing balance among methods of spectrum management the United Kingdom spectrum regulator, Ofcom, has decided upon a radical shift from administrative methods to a market-based approach, and a smaller expansion of the commons, over the period up to 2010, as shown in Table 3 below. An example of spectrum trading in Guatemala is given in the practice note below.

Note: Table 3.0 is based on a particular method of weighting spectrum in different frequencies, described in the source document.

The three methods are reviewed, and some general observations made on the balance among them, in the following sections.