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EU May Push for Competitive Spectrum Trading
anaesthetica writes "The Financial Times is reporting that Viviane Reding, the EU media commissioner, wants to spur a pan-European market through which companies could buy and sell cross-border access to the European spectrum regime, including frequencies used by TV, radio, mobile telephone and broadband services. Large European media companies are skeptical about the spectrum trading plan, saying both that there is no logic behind a pan-European telecom model, and that such a plan could interfere with satellite radio. Ms. Reding believes that the change would spur harmonization of the fragmented European telecom band allocation. This change is set to coincide with the 2012 switch from analog to digital TV broadcasting, when a significant portion of the spectrum will be freed up."
This sounds less like a change in the method of comepetition and more like the end result will be a standardization. I like the idea of standards.
Here in the states, my father is always calling me and saying, "turn the tv to channel 3 quick!" and I'm like what station is channel 3? and he's like "it's channel 3!".
He never seemed to have gotten the idea that different networks operate on different channels depending upon provider and locale.
Of course, I know that channel 3 and 10 and 13 are for some reason very special numbers in the television scheme of things.
I wonder, do you think that some day television channels will be replaced by URLs of some sort?
It's going to be strange when the airwaves are free of broadcast television, and when one day in the garage you run across an old tv, hook it up, prop up the antennas and see that there really is nothing being broadcasted.
I feel sorry already for the extraterrestrial's SETI programs - they only have a small window of less than a century to grab our raw carrier waves.
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This is just a pure no-brainer. Let's say that I live on the border of France and Belgium... if the two countries are on different frequencies, I'm going to be SOL on a lot of the services that are going to be brought around with the huge bandwith sale. In the US, the bandwith works because it's standardized across the nation (hence you can go coast-to-coast on your cell phone on the same fricking network). In the EU, this just makes sense to have this same model, because of the area involved. Having your cellphone work in England as well as Turkey should be a good boost for this plan.
The last online auction of 3G licenses fetched 22.5 billion Pounds against the expectations of 3 billion. The government never knows what the frequencies are worth to the telephone companies, so, let them fight it out in a transparent auction. Devide 22.5 billion pounds with UK's population. It was the biggest auction in history.
So basically, the companies with the current monopoly are condemning a plan to try and gradually remove their monopoly. How Odd.
Why do you think that spectrum isn't scarce? Remember that higher frequencies are capable of transmitting more information per channel, but at the cost of shorter range. So there's no need to regulate something like wi-fi, which is high frequency and short range, but even VHF spectrum is pretty crowded with military and public safety users, in addition to FM for radio and TV, and lower parts of the spectrum are extremely valuable due to the ability to transmit long distances and the broad channels needed to get acceptable data throughput. It's true that some of this will be freed up as more services go digital and better yet TCP/IP, but mesh networking is not good for low-latency applications, and there's no indication that this one-time savings will keep us ahead of the increasing demand for bandwidth in the medium-term. So bandwidth is certainly scarce now, and likely will be so for at least the next 50 years, which is plenty long enough to plan public policy around.
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In eastern Europe, we still do trade Spectrums, although nowadays they aren't too competitive.
Firstly:
The RF Spectrum is land, it is a fixed quantity.
Secondly:
Being land, scarcity comes into play, There's only a limited number of frequencies suitable for ionospheric propogation for example, and these frequencies change with time of day, season, sunspot number and many other factors (which aren't fully understood) so for reliable communications a range of frequencies is needed (and now with Automatic Link Establishment communications over HF is much more reliable).
Similarly, there's a limit on the frequencies which don't get absorbed by normal atmospheric conditions, a limit on the range of frequencies for reliable short range communications.
And the demmand for frequencies is very high. The RF spectrum is packed with users, be they domestic, broadcast, commercial, military, emergency services, scientific or PMR.
Thirdly:
Markets fail when scarcity is involved. They cease to be efficient, the very definition of failure, so your statement that you cannot have a market until there is scarcity is just plain wrong.
I'd favour a transparent auction of parts of the spectrum for commercial users, with a Land Value Tax on spectrum use.
I'm not qualified to comment on your first two points, but your third is just plain wrong. From Wikipedia:
Scarcity means not having sufficient resources to produce enough to fulfill unlimited subjective wants. Alternatively, scarcity implies that not all of society's goals can be attained at the same time, so that we must trade off one good against others.
If trading some goods for others isn't a market, I don't know what is...