Great expectations: using the language of innovation to command efficiency and shift the burden of spectrum scarcity.

AuthorMorris, Andrew

TABLE OF CONTENTS I. INTRODUCTION 497 II. BACKGROUND 500 A. Purpose and Basis of Spectrum Regulation 500 1. Why the FCC Regulates Spectrum Use 501 2. Statutory Basis for Regulating Spectrum and Interference Standards 502 B. Approaches to Regulating Spectrum 504 1. The FCC Has Traditionally Favored Incumbents over New Entrants 505 2. The FCC's Spectrum Policy Has Changed over Time to Reflect the Values of Innovation and Efficiency 507 a. The FCC Considers Both Technological Capability and the Need for Innovation When Seeking Gains in Spectrum Efficiency 510 b. The FCC Has Ordered Technological Changes to Increase Spectrum Efficiency 511 c. The FCC Has Eased Back on Traditional Deference Granted to Incumbent Interests 513 C. The FCC's Decisions to Promote Efficiency Are Entitled to Judicial Deference 514 III. ANALYSIS 517 A. The FCC Has Indicated a Willingness to Shift More of the Burden of Spectrum Efficiency onto Licensed Incumbents by Placing Less of a Premium on Technological Certainty 517 B. The FCC Should Feel Empowered to Rely More Heavily on Its Mandate to Innovate and Promote Efficiency Given Judicial Deference to Technical Predictions 520 IV. CONCLUSION 522 I. INTRODUCTION

Wireless innovation depends on avoiding near-term spectrum scarcity, but a framework for accommodating new users in fields as diverse as driverless cars and wireless microphones must somehow reconcile the interference concerns of incumbent operators with an increasingly crowded spectrum environment. Because spectrum is scarce and highly valuable, the Federal Communications Commission (FCC) must strike the right balance between incentivizing the development of new technologies and protecting the rights of existing users. (1) Fortunately, the FCC has already adopted such a framework, albeit in piecemeal fashion. Recent actions taken by the FCC to migrate old technologies into repackaged broadcast spectrum indicate a willingness to push for spectral efficiency and innovation even as the problem of harmful signal interference grows larger. (2)

The FCC's Broadcast Incentive Auction (Incentive Auction), which involves repackaging digital television channels to free up new wireless broadband spectrum, illustrates this tradeoff. (3) The FCC, acting on a congressional mandate in the Middle Class Tax Relief and Job Creation Act of 2012, has encouraged television broadcasters to relinquish spectrum they no longer need (given advances in technology and market development) in exchange for compensation. (4) Whatever spectrum the FCC reaps will be repackaged and sold to wireless broadband operators on a licensed basis. (5)

Some of the repackaged spectrum includes Television White Spaces (TVWS), vacant frequencies that originally served to prevent interference between analog television stations, (6) but now host various white space

devices (WSD) such as wireless microphones. (7) Because the FCC's Incentive Auction will dissolve the TVWS frequencies, WSD manufacturers are scrambling to find new spectrum for their products in an increasingly spectrum-scarce environment. (8) However, the FCC has sought to make accommodations for incumbent users of WSDs, wireless microphone operators in particular. The FCC believes that developing technology will allow these displaced users to operate in the guard bands of the repackaged television spectrum and in the duplex gap of the post-auction 600 MHz band. (9)

The FCC's proposals to accommodate the needs of unlicensed TVWS users is emblematic of a bolder willingness to rely on the agency's innovation mandate (10) to command greater efficiency and shift the burden of spectrum scarcity onto incumbent users. (11) By suggesting that both licensed and unlicensed wireless users can coexist in narrower bands of spectrum--guard bands and duplex gaps--while simultaneously requiring more stringent power requirements on the devices themselves, (12) the FCC has signaled an intention to promote innovation not only among displaced stakeholders, but also among licensees, such as TV broadcasters and wireless broadband users, who will operate adjacent to the new guard bands. Unless they can adapt, licensees and incumbent users of repackaged broadcast spectrum may be forced to operate with less protection from interference as guard bands shrink to accommodate both old and new uses.

Whereas the FCC's previous attempts to accelerate technological transitions relied to varying degrees on evidence that existing technology could mitigate interference concerns, (13) the decision to open the guard bands of repackaged broadcast spectrum for unlicensed operations relies on the FCC's explicit assumption that technology will evolve to mitigate the likelihood of harmful interference. (14) The FCC's confidence in its own predictive judgment, particularly as contained in its final rule for wireless microphone operators (Final Rule), represents a novel approach to reconciling spectrum scarcity with the desire to accommodate new technologies (15)--an approach that might be summed up as "adapt or die."

This Note argues that the steps the FCC has taken to accommodate displaced TVWS users in its June 2, 2014, Incentive Auction Rule and Order (and subsequent proposed rulemakings) are representative of a policy shift that embraces the language of innovation and efficiency to justify hard choices about how to allocate the burden of spectrum scarcity. (16) This shift is strategically well-considered given the judicial deference afforded to questions of a technical nature. (17) Furthermore, this shift has the potential to become the prevailing basis for settling interference disputes in a crowded spectrum environment.

Section II of this Note begins with a description of the FCC's basis for regulating spectrum, its goal of promoting efficiency, and the approaches it has taken, particularly with respect to balancing the interference concerns of incumbents versus new entrants. Section II observes that the language of innovation and efficiency has guided the FCC's most recent proposal concerning microphone users by shifting some of the burden of technological transition onto incumbent licensees, which marks a change from the deference traditionally afforded to licensed users. Section II concludes with a discussion of the judicial deference traditionally afforded to the FCC whenever it offers predictions or judgments about the technical feasibility of spectrum-related proposals.

Section III argues that the FCC should it embrace its mandate to promote innovation and efficiency, even in the face of technological uncertainty. Section III concludes with the argument that the FCC should continue to employ the language of innovation when determining how best to manage the burden of spectrum scarcity, because underlying assumptions about the future development of spectrally efficient technologies will tend to be reviewed by courts with heightened deference.

  1. BACKGROUND

    1. Purpose and Basis of Spectrum Regulation

      The FCC's application of its statutory authority to referee interference disputes between incumbents and new entrants exposes the broader priorities underlying spectrum allocation. Foremost among these priorities is respecting the investment-backed expectations of incumbent licensees, one of the FCC's traditional goals. (18) However, a new policy goal can be seen emerging--one that places a greater premium on the innovative potential of new technologies to alleviate spectrum scarcity. (19) The FCC has acted on this policy goal in the past, although tentatively, and with varying degrees of deference to affected incumbents. The transition from analog to digital television, the creation of MedRadio and Medical Body Area Network (MBAN) wireless services, and the various narrowbanding initiatives of the previous decade have all tested the FCC's willingness to push for greater efficiency on the part of incumbents and entrants alike.

      The regulatory framework that has emerged out of the Incentive Auction represents a significant development in the FCC's ongoing policy shift, one that downplays the need for technical certainty as a predicate for implementing tougher standards and mandating greater efficiency. Although this shift emerges out of proposals to permit unlicensed wireless microphone operations in the guard bands of postauction spectrum, the underlying goals of efficiency and innovation extend beyond licensing classifications. (20) By requesting input on newer, more efficient, access models for spectrum allocation, (21) and by challenging all wireless users to adapt to an evolving technological landscape, (22) the FCC appears to value innovation, particularly in the form of more spectrally efficient technology, as a guiding principle of spectrum policy. In turn, this principle may provide a convenient, public interest justification for commanding change to alleviate scarcity.

      1. Why the FCC Regulates Spectrum Use

        The FCC generally adheres to a framework of increasing capacity, promoting competition, and advancing the public's interest whenever it regulates the use of spectrum. (23) However, such an expansive framework often yields to more specific considerations, such as the need to promote innovation or efficiency. (24) Arguably the most significant decision to be made when crafting an appropriate spectrum regulation involves deciding how to avoid interference between users while respecting existing rights and expectations of incumbent operators.

        Radio spectrum encompasses the range of frequencies over which telecommunications may travel. (25) Frequencies are grouped into different bands which have different propagation characteristics. (26) One constant, however, is the existence of interference, which is what makes spectrum scarce. (27) FCC Rule 2.1(c) defines "interference" as "[t]he effect of unwanted energy due to one or a combination of emissions, radiations, or inductions upon reception in a radio communication system, manifested by...

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