In the handling of spectrum, technological improvement is the philosopher’s stone, capable of turning one kind of material into another. Since the treatment of spectrum as property is an artifact of current regulatory structure, itself an artifact of engineering assumptions, changing the engineering can change what spectrum is, at least in a regulatory setting. This matters, because the inefficiencies and distortions arising from treating spectrum as property create obstacles to more economically efficient and flexible uses of wireless communication.
[…] The potential threat to spectrum holders is clear. We have a set of arguments for creating and enforcing property rights for things that aren’t actually property. We usually apply this artificial scarcity to intellectual property — patents, trademarks, copyright — and grant these rights to protect certain forms of abstract work or communications.
The rationale for all these rights, however, is to reward their creators for novel intellectual work. This does not offer much relief to spectrum holders seeking a justification for continued Government enforcement of scarcity. None of the current holders of spectrum have created any of it — a wavelength is a physical property that cannot be created or destroyed. If spectrum can be regulated without the traditional licensing regime, it’s hard to argue that the Government has a compelling interest in creating and enforcing scarcity.
And this is what makes the current fight so interesting, and so serious. There are simple arguments about interference, but the ramifications of these arguments are about essence — what kind of thing is spectrum? We have the opportunity to get a world where cheap but smart equipment allows for high utility and low coordination costs between users.
See also Slashdot’s Shirky on Spectrum Ownership