I am no physicist - I am not even a techie.  But I do try and equip myself with sufficient understanding of the 'facts of things' to know when there may be bull-shit in the air.  Such basic understanding is a prerequisite in my book to any creative thinking about how new technologiews might be creatively deployed so as to impact positively on human relationships.  Back in 1963 I was given a book with the title, "Inventing the Future" - which even then was my sort of reading.  Its author was Dennis Gabor, a Hungarian-born electrical engineer who found a home at Imperial College, University of London and who, in 1971, was awarded the Nobel Prize for Physics for his invention of holography.  Following his retirement in 1967, Gabor had time and motivation to think outside the physical box and, in his own words, "I became more and more convinced that a serious mismatch has developed between technology and our social institutions, and that inventive minds ought to consider social inventions as their first priority."   There may not be much in that book that is directly relevant to our circumstances in 2007, but it is worth pondering on these words of a great thinker and physicist as the issue of the use and allocation of radio spectrum jumps back up the news agenda - in the UK at least.  

This is indeed an important topic with universal implications and without wanting to be too 'gaboring' by racing off into esoteric or philosophical matters, it might be worth asking three fundamental questions that have long been swimming around my mind in relation to this question.  The un-examined conventional wisdom may not always be the best starting place for 'inventing  the future'.  Increasingly that is becoming evident with the issue of 'open access'  networks - maybe the same applies to society's use of radio spectrum.   But before the questions, a little background.

Actually, the trigger for this blog entry was an item in the Daily Telegraph (January 1st 2007) with the title, "Live Acts 'threatened by Ofcom proposals'", suggesting that the UK regulator, (Ofcom) is about to auction off to the highest bidder the spectrum currently reserved by convention for use by radio microphones in theatres and concert halls.  Ofcom is reported as stating that such, "special treatment for certain industries would run counter to its free-market approach to the airwaves."  The article states that this is, "raising fears that cash-rich mobile phone companies will snap it up at prices other industries cannot afford".

QUESTION 1    Does Ofcom (and indeed the regulatory community at large) understand what a 'free-market' really is?  Virtually all the players in today's so-called free-market of television and telecoms have the shape and form that they have as a result of being direct and protected (i.e. regulated) descendents of former monopolies - most if not all of which were deliberately created by state intervention in years gone by.  The BBC, that mother of all television stations, was created by the state, funded by taxation and given exclusive right to use certain parts of the radio spectrum.  All subsequent competitors have (until this day of the broadband internet) basically been regulatory clones when it comes to access to spectrum.   The same in the world of telecoms - starting with the state-created monopolies of the PTTs, we now have a myriad of so called operators - but all singing to the same basic song of using access to technology coupled with sector-specific regulatory protection to provide a 'service' to end users - which, given the abundent and low cost nature of these disruptive digital technologies, could largely be 'self-provided'.   If you are still having difficulty following me, then think about YouTube in the world of television and Skype in the world of telephony.

So it is my conclusion that it is a bit rich for Ofcom to talk about being concerned about 'free-markets' when the biggest and most powerful players in the market place are all artificially created and sustained by yesteryear's public policy and regulation.   Most regulators mouth the mantra of wanting to see market competition put them out of business - but if that were true it would require the growing number of those working in the regulatory community were uniquely odd-balls, cheering on the day of their own redundency.  No - the people working for Ofcom and all other regulators are as human and normal as you and me!

So, as the UK looks forward to the 'digital-switchover' when the analogue signals of the terrestrial broadcasters are turned off and everyone receives their TV by a digitised signal, quite properly the Office of Communications (Ofcom) is starting to ask the question 'what should be done with this spectrum?  It has published its Digital Dividend Review for public consultation, setting out proposals for the most effective use of the radio spectrum released by this switch to all-digital television broadcasting between 2008 and 2012.

Para 1.1      "The radio spectrum is a scarce resource of enormous importance in the modern world."

Para 1.22     "Our objective in releasing the digital dividend is to maximise the value that the use of this spectrum is likely to bring to society over time.   It is emphatically not our objective to manage the spectrum so as to raise revenue for the Exchequer – nor, given our statutory duties, is this a consideration that Ofcom takes into account."

QUESTION 2    What fundamental, a priori reason is there for believing that part of the electro-magnetic spectrum known as "radio freqeuency" (RF) requires specific public policy and regulation?

Not even in the darkest days of Soviet Communism did the apparachniks come up with the idea of allocating (let alone selling off to the highest bidder) the use of the colour 'red' or 'blue'.   How come the millions of citizens around the world can self-organise the use of this 'visible' part of the electro-magnetic spectrum  relying simply on private property rights and the rule of law whereas the RF part of the spectrum requires some centrally organised allocation?  This might generally be refered to as a licence exempt approach and there are strong and well argued advocates for this - plus the evidence of the immense social value and technical and commercial innovation that has resulted to date from such 'license exempt' steps as that which gave us WiFi.   

Now, I am not for one moment suggesting that some process of formal spectrum allocation was not required for the centuries when, unlike wielding a paintbrush of wode, sending an RF signal was costly and exclusive and was done in a somewhat techno-ham-fisted manner.  But the world has moved on and the miraculous digital technologies of optical fibre + silicon chip (computer) + software controlled radio, now mean that smart digital consumer devices are cheaper and more prolific in the developed world than canvas, brushes and tubs of coloured paint.  We can all have access to radio technologies which, only a few years ago, could only be acccessed by a few. So please, PLEASE let us think about such issues from first principles and not simply proceed towards tomorrow on the basis of what we did yesterday.

QUESTION 3  My final question really results from a combination of the first two and is an economic question.   Ofcom states that its objective is, "NOT to raise revenue for the Exchequer".  However, resting on the mistaken assumption in the new digital world that 'spectrum is scarce', it is opting for a process of 'auction' to allocate this supposed scarce resource.  As long ago as March 2003 in an article ("Launching Telecoms II") published  its Quarterly Technology Review, The Economist [  ] spelled out the meaningless of this moden myth of spectrum scarcity, but it suits several vested interests (and of the course the regulator) to ensure it is perpetuated - for where there is scarcity (real or artificial) there are $$$$$$$.   For a fulller account of the facts and arguments behind how "maximising the value that the use of this spectrum is likely to bring to society over time" (Ofcom's words not mine!) can best be achieved by an 'open access' approach, then visit the Open Spectrum Foundation.  Under the visionary leadership of our good friend Robert Horvitz, this non-profit is doing excellent work singing to the same tune as the OPLAN Foundation.

Anything is scarce if 'all of it' it is sold to one intermediary person rather than to anyone in a free market.  Government created market failure is what I call it.   Has Ofcom - or indeed anyone else - taken a look at whether the innovation and wealth creation that results from selling a slug of spectrum to one party - who can then charge end users 'over-the-cost-odds' for access to it, contributes more, less or about the same "value to society" as would be the result of deploying it under a policy of open access, license exemption?     After all, one man's revenue is another persons cost and although there is little doubt that if Ofcom sells of the old analogue spectrum, then budding entrepreneurs will come up with plenty of good ideas about how to use this to make money - and enough to recover the cost of the huge multi-billion dollars they paid for the exlcusive use of the spectrum.  But as we all can now see, such innovation, far from being dampened by a licence exempt strategy, is even stimulated.  I think I can categorically state that more value and benefit has been derived by the world from WiFi, infra-red computer mice and microwave cookers than is every likely to be the case for 3G.  But the UK Treasury did make £22bn from the sale of those licenses but I am still waiting for Gordon Brown to send me a cheque for my share of that - which I reckon ought to be about £500.  With that amount of money, every man, women and child in the UK could afford to set up their own web-based 'radio station'!    But maybe that's not the aim of the Ofcom game.