Spectrum Assignment Policy: Towards an Evaluation of Spectrum Commons in Thailand

Licentiate thesis, 2010

There is consensus among economists, engineers, and lawyers that a traditional command-and-control approach to spectrum assignment is inefficient and that a market-based or commons approach can be more efficient. The purpose of this thesis is to find the benefits of using spectrum commons for frequency assignment in Thailand. To satisfy this purpose, four main contributions are provided: 1) a framework to understand the institution of spectrum commons and its application to Thailand, 2) an approach to explain the advantages and disadvantages of spectrum commons, 3) an exploration of the use of a framework for a benefit and cost analysis to valuate the spectrum commons, and 4) possible implications of using spectrum commons in Thailand. These contributions will serve as information for a regulator to make better-grounded decisions on frequency assignment and on whether to license or unlicense spectrum. The thesis uses history, content analysis, and literature critique as its main sources. The content analysis and literature critique are based on the public consultation in 2008 by the European Radio Spectrum Policy Group. It addresses the aspects of a European approach to the collective use of spectrum and identifies the advantages and disadvantages of spectrum commons. To describe the institution of spectrum commons, the property rights regimes by Schlager and Ostrom (1982) are used. This is based on three economic institutions originally described by Kiser and Ostrom (1982) and later adopted by Field (1992). This information is examined, together with the benefit and cost analysis based on the research by Campbell and Brown (2003), Indepen (2006), and Sweet et al. (2002). Data from this examination contribute to defining a framework that can be used to valuate spectrum commons in Thailand. The institution of spectrum commons in Thailand comprises technical and non-technical aspects. The technical aspects are power limitation and use of the specified frequency band, and the non-technical ones are frequency sharing among users and no endowed rights to request compensation from interfering parties. The advantages of spectrum commons are lower entry barriers for new entrants, a reduction in administration work (such as defining property rights to use frequency, auction process, etc.), and enhancing social benefits. These attributes contribute to increasing the potential for innovation and stimulating further demand for new technologies. The main disadvantage of spectrum commons is irreversibility after spectrum assignment, congestion, and limited quality of service. Even these eventual limitations can be solved with the advancement of technology, while the threats, e.g., lack of innovation while sharing with licensed services, are questionable. The thesis argues that spectrum commons has more strengths and opportunities than weaknesses and threats. In order to implement the spectrum commons and valuate the usefulness of this approach in practice, a framework of benefits and costs is defined. The output of this thesis can be used as information for regulators to decide whether the frequency should be licensed or unlicensed and to evaluate the consequences of implementing spectrum commons.