Lord Cornwallis must be turning in his grave at the Supreme Court’s order last week to auction 2G spectrum. The debate about the relative merits of auctions versus administrative allocation that Cornwallis started in 1784 is still going on. Cornwallis, as soon as he became governor-general, overturned his predecessor Warren Hastings’ system of auctioning revenue collection rights to the highest bidders, and switched to a one-time assessment system which he hoped would encourage landlords to think long-term. A cottage industry of Indian economists has flourished debating this decision ever since.
The electromagnetic spectrum is to the Information Age what land was in Lord Cornwallis’ time: a critical source of societal wealth. And just as it was believed that a zamindar needed exclusive rights to a piece of land, to be incentivised to use it productively, it is now believed that telecom operators, the zamindars of the Information Age, also need such exclusivity in the use of spectrum to work it and deliver gigantic auction bonanzas for governments.
But listen to this fable from Stuart Buck, writing in Stanford Technology Law Review. You are in a crowded party where so many people are talking that you can barely hear your own voice in the din. Suddenly, officious-looking people arrive, announcing that they are from the Federal Speech Commission — established recently to solve the problem of people not being able to hear each other at noisy parties like this. They ask everyone in the room to line up and explain what they want to converse about. Based on the quality and depth of the proposed conversation (preference would be given to “useful” conversations such as those on economics and foreign affairs), rights for talking in turn for the rest of the night would be issued. This system went on for some time, till the authorities discovered a better system: why not sell off the right to speak at parties to the highest bidder? It would generate money for the government as well as make parties less noisy.
But, points out Buck, the goal of promoting easy listening at parties could as easily have been attained by the straightforward measure of asking everyone to lower their voices. The government need not do this enforcement, but may leave it to citizens to lower or raise their voices as needed. Why not do the same for spectrum, he asks.
This is not as far-fetched as it sounds. Spectrum is seen as scarce – and thus valuable – only because the current technology used separates conversations into channels’ different frequencies. A licence-holder would thus be allowed exclusive use, for example, of 800-820 MHz. The problem with this system is that, just as some zamindars in Cornwallis’ time used the land allotted to them productively and others let it go to ruin, some spectrum licence-holders use the spectrum allotted to them well and others let it go unused or poorly used.
New technology is emerging that allows devices like mobile phones to be “cognitive” of their surroundings. This technology, called “cognitive radio”, keeps track of transmissions across a wide range of frequencies, and transmits in that portion which is unused at that moment — just as in a party where everyone speaks in a low voice and in the gaps of others’ conversation.
The reason the world is not leaping to embrace this, says Professor Martin Cave, an adviser to the UK and European Union governments, is that some of the chips needed are still not fast enough to work in the 900 MHz level, where much of cellular traffic is concentrated. When such technologies become available, spectrum licensing will no longer be needed.
But on the other hand, in India, if there was no high price for spectrum, what would the government do about raising revenue and what would our media do without “scams”?
