One of the main policy questions in our use of radio spectrum is whether or not to manage the spectrum as a commons. Leaving the 802.11 portion of the spectrum as a commons has created a rich network of wireless access points. Some idealists envision being able to traverse the country and have a continuous wireless connection.
Hang on … isn’t one of the lessons of common pasture, of overfishing, of air and water pollution, that such open access leads to congestion, overuse, and exploitation? And dynamically speaking, who would invest in the wireless network, with no expectation of profit? This is the tragedy of open access.
Thinking about property rights and exclusion costs sheds some light on this conundrum. One fundamental determinant of whether or not we treat a resource as a commons is the cost of defining and enforcing property rights. Another way to put this: what is the cost of excluding non-authorized users? If you can exclude, then you can avoid the tragedy of open access. We do this, through commercial services like T-Mobile, Wayport, and other subscription services. And for people installing wireless networks in our homes, we can exclude via password protection. Thus even though the underlyhing legal treatment of 802.11 is a commons, low costs of exclusion enable us to manage it in such a way to avoid the tragedy of open access while still using the resource productively.
I noticed an interesting twist on the exclusion cost point yesterday at O’Hare. Many frequent travelers have memberships in clubs, like American’s Admiral’s Club. One benefit of the Admiral’s Club is that they provide a T-Mobile Hot Spot for their members. When the airport is crowdes (particularly on days like yesterday with bad weather), you routinely see people siktting on the hall floor outside of the Admiral’s Club, poaching the T-Mobile Hot Spot. They’re not Admiral’s Club members, but they have T-Mobile subscriptions. The cost to American Airlines of excluding people from using it is too high to be worth it (by, say, blocking the signal at the wall, which is expensive). Generally there aren’t enough poachers to create enough congestion to degrade service to Admiral’s Club members. In other words, the hallway poaching is an irrelevant externality. Even without being able either to charge the poachers or to exclude them fully, American Airlines still finds it profitable to provide the T-Mobile Hot Spot.
Much of the discussion of spectrum as a commons treats it as an either-or: etiher commons or pure private property rights. Such a treatment is too simplistic. Low exclusion costs mean we can manage the 802.11 commons to avoid the tragedy of open access, while still enabling us to contruct wireless networks within the commons.