RIETI Report September 2002

Toward Free Spectrum Management <RIETI Featured Fellow> IKEDA Nobuo

This month's featured article

Toward Free Spectrum Management <RIETI Featured Fellow> IKEDA Nobuo

IKEDA Nobuo Fellow, RIETI

Greetings from RIETI

Japan is still as hot as a tropical island, even though it is already September. Nevertheless, we resumed ordinary research activities, including our BBL seminars. Speaking of hot, the topic of electromagnetic spectrum management has heated up in Japan. Does it matter? Yes, it does. It is about mobile phone you use everyday. And it has big implications for the information technology industry. In this regard, RIETI Report features our senior fellow Nobuo Ikeda, who is an expert of economic analysis of IT industries.

RIETI FELLOW NOW

IKEDA Nobuo
Mr. Ikeda has been a senior fellow at RIETI since April 2001. After receiving a B.A. in Economics from University of Tokyo, he worked for NHK (Japan Broadcasting Corporation) as a TV director (1978-93). After receiving his M.A. degree from Graduate School of Media and Governance, Keio University, he served as an associate professor at GLOCOM. He served on World Wide Web Consortium Advisory Committee in 1999, and served as a professor at GLOCOM in 2000-01. His expertise is economic analysis of information industries and media convergence.

For his discussion paper on "The Spectrum as Commons", click here
For his column, "Will 2002 be the Year for Japan's IT Industry to Play "Leap Frog?"
Click here

Selected publications:
"Is IPv6 Necessary?" (RIETI discussion paper, Japanese language only)
"Beyond the Internet"

"Architectural Changes in the Information and Communication Industries"

More than 70 million people are using mobile phones in Japan today.
Electromagnetic spectrums, or radio waves, are what serve as vehicles in transmitting signals so as to establish communication between mobile phones. It is said, however, that these spectrums are not being used efficiently. What does this mean? Wireless communication has now come to realize data transmission speed comparable to that of optical fiber network. But the rapid expansion of wireless communication has been causing a shortage of bandwidth allocated for such communication, posing a major obstacle in further expanding broadband communications. This was not a problem in the past when bandwidths were used only in limited ways. Today, however, the state of spectrum management in Japan is tantamount to building a high-rise building in the deep in the mountains while an empty plot of well more than 30,000 sq. m. is left unused in the middle of Tokyo, metaphorically speaking. Ikeda says Japan's socialistic spectrum management must be changed.

The United States is considering a reform that would designate spectrum bandwidths as a private property that is freely tradable. The idea, however, is not compatible with the wireless local area network (LAN) technology that enables users to share the same bandwidth, Ikeda says. In the European Union, radio frequencies for the third-generation (3G) mobile phones were auctioned. The result, however, was far from being successful with licensing fees set at a level way beyond the break-even point. Auctions, despite their seemingly fair appearance, would bid up licensing fees, resulting in unreasonably heavy burden on telecommunication companies. The British and French governments are now considering the infusion of public funds to revamp financially-troubled telecommunication companies.

Consumers, for their part, would most likely stick with the current (second-generation) model of mobile phones if they were to pay exorbitant extra costs for the 3G model. Should this be the case, 3G phones would never become wide-spread. Ikeda says the spectrum should not be regarded as a private property. Instead, he says, the government should designate them as an open-access commons that anyone can use without license just as a wireless LAN is.

Ikeda also calls for international cooperation to reform the current global framework for regulating the use of radio waves that has been set by the International Telecommunication Union. We hope that people take interest in this issue, which has significant implications for the global information technology industry.

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