Licensed vs. Unlicensed Spectrum:The Operator’s Dilemma

The licensing of radio spectrum has been in effect since the very dawn of commercial radio in
the early 1920s, and the underlying notions informing such licensing are threefold. First, it
sequesters generous allocations of spectrum for purely governmental use. Second, it further
serves the government by deriving abundant revenues from the licensing process. And third, it
prevents commercial users from interfering with one another by restricting each to a specific
portion of the band.
Such considerations still exist today, though, at least in the United States, the second has
assumed paramount importance.
Assuming that you can afford to pay for the license, licensed spectrum would appear to be
a better medium in which to operate. The spectrum itself is a tangible asset with a real financial
value, and the exclusivity of use provisions would seem to be a positive protection from interference.
The issue is not so simple as appearances suggest, however, as the following sections
illustrate.