Where does the Govt get 3G or spectrum in general?

“What is 3G?”  and “What does allocation of spectrum for telcos really mean?” are visited very often on my blog. I wrote them because I did not understand them well enough (may be even now!).  Early in Jan, I received a feedback from a reader (Shuvam Sinha),

Hi Mahesh, Very nice article on 3G. I am a research analyst in stock market. I want to know what is the source of 3G or for that matter spectrum? Like, we all know that Govt. auctions spectrum but where from Govt. gets it and all?  Thank you.

The question is very fundamental but I wasn’t able to find the answer that easily. I had a general idea but not a concrete solution. I reached out to my friend Sudhama who gave me a crisp explanation of this issue. I have edited it and reproduced most of his thoughts.

I think the person’s question may be very fundamental – how can the government “sell” spectrum? Is it a sellable quantity and how did they “get” it in the first place?

Possible response: “Spectrum” is the collective term for frequencies of electromagnetic waves which can carry sound or data signals. It can be thought of as a group of roads or highways that have already been built (by mother-nature) and the government is merely regulating traffic and assigning certain roads for certain purposes.

The roads or “channels” can be purchased by businesses that offer telephone/data services, and government regulations ensure that no one encroaches on someone’s paid channel.

3G networks operate at higher frequencies, so that they may carry more data – they can be thought of as highways that can carry a lot more traffic than country-roads. Because they are at higher frequencies, their electromagnetic wavelength is lower. (For geeks: This happens because the product of frequency and wavelength is a constant, the speed of light). As a result, they travel only by “line-of-sight”, as opposed to medium-wave and short-wave AM signals,  which have the ability to propagate around the curvature of the earth. Because 3G signals are line-of-sight only, they cannot travel very far, and the same highway can be used in different parts of the world by local 3G networks without mutual-interference.

The “line-of-sight” tries to explain that spectrum ownership for 3G ends when the signal hits the mountain. Airtel India doesn’t have ownership of the band in all of India, let alone across national borders, that’s what “roaming” is all about – one automatically switches from one carrier to another, when crossing a cell-boundary or some other kind of boundary. So a national boundary is no different – there are presumably service providers in Nepal who will pick up the transmission/receiving when someone crosses the boundary.