Obama's Unbelievable But True Wireless Plans
|Wednesday, 24 December 2008 03:25|
Doubling available spectrum is practical and top of agenda for Obama's tech people. Changes considered "unthinkable" by most of D.C. actually will be accepted as obvious common sense soon. Giving a particular use exclusive control creates a monopoly, justified because there was no alternative. Technology has changed. Monopolies can mostly be thrown away, with some sensible rules of the road enforced by today's chips. They want to raise U.S. policy once again to the most advanced in the world, and getting rid of most wireless limits is pretty much agreed. They are busy right now trying to head off the tens of billions in waste and ripoff in the current stimulus plans, possibly a hopeless struggle but worth the effort. The goal is to "create" as much spectrum as practical, taking advantage of improved technology and leadership that understands the issues.
Decisions will probably wait until after the team is in place and organized, but here are some ideas under discussion:
1) 95% of spectrum is typically unused at any given time and location. There is no spectrum shortage today, if only obsolete practices where eliminated. I learned this from Dave Farber, who a decade ago was "testing the air" and showing everyone that there was no signal in most bands, even in major cities. This is what deregulation should be about: getting bad rules out of the way, such as unnecessary restrictions on what can be done with wireless connections. In the last seven years, evidence spectrum can be used much more intensively has convinced the FCC Technical Advisory Committee and nearly every expert not in the sway of D.C. lobbyists.
2) The first solution: sharing spectrum to get maximum use. In the 1930's, when the rules were laid out for radio, receivers were primitive, interference rejection almost non-existent, transmitters couldn't be precisely tuned, and the technology to share spectrum not even a dream. In the last decade, a billion cell phone users have conclusively demonstrated sharing is possible; almost all wireless networks massively reuse the same frequency. WiFi is a second demonstration, with hundreds od millions using "unlicensed" spectrum fairly effectively. Not all the problems are solved, but ir works and the benefits are far greater than the (relatively few) problems that arise. Most can be controlled by setting strict parameters for what chips are allowed, rather than active (and generally feeble) enforcement. Very few chips get into widespread use, so it's practical to test each rigorous for effectively avoiding serious interference. I'm writing this on a Mac over WiFi; problems are very few.
Kevin Werbach, on the Obama FCC transition team, has been proselytizing about the potential since 2001, crediting work last century by Columbia's Eli Noam.
3) Cell phones and other transmitters are now capable of testing a possible frequency and (reasonably accurately) determining whether it's in use. If it's in use, they try a different frequency. This is called "cognitive radio," "spectrum sensing," "software defined radio"and various other geeky names. Basically, it's about finding whatever is available and putting it to use. This should effectively make twice as much spectrum available, possibly even five times as much. (Article to come: Getting out of the way: How Cognitive Radio Changes the Game.)
4) The first rule changes from "absolutely no interference" to "minimal harm." The first regulatory breakthrough was "ultra wideband," which was supported by Mike Powell and Robert Pepper at the FCC. Low power transceivers can use up to 500 megahertz of spectrum, effectively carrying several hundred megabits from a controller to an HD TV, etc. As a practical matter, there's minimal interference on the (much higher power) primary signal. Similarly, TV and radio receivers today can reject low levels of interference, allowing closer allocation of TV transmitters, etc. Instead of saying "No interference is allowed, ever," sharing is allowed if it doesn't create major problems for others.
Rural areas will be particularly aided, because they have more spectrum "allocated" but not actually used. In more than half the state of Vermont's land area, at least four wireless carriers control the spectrum but aren't using it. That's a great opportunity for some local entrenpreneur to provide service where Verizon and AT&T just aren't interested.
5) The second rule may be "use it or lose it," common in many other countries. France has threatened to cancel Iliad's license if Xavier Neil doesn't rapidly build the promised 3.5 megahertz WiMax network promised; several third and fourth 3G licenses have been reclaimed because the networks weren't built, with the hope the spectrum can be offered to a company which will build. I have a friend with 700 MHz spectrum across an entire state who hasn't done anything with it for almost a decade. It has mountainous terrain with low population density, and he couldn't see a profitable way to compete with Verizon and AT&T's offerings in the major cities. Verizon bought the "C" block across the U.S. in the 2007 aucion, although it doesn't need the spectrum for years. The consensus was they spent $4.5B primarily to keep out a possible competitor.
"Use it or lose it" is also particularly potent in rural areas, where carriers have done less buildout.
6) Require full deployment for ten year license renewals. After ten years to recover the original investment, it's perfectly reasonablw to expect continued investment in the second ten years. Most U.S. spectrum licenses sold make clear the FCC has the absolute authority to set terms for the renewal license. The bidding documents not only make that clear, they even provide details on the process the FCC must use for public comment on the changed rules, etc.
This is by far the best way to get better coverage in rural areas and higher speeds everywhere, because it costs the taxpayer absolutely nothing. Most of the spectrum was given for free but now is valued in the billions, about $50B worth on the balance sheet of the Bells. Verizon would be have to be stupid not to accept whatever renewal terms are set. They aren't stupid. In this way, over 5-8 years the country can receive any reasonable deployment level or speed/quality desired, without stimulus or any other spending. (Note the term reasonable. It is right for the commission to require buildout, and they shouldn't demand unrealistic goals.)
7) Increase competition by limiting the access of incumbents to any new spectrum. Canada reserved half the recently concluded auction spectrum for new entrants, and will likely see two or three new competitors that way. They broke records in what they received. Even if keeping out incumbents results in lower totals (unproven and probably unlikely,) consumers will more than make up the difference in lower prices.
8) Increase competition by reducing all costs involved in a wireless network. India requires any wireless company building a tower to share it with 3 competitors (in some regions.) This results in two or three companies competing for customers. Similarly, the backhaul costs from the tower can be brought down by sensible rules on pricing. Japan's broadband competition is possibly the most competitive in the world, with prices/speeds much better than the U.S. Requiring the incumbent to provide fiber backhaul at a fair price was crucial. Verizon and AT&T control over 70% of the backhaul in the U.S., giving them a crucial advantage over everyone else, especially as speeds increase and more backhaul is required. (An interim step would be to eliminate the "cell tower exclusion" and make copper pairs available at standard rates.)
9) Increase effecive spectrum by requiring more efficient use of existing spectrum. It;s a cliche that "you can't manufacture more spectrum," but a total fallacy. 3G technologies use half the bandwidth for each voice call, meaning AT&T could double the voice capacity on exsting spectrum by moving everyone to 3G in the next few years. Europe is actively putting this to work, calling it re-farming. Another way to reduce spectrum required is building more cell sites. Sharing tower costs (directly or through an independent tower company) makes that cheaper. So would eliminating the typical 800% markup on T-1 backhaul, as above. Techniques like that allow the incumbents to meet their needs without needing more spectrum, freeing spectrum for other uses.