Monday, December 17, 2012

The Need for a Balanced U.S. Spectrum Policy between Licensed and Unlicensed Uses

The future of US competition in mobile broadband innovation hangs in the balance with upcoming rulemakings on spectrum auctions that were authorized as part of the Middle Class Tax Relief and Job Creation Act of 2012 to help fund tax cuts, as well a proposal to open a portion of federal spectrum for broader use through spectrum-sharing arrangements.

The spectrum policy debate is between the balanced allocation of licensed vs. unlicensed spectrum. The economic value of unlicensed spectrum already results in between $16-37 billion in annual economic value. And according the FCC, it also increases the value of wired broadband services by $25 billion per year and reduces the cost of delivering wireless broadband service by $25 billion per year through Wi-Fi offload mechanisms by carriers. Unlicensed spectrum is also helping spur innovation in other markets. For example, Wi-Fi plays a critical role in fostering the mobile apps economy, currently a $10 billion market that is projected to be a $46 billion market by 2016. Unlicensed spectrum is also the key enabler for machine-to-machine (M2M) networks that could prove to be a $1.4 trillion market by 2020. Add all of this up, and couple it with the huge growth in the Wi-Fi market and the impending congestion in the 5 GHz unlicensed frequency bands with the adoption of 802.11ac that utilizes 80 MHz and 160 MHz wide channels, and a compelling case for more unlicensed spectrum can be made.

Three proposals exist to increase unlicensed spectrum in the U.S.:
  1. Two additional 5 GHz bands for unlicensed use: 5350-5470 MHz and 5850-5925 MHz. (195 MHz total).
  2. Spectrum-sharing in the 3550-3650 MHz federal use band. (100 MHz total).
  3. Guard bands in the 600 MHz TV block under auction. (12-20 MHz total).
For comparison, the existing 2.4 GHz ISM, 5 GHz U-NII and 5 GHz ISM bands amount to a total of 663.5 MHz available for unlicensed use.

First, the Middle Class Tax Relief and Job Creation Act of 2012 requires modification of part 15 of title 47 in the Code of Federal Regulations (CFR) to explore unlicensed use in the 5350-5470 MHz band for indoor use. This band is currently used by the federal government for radiolocation services (RLS), and unlicensed use would be subject to non-interference requirements such as Dynamic Frequency Selection (DFS). This would add 120 MHz of unlicensed spectrum between existing UNII-2 and UNII-2 Extended bands. The proceedings to modify the CFR must begin by Feb. 22, 2013 (1 year after the bill was passed into law).

This legislation also stipulates that a study should be conducted to evaluate spectrum-sharing technologies and the risk to Federal users if unlicensed U–NII devices were allowed to operate in the aforementioned 5350–5470 MHz band and also in the 5850–5925 MHz band. The 5850-5925 MHz band is currently used for Intelligent Transportation Systems (ITS) by the transportation industry, which envisioned using dedicated short-range communication protocols to communicate between vehicles and roadway infrastructure. These networks have not been deployed. Freeing up this second 5 GHz band could free another 75 MHz of spectrum for unlicensed use.

Second, the FCC is proposing a shared spectrum plan for the 3550-3650 MHz band which will enable innovative small-cell use of this 100 MHz block of spectrum. This band is currently used for military and satellite operations, and the NTIA Fast Track report has identified "exclusion zones" to prevent interference with offshore shipborne radar systems. The proposal would "spur significant innovation in wireless technologies and applications throughout the economy, while protecting incumbent users in the band" through a tiered-use structure: 1. Incumbent Access (federal), 2. Priority Access (critical services in select defined location), and 3. General Authorized Access (public use). The FCC proposal follows the recommendations of the President’s Council of Advisors on Science and Technology (PCAST) to spur economic growth through government held spectrum. You can read the full FCC Notice of Proposed Rulemaking on 'Enabling Innovative Small Cell Use in 3.5GHz Band NPRM and Order' on their website.

Comments by Chairman Genachowski highlight the importance of this proposal:
"We have moved forward on a next generation of unlicensed spectrum use, building on the concept that gave us Wi-Fi.  And we are on track to meet our target of freeing up 300 MHz of spectrum by 2015.
Today's action is a major step toward unleashing an additional 100 megahertz of spectrum for broadband use.  
It is also progress on major innovations in spectrum policy and technology.  This is important because, to achieve our ambitious spectrum goals, we must continue look beyond traditional approaches and supplement them with new ways to unleash the airwaves for broadband.  Spectrum is a scarce asset with transformative power – power to drive private investment, innovation, and economic growth; strengthen our global competitiveness; and provide broad opportunity to all Americans."

3550-3650 MHz NTIA Exclusion Zones

Third, use of guard bands in the TV white space auction could create an additional 12-20 MHz of unlicensed spectrum available for 'Super Wi-Fi'. The TV white space auction of spectrum in the 600 MHz band is under debate in the House of Representatives. The auction will bring in revenue for the federal government to help pay for the approved tax cuts. However, the FCC TV auction details propose the use of two 6-10 MHz guard bands of the spectrum (12-20 MHz total) for unlicensed use to stimulate economic growth through competition and innovation (this is in addition to the previous work on unlicensed use of TV white spaces in the UHF band occupied in various markets by DTV channels). I have not seen an estimate of the amount of lost revenue that would result from the allocation of these guard bands for unlicensed use, but the estimated revenue from an auction is around $19 billion. Up to $7 billion of this auction revenue is earmarked to help build a nationwide public safety network for first-responders. You can read the full FCC Notice of Proposed Rulemaking on 'Broadcast Television Spectrum Incentive Auction NPRM' on their website.

FCC 600 MHz Band Plan Proposal

On December 12th, the U.S. House Energy and Commerce Subcommittee on Communications and Technology held a hearing on Keeping the New Broadband Spectrum Policy on Track.

Here are a few of my thoughts on the discussion that took place during the hearing:
  1. These U.S. incentive spectrum auctions are historic. I applaud our government in recognizing the need for re-purposing spectrum to maximize efficient use and help our nation remain competitive in this global economy. At the same time, our nation is looking at new ways of using spectrum through shared-spectrum approaches and striking a balance between licensed and unlicensed uses.
  2. It is not clear if the auctions will actually yield net revenues to fund a national public safety broadband network. The auctions involve three components: 1) a reverse auction to pay current spectrum owners in the 600 MHz TV band to vacate, 2) a re-packing of the band to facilitate more efficient spectrum use and enhance the value, and 3) a forward auction to sell the re-packed spectrum for licensed use for mobile broadband networks. The Spectrum Act only stipulates that the forward auction must cover costs of the reverse auction. The structure of the auction proceedings will influence these revenues. The value of the 600 MHz spectrum itself could be worth $1 - $2 per MHzPop (or roughly $7-16 billion) based on the previous 700 MHz auctions conducted in 2008.
  3. "Unlicensed spectrum is an extraordinary platform for innovation" - Chairman Genachowski
  4. Spectrum guard bands would serve two purposes: 1) protecting the adjacent licensed use frequency bands from interference, and 2) enhancing the spectrum band value by allowing the use of unlicensed services for new innovations, such as 'Super Wi-Fi'. This use of guard bands for unlicensed use has never been done before, and was already authorized under the Spectrum Act.
  5. Positions are split down party lines, with the Republicans advocating for smaller guard bands providing slightly more licensed spectrum available for auction while the Democrats are backing slightly larger guard bands that provide for unlicensed uses.
  6. There is concern about "maximizing proceeds" from the auction to help fund the public safety broadband network. I agree, a public safety network is important. But as congresswoman Eshoo points out, the FCC is prohibited from basing auctions predominantly on revenue generated. Furthermore, it is unclear just how much auction revenue would be lost due to larger sized unlicensed guard bands. I urge congressman Walden and other subcommittee members to complete a thorough analysis of the value of these guard bands with respect to the remaining licensed frequency, provide specific details on the expected revenue that would be lost, and the impact of this lost revenue on the funding for a public safety broadband network. This must be balanced with the proposed economic value that larger unlicensed guard bands could provide.
  7. The current legislation language focuses on minimizing guard bands "no larger than is technically reasonable to prevent harmful interference between licensed services outside the guard bands." Given the traditional nature of guard bands this makes sense. However, this new proposal for unlicensed use of guard bands represents a completely different use for that spectrum which can provide additional economic value. I would urge the FCC and subcommittee to re-evaluate the language of this legislation to properly focus on adequate guard band size given these new use-cases.
  8. If we don't move forward on growing unlicensed spectrum, we run the risk losing competitive advantage and seeing innovations in mobile platforms happen overseas rather than in the U.S.
Here is the full video of the hearing (2:45 in length):

In addition, Public Knowledge and over 370 companies wrote the following letter to the subcommittee chair Greg Walden (R-OR), urging the subcommittee to allow the "FCC [to] pursue policies that strike a productive balance between the need for more spectrum that accommodates both exclusive-use licensed and non-exclusive unlicensed technologies."

Undoubtedly, the myth of the cellular spectrum crunch is also playing a factor in this debate, especially when cellular carriers seem more intent to squat on existing unused spectrum while playing land-grab for more spectrum in an effort to reduce competition in the market and simultaneously pursuing a fairly aggressive plan for small-cell deployment coupled with Wi-Fi offload (ahem... unlicensed). Throw into the mix actual data figures that show mobile broadband data growth is strong, but nowhere near the numbers thrown around by lobbyists, and its clear that cellular providers have plenty of tools in their arsenal to meet growing demand without additional licensed spectrum.

Update Feb-2013: Several new reports have been released that continue to show that cellular data traffic is growing significantly slower than the industry would lead you to believe. This highlights the industry's deeply held desire to secure more spectrum for licensed use rather than freeing it up for unlicensed use. See these articles on the Cisco VNI Forecast for 2012 by GigaOm, BGR, and the Informa Whitepaper on smartphone data usage trends, and a study by Plum Consulting on Future-Proofing Wi-Fi with more spectrum (commissioned, ironically, by Cisco).

I urge you to support unlicensed spectrum as a more formal part of our nation's spectrum policy in the following ways:
  1. Leave comments on the FCC Notice of Proposed Rulemaking on 'Enabling Innovative Small Cell Use in 3.5GHz Band NPRM and Order' (Proceeding #12-354; deadline Feb. 20, 2013) and on 'Broadcast Television Spectrum Incentive Auction NPRM' (Proceeding #12-268; deadline Dec. 21, 2012). Comments can be left at the FCC Electronic Comment Filing System (ECFS). Simply search for the proceeding numbers that I have listed above.
  2. Write to both chairman Walden (R-OR) and your local Congressman and urge them to support a spectrum policy that more formally recognizes and includes unlicensed spectrum to support our economic growth, innovation, and global competitiveness as a nation. Include a copy of the Public Knowledge letter to voice your opinion.
Andrew von Nagy

2012-12-18 - Updated the 5 GHz band provisions based on reader comments and the subsequent research.


  1. Andrew,

    Great post. As you know, I consider myself a champion of open spectrum as well.

    A few thoughts:

    -HR2482 actually identified two possible bands for UNII use, 5350-5470 MHz as you mentioned, but also 5850-5925 MHz. So a potential for 195 MHz there. Here's some more detail:

    "The spectrum legislation identifies two additional bands for possible unlicensed use. First, NTIA, the Department of Defense and other agencies will study spectrum-sharing and risks to incumbent Federal users if unlicensed U-NII devices were allowed to operate in the 5350-5470 MHz and 5850-5925 MHz bands -- total of 195 MHz of spectrum. The agencies will issue reports on their findings. The report for the 5350-5470 MHz band is due in eight months and the report on the the 5850-5925 MHz band is due in 18 months. Again, WISPA should be a part of this process." Feb 20th, 2012

    -The Wi-Fi Alliance is starting to play a more active role in these sorts of policy discussions. While they have to tread carefully, due to their composition as a cross-industry body representing many companies with different views, there is a heightened awareness in the WFA around this. Patrick Green is now the Senior Regulatory Affairs Manager for the WFA.

    -From my conversations with Patrick, it seems that the earliest we might expect any of this spectrum to be available for use would be 3-4 years from now (probably the HR2482 identified bands first).

    I applaud your efforts to raise awareness of this issue within the Wi-Fi community, and agree that we need more focus on the value of unlicensed spectrum. People need to realize that there is a large, well-financed lobbying effort supporting the allocation of more licensed spectrum. At some point it would be nice if there was some form of industry consortium championing unlicensed spectrum.

    The economic benefits are quite clear at this point, but there is no unified effort to raise the awareness of these benefits within the legislature and FCC.


    1. Thanks for your insights Dave. I have update the post to include the additional 5 GHz band referenced in the legislation.

      I agree, it is important that a groundswell of parties that value unlicensed spectrum take an active and vocal part in our legislative process. Thankfully, it appears that several of the FCC commissioners are champions of unlicensed spectrum and see the economic value it brings through innovation and competition - notably Chairman Genachowski. I also applaud congressman Waxman (D-CA) for admirably representing the interests of his constituents regarding these proceedings.


  2. One error: the CBO's estimate of the auction proceeds bundles government and TV band proceeds; it's not the estimated proceeds from the TV band, unlike what many members of Congress implied, has been widely reported in the media, and repeated here. This is the type of accounting game Congress routinely plays in such proceedings. My hunch is that the hidden detailed CBO calculations that were not publicly released show that the vast majority, if not all, of the estimated proceeds come from the proposed auction of government spectrum.