(Originally posted at http://www.von.com/blogs/guest/2009/12/spectrum-is-like-beachfront.aspx)
Plato is credited with having noted that, “Beauty is in the eye of the beholder.” This is certainly true in any discussion about spectrum. As with beachfront property, the thing about spectrum is that they’re not making any more of it. Recently, Blair Levin, who heads the FCC’s broadband program, acknowledged, “There’s not enough of it,” referring to spectrum. It was also noted that “several Tier I carriers are arguing for more licensed spectrum to keep pace with customers’ bandwidth demands, especially for mobile broadband.”
The FCC’s 700MHz auction raised $19.6 billion, with $16 billion coming from just 2 operators: Verizon and AT&T (National coverage maps). While I’m sure the FCC would love to run more multibillion-dollar spectrum auctions, is it really necessary to do so?
There are lots of moving parts in delivering a mobile broadband service, but it’s interesting to look at them holistically.
Different frequencies have very different propagation characteristics. It has been said that the best thing about 700MHz spectrum is its propagation characteristics. It has also been said that the worst thing about 700MHz spectrum is its propagation characteristics. It goes forever, has good in-building penetration, but these attributes present challenges from a frequency re-use perspective. Great for coverage. Not so great for capacity.
Conversely, the propagation characteristics in the 2GHz and 5GHz ranges are very different. These have limited range and poor in-building penetration, but these attributes are advantageous from a frequency re-use perspective. Poor for wide-area coverage. Great for capacity.
With the explosion in mobile broadband, the question today is whether the delivery of wireless broadband is a coverage play or a capacity play? And if capacity, what does the network look like?
Cell size and capacity have an inverse relationship. Macrocells, by design, are built to cover wide areas. However, the radios, spectrum and backhaul are all shared elements. The more users you have within a cell competing for these resources, the lower the throughput to each user. To increase capacity over an area, mobile operators pack in more, smaller cells (micro and picocells, and at the extreme low end of the spectrum, femtocells are being contemplated).
Andy Germano, vice chairman of the Femto Forum, said it very well recently when referring to the deployment of 4G networks: “Rather than go from big to small, they can go from small to big,” referring to cellular topology.
We know that, even today, it is challenging to keep up with the data capacity demands being driven by smart phones and other mobile devices. This is due to three factors: user demand for bandwidth, spectrum availability and cellular topology.
AT&T has been at the forefront of addressing the issue of adding data capacity to deliver a superior user experience for its iPhone subscribers by embracing Wi-Fi and unlicensed spectrum. Recently, at SUPERCOMM, John Stankey, president and CEO of AT&T Operations, stated:
“I don’t think a single macro wireless network is sustainable over time, given the pace of spectrum availability and what’s actually out there in terms of fixed spectrum. I think the reality is that there will be macro and micro networks. We’re starting down that path at AT&T, focusing on how we make Wi-Fi and licensed spectrum a more seamless experience for customers.”
So back to the beach.
There’s 80MHz of free, unlicensed spectrum, at 2.4GHz, being used today to augment data capacity by a leading licensed spectrum owner. Very interesting, but it’s still a small and pretty crowded stretch of beach. However, there’s 450MHz of spectrum, in the 5GHz bands, that is a beautiful stretch of beach – much less crowded, and ideal for small cells and frequency re-use, i.e. high-capacity locations.
Great stretch of beach, but how do I get there from here? Wi-Fi (802.11b/g) supports 2.4GHz and there are no 802.11a devices. The answer is 802.11n. Devices, such as the new Apple iPod Touch, are shipping with chipsets that support .11n and both frequency bands. Although the 5GHz radios are currently disabled, it is not unreasonable to expect that any upcoming versions of the iPhone, and other Wi-Fi enabled devices, will offer dual-band capabilities.
So, we will see 4G services rolled out at 700MHz, which will bring LTE to a big chunk of the country. But instead of waiting years (and paying billions) for more licensed spectrum to add capacity, I would say to Mr. Levin, “There’s a beautiful stretch of public beach up at this end, just waiting to be used.”
That’s my .02!
Martin Suter is vice president of business development at BelAir Networks, the global market share leader in service provider Wi-Fi, enabling 3G data offload for wireless carriers, quad-play for cable operators, and managed WLAN business services. Previously, Martin was the CEO at Cohda Wireless, where he raised the company’s profile and negotiated a licensing deal with a Fortune 100 vendor in its core franchise. Prior to Cohda, he was vice president of business development at MeshNetworks Inc., a classic tech transfer/disruptive technology success story that achieved a major liquidity event for its investors in Q4/2004 with its acquisition by Motorola. Martin also was responsible for building several high profile alliances with and for leading technology companies, including Fujitsu, Microsoft, Netscape, Sun Microsystems, and Teradata. Additionally, Martin has successfully negotiated technology transfer, distribution and/or licensing deals with companies like 3Com, BioChem Pharma, Dow Chemical, Exodus, Fujitsu, IBM, Microsoft, Motorola, Netscape and Sun.