In the constant quest for new wireless broadband spectrum, the US government has been particularly active in encouraging spectrum sharing and other approaches which may, in time, dilute the influence of the traditional auction process on the economics and processes of the cellular industry. That could, in turn, potentially reduce barriers to entry into the 4G market, and accelerate broadband expansion. In some countries, auctions have never been a key tool, with beauty contests or government allocations being used instead, but in others, regulators are only just starting to consider attacking the sacred cow.
US president Obama has signed a White House memorandum that orders federal agencies to use their spectrum more efficiently and open up to sharing with cellcos. The memo builds on many government efforts over the past year to boost sharing between federal agencies and commercial carriers and to transfer more spectrum to commercial use.
The White House also said it would pledge $100m in R&D funding to advance those goals. By September, the National Science Foundation will hand out $23m in spectrum sharing R&D grants and the Defense Department’s DARPA agency will announce the first of a planned $60m in contracts for federal spectrum sharing efforts over the next five years. Additionally, two government technology bodies, the NTIA and NIST, will distribute $17.5m for advanced research in spectrum and communications.
Last July, the US administration showed its hand on federal sharing when the president’s Council of Advisors on Policy and Technology called on the Commerce Department immediately to identify 1,000MHz of spectrum that could be opened up for new wireless uses. It recommended that these airwaves should be the foundation of the ‘first shared-use spectrum superhighways’. The NTIA has already identified 95MHz of federal frequencies in the 1755-1850MHz band, which could be repurposed for commercial wireless use.
Obama wants to accelerate these efforts and is ordering agencies to put efficient spectrum use and sharing at the heart of their agenda. “Where technically and economically feasible, sharing can and should be used to enhance efficiency among all users and expedite commercial access to additional spectrum bands, subject to adequate interference protection for federal users, especially users with national security, law enforcement, and safety-of -life responsibilities,” he wrote in the memo. “In order to meet growing federal spectrum requirements, we should also seek to eliminate restrictions on commercial carriers’ ability to negotiate sharing arrangements with agencies.”
He is establishing a spectrum policy team to monitor how the FCC and NTIA are encouraging sharing, with an order to complete a report within one year. Within six months that team will publish recommendations to the president on market-based or other approaches that could encourage agencies to share or release spectrum.
Meanwhile, many other interest groups see greater future in harnessing spectrum that is not in the hands of regulators or governments, including licence-exempt options such as the TV white spaces. This month saw the launch of the Dynamic Spectrum Alliance (DSA), which numbers 23 organizations advocating more efficient and effective spectrum management. Participants include early white spaces technology developers; major backers like Microsoft, which is supporting white spaces trials in Africa; BSkyB; government agencies from countries with particular interest in these technologies, such as Taiwan and South Africa; chipmakers like MediaTek; Wi-Fi players such as Ruckus; and IPR/standards players like Neul and InterDigital.
The DSA aims to ‘promote regulatory policies that will pave the way for innovative new wireless technologies that address growing wireless data and digital divide challenges’, harnessing otherwise underused spectrum. It will particularly focus on regulations to ease the path of white spaces networks in rural areas and ‘smart cities’ or M2M services.
Meanwhile, two major Asian countries, India and Thailand, are rethinking their approach to allocating new spectrum after disastrous recent experiences with auctions. Thailand’s regulator, the NBTC, is drafting a plan to engage the ITU as a consultant on how to sell 1.8GHz and 900MHz spectrum when the current licences expire. The ITU, rather than market forces, would then determine valuation of the frequencies and would recommend any spectrum caps. Although the consultation could cost about $800,000, it will help avoid the mistakes of Thailand’s recent 2.1GHz 3G auction, in which the NBTC decided to impose caps of 15MHz. This led to the sale generating revenues only 1.8% above the reserve price.
In India, the Department of Telecom is considering abandoning auctions when it reallocates the remaining spectrum freed up when 122 2G licences were cancelled in 2010 after a corruption scandal. This decision could set a precedent for future spectrum sales too, even the much anticipated 700MHz allocation for LTE. The DoT is considering other options for the 1.8GHz licences, such as allocation at a fixed price and beauty contest.
In auctioning the cancelled licences, the government succeeded in selling only 42% of the airwaves on offer and raising less than 25% of the revenue it had expected, while no carrier bid at all for the CDMA licences. In a second round, no operator applied for the GSM chunks, while only one contender emerged for the CDMA spectrum even after the reserve price was halved.