U.S. Licensed and Unlicensed Use of White Spaces Hangs in the Balance

As the U.S. Federal Communications Commission prepares rules for repurposing some broadcast TV spectrum (TV white spaces) no longer used, one key issue is the method of licensing. 

Some believe the best way to commercialize the TV white spaces spectrum is to auction most of the frequencies. Others believe it is vital to preserve significant amounts of that white spaces spectrum for unlicensed use, using the prior example of Wi-Fi as an example of innovation that should arise.

As always, there are huge commercial implications. As always, major users of licensed spectrum will prefer a licensing method. As always, many others think the greatest amount of innovation will occur if an unlicensed model is used.

Given the huge commercial implications, many believe only portions of the spectrum actually will be available on an unlicensed basis. 

There are valid arguments for both points of view (licensed versus unlicensed access). A licensed approach will help mobile service providers; an unlicensed approach will help all sorts of innovators and entrepreneurs, with mostly indirect economic benefit, as with Wi-Fi.

Some think the best outcome would be a mix of licensing, with significant amounts available on an unlicensed basis. 

Since most broadcast TV spectrum tends to be used in bigger markets, the amount of available white spaces spectrum will be most limited in dense urban areas, and most abundant in rural areas where there are fewer people.

So one key issue is how much usable spectrum might be available on a nationwide basis, consistently enough to provide incentives for services, devices and apps to be created that are usable everywhere. 

Innovation without permission is how some would describe the advantages of unlicensed approaches to use of spectrum. 

Some might say it is clear both mobile services based on licensed spectrum, and Wi-Fi style services, apps and devices based on unlicensed spectrum are complementary and strategic ways to clear and commercialize new frequencies. 

About 66% of Mobile Data is Offloaded to Wi-Fi

By 2016, perhaps 80 percent of all mobile device data consumption might happen over some offloaded network mechanism, according to Wik Consult. 

In 2013, offloaded mobile data might represent nearly 66 percent of all data consumed by a mobile device.

What those sorts of statistics indicate is that service providers whose business models are based on use of licensed spectrum now also are relying on third party facilities, and unlicensed spectrum as a rather integral part of their own branded services.

Some might say that further indicates the role of shared or unlicensed spectrum could be increased without necessarily harming the interests of licensed service providers, though the way shared or unlicensed spectrum is used could result in new forms of access competition.

"Multiple sources indicate that as much as 80 percent to 90 percent of Android smart phone and tablet mobile traffic is already being off-loaded to private Wi-Fi, within the end-user’s home," the authors of a study on mobile traffic offload say. "Particularly noteworthy is a new study by Informa and Mobidia that finds that at least two-thirds of mobile data for Android phones is already being off-loaded to “self-provisioned” Wi-Fi, which equates roughly to private Wi-Fi."

The report suggests that service providers gain when users offload traffic because they do not have to invest so much in network facilities. The authors estimate such savings in 2012 for the EU-27 nations to be as high as 35 billion euro, and the projected savings in 2016 as high as 200 billion euro.

“Based on our current assessment, drawing on all of these sources and others, we now believe that a majority of traffic that would otherwise be present on the macro cellular traffic is already being off-loaded, primarily to Wi-Fi in the home,” says Wik Consult.

The report does not recommend much new effort to free up additional unlicensed spectrum, beyond coordinating Wi-Fi spectrum across national borders. The report is more unambiguous about the need for additional licensed spectrum, calling for "more spectrum to be made available, either on an exclusive or a shared basis."

The report also suggests that mobile networks will have a role to play in at least two, or possibly all of the Digital Agenda for Europe goals.Those include, by 2013, supplying basic broadband to all Europeans; by 2020, supply speeds of 30 Mbps and by 2020, supplying half or more European households with services faster than 100 Mbps.

It is currently unclear what the relative impact of licensed and licence-exempt small cell technologies will be over the longer term, since the former is in its infancy; however, there appears to be a broad consensus in the industry currently that the two will largely complement rather than compete with each other.

Feedback from wireless network operators indicates that licensed and license-exempt spectrum are seen more as complements to one another rather than substitutes.

As always, licensed spectrum is preferred by tier one service providers because they can better control quality of service.

FCC Says It Will Not "Automatically" Allow Verizon to Substitute Mobile Service for Fixed

In the wake of Hurricane Sandy, Verizon has had to decide how to restore service to some affected areas that previously had fixed network service, but would be quite expensive to rebuild that same way, compared to use of Long Term Evolution network service, for example. 

The issue is whether, when a carrier has a universal service obligation, it has at least some ability to fulfill that obligation using an access network that matches the required service and application profiles, but uses a network access technology that is suited to the circumstances.

As any network economist will attest, in hard to serve areas, such as those with low density, mobile and fixed wireless or satellite networks can be built faster, and operated at lower cost, than a fixed and wired network. 

The issue is whether such obvious facts of network economics are allowable, especially at a time when the economics of wired access networks are declining. 

The Federal Communications Commission now says it will not "automatically" grant the request by Verizon to do so. 

The issue is whether mobile service can be a substitute for a fixed line service. 

Telekom Austria Wants to Buy Serbia Broadband

Telekom Austria wants to buy cable operator Serbia Broadband, a deal that might cost as much as  1 billion euros ($1.3 billion), and illustrates a number of key trends in the European telecom market.

As now is clear in virtually every developed telecom market, organic growth, when it can be obtained, is very difficult. That always makes rational a search for growth by acquisition. 

Such acquisitions also often tend to make more sense "out of region" than in domestic markets.

Also, it also sometimes makes sense to diversify into complementary or other strategic assets, as in this case where a telco (fixed and mobile) wants to buy into a cable TV broadband asset. 

Telekom Austria owns mobile operations in Serbia,Croatia and Slovenia and is looking to add fixed-line assets in the region as well. 

What is noteworthy, at least in part, is the choice of a cable TV asset rather than a "telco" asset. That is at least partly a recognition that a cable TV network is, by definition, a broadband access network. 

NSA Spying: How Can We Trust Anything You Now Say?

In the wake of newly revealed scandals about the extent of National Security Agency spying, a reasonable person would be permitted to say he or she no longer believes, or trusts, the NSA or the executive and legislative or judicial branches of government that supposedly police such spying. 

"The three pillars of American trust have fallen," the Electronic Frontier Foundation says. "It's time to get a full reckoning and build a new house from the wreckage, but it has to start with some honesty."

A government that loses the trust of its people is in trouble.

Is Square "Western Union?"

Square, the mobile payment service, has been fined  $507,000 by Florida’s Office of Financial Regulation for operating a payment service without a money transmission license.

In other words, Square is being regulated like an entity used to send funds from one person to another, such as Western Union. Some of us think that is crazy. Square is a retailer cash register. 

But never underestimate the abiliy of an increasingly-overweight administrative state, and its legions of bureaucrats, to come up with new ways to control the lives of its citizens and impose new taxes (oh right, those are just "fees," not taxes) by fiat. 

Square is not a money transfer service, such as Western Union. It is a cash register. 

TOT Delays 3G Expansion in Thailand

TOT, the Thailand-based mobile service provider, has delayed plans for an expansion of its third generation network, because of funding concerns.

TOT’s 3G network includes 4800 base stations. The proposed THB30 billion network expansion would have added 15,000 more base stations.

But the Thai government, whose approval is required, wants TOT to spend THB38 billion. 

TOT also has announced plans to expand its Wi-Fi network to 150,000 hotspots by the end of 2014, as part of the ICT ministry-backed Smart Thailand program.

TOT already has deployed 10,000 Wi-Fi hotspots while a total of 120,000 hotspots have been deployed by other agencies as part of the initiative. 

Some 20,000 TOT hotspots are planned for Bangkok, with another 130,000 to be deployed nationwide.