Updating Spectrum Policy
OCTOBER 3, 2011
By Tom Wheeler
The pressure on the existing spectrum allocated for commercial purposes is undeniable. A smartphone creates 24-times the data traffic as a feature phone and laptops create 22-times the data as a smartphone. The demands this kind of usage puts on the finite allocation of spectrum is obvious. That pressure is forecast to continue to grow. By 2015 Cisco projects global mobile data demand will be 26-times last year’s level!
President Obama has called for an additional 500MHz of spectrum to be reallocated to wireless purposes. Not surprisingly, those with current spectrum assignments are less than thrilled about the potential of its reassignment. Beyond reallocating spectrum, however, there is a bigger question before us: could a large part of the shortage be resolved by leaving behind the analog physics of the current allocation plan in favor of updated digital physics? In other words, is it the allocation rules built for an analog era that inhibits solutions to the current shortage?
Spectrum has always been allocated based on the physics of analog signals. Blocks of megahertz were allocated and then licenses were assigned within those allocations based on a single overriding purpose: to keep the signals from interfering with each other. Guard bands were often added to make doubly sure a signal licensed for one purpose didn’t interfere with a signal authorized for another purpose.
The spectrum allocation chart, as a result, is a rainbow of colors representing special purpose spectrum slices that are all “so 20th century.” Our spectrum policies are analogous to the old days when a unique circuit was required for every wired connection. Spectrum is allocated on the analog network model to come as close as possible to transmission perfection. Digital networks, in contrast, eschew perfection in favor of self-ordered chaos and from that chaos come greater capabilities and expanded capacity.
Exhibit A for 21st century spectrum planning is WiFi. Operating in unlicensed spectrum, WiFi is a cacophony of competing claims for use of the spectrum. The characteristics of Internet Protocol (IP) packets allow WiFi in a Starbucks hotspot, for instance, to operate more efficiently that the licensed spectrum on the sidewalk outside.
Because data packets are the disassembled pieces of an analog whole they can fit themselves into the nooks and crannies of available spectrum. A data packet containing a piece of email from one user sits right next to a packet of video from YouTube, which sits next to a packet of music from Pandora; each packet pushing its way on to the spectrum like a throng of commuters packing into a congested bus.
The legacy analog approach to spectrum allocation was to assure each user a comfortable seat on the bus where they didn’t bump into other passengers. As WiFi has demonstrated, the digital reality allows many more people to be loaded on the transport vehicle. It may not be as comfortable and orderly, but the bus is much more efficient than it would otherwise be. Outside a WiFi hotspot analog rules assure a comfortable spectrum seat. Inside the hotspot digital anarchy reigns with data packets contesting for carriage; yet the consumer seldom knows the difference.
Exhibit B for the end of analog spectrum policy is how wireless carriers have embraced the chaos of WiFi as a solution to their licensed spectrum capacity challenge. The idea of mobile operators offloading service to something they didn’t control was once heresy. Today, according to Cisco, over 30 percent of mobile operators’ data traffic is handled by WiFi digital chaos on a network the operators don’t own but which has increased their overall capacity and improved their consumers’ experiences.
It is time to abandon the concept of perfection in spectrum allocation. The rules for 21st century spectrum allocation need to evolve from the avoidance of interference to interference tolerance. We’ve seen this evolution in the wired network; it’s now time to bring the chaotic efficiency of Internet Protocol to wireless spectrum policy. What the FCC’s TAC is proposing is that we officially wean ourselves from the old wireline switched circuit world to embrace the reality of IP and its benefits. It’s time to start down the same road with spectrum allocation.
Such a reanalysis of spectrum policy should begin with government spectrum. By all means continue with the voluntary incentive auction of broadcast spectrum (if Congress will ever get on with it), but at the same time begin to innovate on government spectrum. The government as the single largest user of spectrum; there is ample opportunity for experimentation and innovation.
Historically communications innovation has started with government initiatives. The telegraph began with a government-sponsored trial, the railroad grew because of government incentives, digital packetization was developed on a government grant and ultimately implemented by the government to evolve into the Internet. Government has always led the path to new communications realities. Now is the time to continue that leadership legacy with spectrum.
Tom Wheeler is Managing Director of Core Capital Partners, a venture capital firm specializing in early stage companies, including next generation wireless services. For almost a dozen years prior to joining Core Capital he was the president of the Cellular Telecommunications & Internet Association.