Wednesday, December 9, 2009

Developments in Spectrum Sharing

New ways to share spectrum can revolutionise broadband in India

Shyam Ponappa / New Delhi December 3, 2009

As the Telecom Regulatory Authority of India (TRAI) deliberates on spectrum and licensing after the hearings ending December 2, some important points are worth highlighting. Spectrum is public property and, therefore, need not add a layer of cost (through auctions and such other artifices), provided it is available to network builders, and these networks are available to operators for their customers on payment. The question is whether the government should give spectrum free, or for an up-front price, i.e., a hefty spectrum fee, or through a progressive revenue-sharing arrangement as for telecommunications. This can be to network builders for their use, or to operators, to pool through either their own arrangements or through network builders-cum-operators.

One way to think about communications networks is to consider an analogy with road networks. The road network is accessed by paying road taxes and special tolls as required, e.g., when using a toll bridge or highway. The rest of the time, once a transport operator pays road taxes, the fleet’s vehicles have access to the entire public road network.

In the same way, it should be feasible for operators to access communications networks. These networks may be the operator’s own, or the public network, i.e., the Public Switched Telephone Network, paying as they go. In other words, whether operators use their own or others’ networks should be immaterial as long as they pay the tariffs, which result from a mesh of interconnection agreements. In this manner, network builders/service providers can use the spectrum as part of their “plant” for wireless transmission, just as they use optical fibre and copper wire for wire-line transmission.

Networks are already being built and operated by network builders-cum-operators. According to The Economist on developments in network operations, initially in New Zealand and then extended on a much larger and broader scale in India, “The vendors... gain economies of scale because they build, run and support networks for several Indian operators. Ericsson’s Mr Svanberg says his firm can run a network with 25% fewer staff than an operator would need. Bharti’s operating expenses are around 15% lower than they would be if it were to build and run its network itself, and its IT costs are around 30% lower, according to Capgemini.”*

Meanwhile, a momentous experiment in spectrum sharing is taking place in America. A company called Spectrum Bridge has developed a database-driven model for dynamic spectrum allocation in unused spectrum bands, the “white space” in the TV bands. This is in the 200 to 600 MHz band, with considerable advantages in propagation over distances, through foliage and walls, without attenuation as experienced at higher frequencies.

This system is being tried in Claudville, a rural community on the border of Virginia and North Carolina. As is likely to be true in rural India, using open spectrum that is unlicensed is impractical because of the distances, terrain and foliage. Fibre and copper lines are not only impractical, but also prohibitively expensive, a fact that people who suggest the use of existing wiring for broadband don’t seem to realise.

In this context, given the discussions on the possibility of spectrum trading as a solution going forward in the TRAI hearings, it is instructive to note that despite the US Federal Communication Commission’s secondary market initiatives taken in 2003, not much spectrum trading had actually taken place until Spectrum Bridge’s introduction of their tracking and trading model, SpecEx (see Subscribers view available spectrum at a chosen location and frequency band with pricing details when they want to buy, or list available spectrum to sell by location and frequency band. Therefore, any recommendations by TRAI or decisions by the Empowered Group of Ministers (EGoM) or the government should take this into account in considering the path of market traded spectrum based on exclusively assigned bands. It would be unrealistic to expect such trading to take place simply because it is allowed, without other facilitating developments as have been achieved by Spectrum Bridge in America.

A second problem is that trading in spectrum can result in effects equivalent to land-grabbing in real estate. This serves less for effective communications than as an asset play for profit.

Like SpecEx for priced spectrum, is a free website that the company supports to show free TV white space (the “digital dividend” that is talked about) that can be used on the basis of open access to unlicensed or open spectrum.

In the trial at Claudville, Spectrum Bridge deployed the network with Dell and Microsoft contributing computer equipment and software to the local school. Teachers can now incorporate distance learning resources into the school’s curriculum.

Our policy-makers need to move beyond debates over slicing and dicing the spectrum to determine the smallest efficient band — 2.5 MHz for CDMA and 4.4 for GSM? Is 6.2 MHz all that any operator needs?... and so on. A direct solution is to not assign spectrum for exclusive use, and instead enable its use as a common resource that must be accessed by everyone who needs to communicate on the network, exactly as public roads are accessed by paying road taxes and tolls. If spectrum must be assigned nominally to operators for administrative reasons, they should be obligated to pool this spectrum for common access.

Once we are able to aggregate spectrum in the frequency range which allows propagation over distances and through natural and man-made obstacles — buildings, foliage, etc. — we will have the open “highways” for broadband for its widespread usage across the country. This can only be achieved at relatively low cost through a progressive revenue-sharing arrangement, which is what happened eventually for voice communications with the National Telecom Policy 1999.

These are complex technical and commercial issues, and require the concerted effort of stakeholders and experts to devise the most effective solution in the public interest. The TRAI hearings are the first step in this process.

* ‘The mother of invention’, The Economist, September 24, 2009

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