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It’s a Busy World in Telecom
Location: London, UK
A few weeks ago I spent a day in Washington, DC with a wide range of regulators and government officials. My purpose was to discuss the Net Neutrality issue in addition to just spending quality time with some of the people who shape telecom policy in the U.S. This blog entry isn’t about either of those topics, but instead about an interesting observation that was made by one of the top regulators I met with. In our dialogue, the statement was made that the number of major telecom transformational activities underway right now is probably more numerous than any of us has seen in quite a while and, even more interesting, because the regulatory activity going on has the potential to change the telecom landscape in so many significant ways that the sheer volume is starting to become a bit overwhelming to keep up with.
This statement struck me as both true and also strange because telecom in general is viewed as slow moving and somewhat unexciting by most of the population. Since that day, I have been thinking about just how much really is going on and thought it might be of use to identify some of the many activities and to share my views on how they might change the telecom landscape.
First is Net Neutrality…This dialog is as political and as sensitive as any I have seen since telecom deregulation a decade or so ago. The camps are divided. One group wants the Internet to be an open pipe through which any application, device and user can operate without the explicit permission or control of the provider of that pipe. The other group believes the Internet is an intelligent revenue-producing system that is the essence of their business and, as such, they have a right to introduce controls and services to shape how it is used or, as a minimum, how it behaves.
I clearly don’t want to get into this too deeply in this entry – even uttering the term seems to cause some people to become emotional and even a bit irrational – but what is interesting to note is that this debate has changed the telecom landscape by bringing new views and participants into the regulatory framework.
Companies like Google and Yahoo, along with eBay, Microsoft and others, are now deeply involved in telecom policy dialog that has historically been the province of the more traditional operators and vendors. What does this mean for telecom policy? Well, at its most basic level it means that all future telecom policy will include a broader set of participants and a more divergent set of views on how telecom and IT are regulated, and that that dialog will become both more complex and more significant than ever before. At the same time, the risk that complex compromises between such a diverse group could result in bad policy is likely to grow, so we must be vigilant that we don’t compromise the very essence of telecom away by trying to satisfy every view and opinion. I have great sympathy for the policy makers tasked with this new reality because it will not be simple.
Second, is the already completed advanced wireless services spectrum auctions… Over the last year or so, a pretty massive amount of new spectrum has been auctioned off by the U.S. government. Auction 66 [or AWS (Advanced Wireless Services) auction] is a good example. In this auction, a large quantity of 1710-1755 MHz and 2110-2155 MHz spectrum was acquired by various parties. What was interesting is that some of the largest purchasers of spectrum were wireline and cable operators. What are they planning to do with spectrum that is highly suitable for technologies such as WiMAX and LTE? I can’t speak for them, but it is clear that there are going to be some new players in the mobile Internet space in the coming years. That increase in participants, coupled with new technologies such as 4G wireless systems, could make for not just new providers of existing mobile services but very likely new mobile services.
Third, is the Digital TV (DTV) Transition… This activity involves the decommissioning of analog television in the U.S. and other countries. What makes this interesting is that as digital TV comes on line in the next few years (February 2009 in the U.S.), a large amount of spectrum in the sub 1 GHz bands becomes free to be reallocated. For those who understand the value of spectrum in these lower frequencies, the key elements are that the signal will travel further and penetrate obstacles such as buildings much better than the higher frequency signals. That makes this spectrum extremely valuable for long-range or large-coverage broadband wireless services.
The auction for much of the newly reclaimed spectrum (the 700 MHz band, 698-806 MHz) is scheduled to begin in January 2008 and in this auction we are seeing some very interesting new characteristics required by the FCC. For example, part of this auction (Upper 700 MHz Band C Block) is about “open access”. This condition states that the technology deployed must allow for an open platform so that consumers of service in this band can use their own devices and applications of their choice and not be required to procure them from the operator of the wireless network. One of the characteristics of 4G is that the technologies of WiMAX and LTE are designed to support systems in such a way that this model of open access will be easy to implement. Again, I cannot tell you who will win the auction or exactly what technology they will use, but the fact that this portion of the band is carrying an open access condition will make for both possible new innovation and new regulatory challenges as the actual rules of open access get tested.
A second characteristic of this DTV-facilitated spectrum is that another part of the band will support government services for emergency response and public safety in a sharing arrangement with a commercial licensee. What this means is that although this part of the band can be used for commercial purposes by an operator, it must support preemption by government agencies in certain circumstances, such as a national emergency, and in such a mode act as those agencies’ communications vehicle. This creates an interesting set of challenges because a suitable technology for both commercial broadband wireless services and public safety must be chosen and an operating agreement will need to be reached between the public and private partners in a Network Sharing Agreement that will be subject to FCC approval. There is pretty significant work already defining this but what is of interest is that this new model adds yet another type of telecom option to the mix.
And fourth is the dialogue on “white spaces”… White spaces are defined as the following: when digital TV (or even analog TV) spectrum is allocated, there will inevitably be channels that are not used in a particular area (city, state, etc.). If a channel is not used, the idle spectrum in that channel is considered a white space. What the white spaces dialogue is about is trying to allow those white spaces to be used by new wireless technology that might deliver broadband services, streaming information, telemetry or any number of other telecom services.
What makes this tricky is that the spectrum that would be used by a white space technology is already allocated to something else but just happens to not be in use at that particular moment. Technically, that is a complex issue because the technology that would be used in such a system must be able to detect if the spectrum is truly idle and unused, and only if such detection is 100% accurate would the system utilize that band for other purposes. The technical issues that make this difficult are that there are many ways to detect usage of spectrum and even if nothing is transmitting in that spectrum there may be active passive receivers in that space that could be impacted if something “alien” were to transmit in that band.
Additionally, simply listening to the band will not be enough to detect and assure proper behavior and prevent harmful interference The systems will need to link to the site planning tools, the scheduling of services, the possibility of passive listeners that might begin to transmit if stimulated, and a host of other elements in these rather complex telecom systems. While this issue is complex, it does not mean we should not try to figure out how to utilize white spaces. The FCC is well into a proceeding that will soon lay out the rules under which these white spaces can be used. Currently, there are a large number of IT companies that are part of something called the White Spaces Coalition (note that there are very few, if any, true wireless companies involved in this yet) lobbying very strongly to move this forward. Again, this presents a very tricky regulatory issue but assuming we resolve the technology and regulatory issues, we will have yet another tool in the effort to create a more pervasive mobile broadband experience.
There are other regulatory efforts going on in the U.S. and in other parts of the world but even if we limit the scope of the activity to just the four above, the bottom line is that there is significant change coming to telecom.
As a final note, I can’t resist pointing out that in much of this new activity, the delivery of technology and the availability of spectrum to use it are happening at almost the same time (any of the spectrum mentioned above could be used by 4G systems such as 802.16e WiMAX for example), so the availability of the tools (spectrum, technology and systems) to expand and transform telecom is not the limiting factor.
The result is that the near term future of telecom stands to be not only more complex but also more expansive than we have seen in some time and that is something to get excited about if you are participating in the telecom industry. It is also presents some unique and maybe scary challenges if you are the regulators and policy makers trying to sort it all out. 
