A Brave New World in Unlicensed Spectrum

Three key milestones that either occurred recently or are expected soon will shape the future of communications technology.

First, the number of mobile devices that connect to the Internet now exceeds the number of PCs connected to the ‘net, which is a reflection of our increasingly mobile society.

Second, the age of Big Data is here. The Washington Post recently reported that we have exceeded our computing capacity beyond the exabyte. According to TechTerms.com, the exabyte is a “unit of measurement so large, it is … used to measure the sum of multiple storage networks or the amount of data transferred over the Internet in a certain amount of time.” Going forward, strong data-crunching capacity will be a commodity and mobile devices will carry significantly more computing power than devices today.

Third, in the near term, the number of mobile devices in circulation will exceed the world population.

Yet, we are likely still in the early stages of the computing revolution, as Moore’s law states “computing capacity doubles every twenty-four months.” What is the convergence point between computing capacity and mobile devices? One word: spectrum. Spectrum is what allows all mobile devices to connect to the Internet via telecommunications networks. Spectrum allows for the seamless transmission of zeros and ones over the air between devices. Whether it’s a phone conversation, email, text or any other type of data transmitted wirelessly; it all requires the availability of spectrum.

Spectrum management and band allocations, including licenses and regulations, are overseen by the National Telecommunications and Information Administration (NTIA) and Federal Communications Commission (FCC). NTIA manages spectrum for federal use, such as the spectrum bands reserved for air traffic controllers, first responders and the Pentagon.

Licensed spectrum for non-federal use is managed by the FCC. This spectrum has been granted to licensees in exchange for financial compensation and other conditions. For example, all U.S. commercial providers of wireless telecommunications services, such as AT&T, Verizon, Sprint and others, must pay fees and abide by consumer protection regulations in order to maintain current spectrum licensees with the FCC. The cost for a commercial spectrum license is financially out of reach to all but a handful of companies. A license to offer wireless services to even some of the most remote communities costs hundreds of millions of dollars, and the cost is billions for larger, more urban communities.

A third category of spectrum is unlicensed and free. This category of spectrum is available to the general public and can be used by anyone, so long as the technical and non-interference parameters established by the FCC have been met. Wi-Fi and Bluetooth are the best commercially available examples of wireless technologies that use free unlicensed spectrum.

Earlier this year, the President’s Council of Advisors on Science and Technology issued a report titled “Realizing the Full Potential of Government-Held Spectrum to Spur Economic Growth.” One of the recommendations of the report is for the federal government to make available more unlicensed spectrum to meet demand and spur greater innovation in the U.S. economy. For example, Cisco estimates that within the next few years, traffic over Wi-Fi networks will surpass traffic over wired networks and the demand for spectrum will grow exponentially.

As more mobile devices proliferate and dominate the airwaves with large data transmission requirements, the existing airwaves will bottleneck, potentially stalling the development of mobile communications. Congress has been paying close attention to the FCC’s actions regarding spectrum matters, such as auctions and agency proceedings on spectrum, but has not enacted legislation to increase the availability of unlicensed spectrum.

However, part of the debate that will continue in Washington is between entrenched interests. Federal government stakeholders will seek to maintain exclusivity over existing federal spectrum allocations; private sector licensee holders such as telecommunications firms will seek to expand their share of exclusive spectrum allocations; and broadcasters may balk at relinquishing underutilized spectrum.

While there is no silver bullet to solve the possible spectrum bottleneck problems in the years to come, it is clear that NTIA, the FCC, and the private and public sector must work together to create a balance between licensed and unlicensed spectrum availability. This means that we should identify as many paths as possible to maximizing the availability and use of spectrum by a wider pool of stakeholders, including small- to medium-size businesses and entrepreneurs. The end-goal of such an approach should be to encourage the expansion and availability of unlicensed spectrum to entities that otherwise would not be able to afford access to licensed spectrum.

History has shown that SMB IT companies and firms are adept at conceiving and deploying innovative business models that leverage low cost and readily accessible platforms, such as the proliferation of social networking and mobile app business models. Computing technology can spur economic growth, create jobs and improve lives, providing a bright future. But this will require access to spectrum to fully materialize.