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Wireless Technology Prospects and Policy Options 1 Introduction: Trends and Forces Reshaping the Wireless World This report examines the evolution of radio-frequency communication—commonly referred to as wireless communication1—and the framework that governs its use (a framework that also extends to uses of radio frequencies for purposes other than communication). An avalanche of new technologies, applications, and markets for wireless communications is colliding with a well-established and comprehensive but increasingly obsolescent framework for the allocation, assignment, and utilization of the radio spectrum. Even as demand for wireless services continues to grow, much of the radio spectrum has already been allocated and assigned by frequency band (and often by geographical location) for a multitude of private-sector and government uses. The more recent developments come on the heels of many decades of technological progress, notably marked by widespread deployment of existing wireless capabilities such as several successive generations of cellular telephone technology now used by billions of people worldwide and a proliferation of actual and proposed uses of wireless communications. Significant policy changes in recent decades reflect efforts to adjust to new technologies and to decrease reliance on centralized management. There is debate about how the overall framework should be changed, what trajectory its evolution should follow, and how dramatic or rapid the change should be. Many groups have opinions, positions, and demands related to these questions, reflecting multiple commercial, 1 This report uses the terms “radio” and “wireless device” synonymously.
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Wireless Technology Prospects and Policy Options social, and political agendas and a mix of technical, economic, and social perspectives. This report thus seeks to shine a spotlight, in ways the committee hopes will be useful to those setting future spectrum policy, on emerging technology trends and to outline policy directions that align with those trends. It aims to provide a cogent discussion of the overall rationale for changing policy, the opportunities afforded by new technologies for spectrum management, and some long-term directions for improvement in policy. The Committee on Wireless Technology Trends and Policy Options was not in a position to examine the details of the numerous specific areas of contention that are the subject of frequent debate today regarding use of the spectrum, or to evaluate the merits of opposing claims. This report thus does not offer specific prescriptions for how particular frequency bands should be used or seek to resolve conflicting demands for spectrum for particular services. Instead, the committee intends that its discussion of the relevant technology trends and policy options should be helpful in addressing these conflicts, both today and in the future. ADVANCES IN RADIO TECHNOLOGY The development of technologies and the associated policy and regulatory regimes that govern their use are often closely coupled. For example, from the late 19th century until recently, the roadways for communication and transmission of information (e.g., the telephone system, broadcast television, and radio) were, like those for transporting people and physical goods, owned, managed, and regulated by a relatively small number of institutions. The concerns and assumptions underlying policies were grounded in the technical realities and economic and political imperatives of the time. The interplay between technology and policy was apparent as early as the 1910s. The growth of radio communications and the spectrum policy that emerged reflected a compromise on a framework for spectrum management. When spectrum regulation began with the Radio Acts of 1912 and 1927 and the Communications Act of 1934, the primary obstacle to signal reception was noise. Because of the quality of components available at that time and the nature of the most popular frequency bands of the day (which were selected for their longer propagation distances), noise was a significant problem, and interference (i.e., human-generated noise from other transmissions) from other sources was regarded as intolerable and something to be avoided. Accordingly, a regulatory structure was set up that allocated frequencies with specific power levels and bandwidth masks uniquely to single broadcasters or services in a given geographic
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Wireless Technology Prospects and Policy Options area. For the most part, the environment consisted of a small number of high-power transmitters separated by frequency and geography, and a very large number of mute receivers. Licenses granted the right to broadcast using a few kilohertz of spectrum and also provided an “address” (in the form of, for example, AM radio channel numbers) in addition to a means to avoid interference. Today, radios routinely operate in frequency ranges where background noise is limited and dealt with rather easily. The very large number of active transceivers means that the primary challenge is separating the desired signal from the signals of all the other potentially interfering transmitters, not avoiding noise. The huge number of devices associated with many modern services means that frequencies must be shared (and that the particular frequencies in use at any given time are not apparent to the user). For example, many cell phones share a particular block of spectrum at any given time, with the sharing enabled by separation by code (code division multiple access) or time slice (time division multiple access) as well as location (which cell the phone is currently in). These challenges were not fully anticipated by traditional spectrum allocation and licensing schemes. Moreover, in the past 50 years, a number of changes—including a fundamental new understanding of physics and information theory; vast increases in the computation that can be performed by a compact, cheap, low-power device; and improvements in analog components—have allowed for very inexpensive processing of signals in ways not contemplated when many spectrum polices were established and allocations were made. In short, radio-frequency communication today is being profoundly changed by a related set of technological advances—both in the capabilities and performance of individual radios and in the design of networks and systems of radios. These advances, which are discussed in more detail in Chapter 2, include the following: A shift in favor of digital signal processing and use of low-cost complementary metal-oxide-semiconductors integrated circuit technology for both digital and analog radio components; The advent of new radio systems architectures that rely on distributed (and often Internet-Protocol-based) control and on more localized transmission using microcells and mesh networks, rather than traditional architectures that rely on centralized switching or wide area transmission; The development of a variety of techniques, including more robust receivers, antenna arrays, frequency agility, and new modulation techniques and coding algorithms, to permit dynamic, fine-grained, and
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Wireless Technology Prospects and Policy Options automated exploitation of all available degrees of freedom—that is, not just static separation in frequency and space but also dynamic use of frequency, time, space, and polarization—along with “code”2—to distinguish radio signals; and The development of technologies that permit flexible and adaptable radios that can sense and respond to their operating environment and can coordinate their operation in an increasingly dynamic, distributed, and autonomous fashion. The technological advances outlined above and discussed in more detail in the next chapter call for a careful reassessment of the assumptions that underlie spectrum policy. EXPANSION IN APPLICATIONS AND USERS The transition from wired and fixed place-to-place communications to wireless mobile person-to-person (and device-to-device) communications has been under way for decades.3 Radio, once confined to largely unidirectional transmissions from a small number of broadcasters to a large number of passive receivers, has blossomed to include bidirectional communication among a much larger numbers of devices. The number of people actively using wireless communications has grown dramatically: only a couple of decades ago, there were thousands of radio and television broadcasters, a half million amateur radio operators, and a few million mobile radio users worldwide; today there are billions of mobile telephone users, hundreds of millions of wireless local area network (WLAN) users, and similarly large numbers of low-power in-home and personal devices. Many other services and products ranging from satellite television to global positioning systems (used, for instance, in automobile navigation systems) to public safety communications make use of spectrum licensed to specific companies, government agencies, or other entities. Perhaps most familiar and notable is that there are nearly 300 million cell phone subscribers in the United States4 and 5 billion subscribers world- 2 Although it is strictly speaking a technique for exploiting the other degrees of freedom, modulation or code is often referred to as another degree of freedom because it can be used to allow separation of signals that appear to be at the same frequency, time, and space. 3 Donald C. Cox, “Wireless personal communications: What is it?” IEEE Personal Communications, April 1995, pp. 20-35. This paper notes the transition occurring already as far back as 1995 due to wireless communications. 4 “CTIA—The Wireless Association, Wireless Quick Facts: Mid-Year Figures,” available at http://www.ctia.org/media/industry_info/index.cfm/AID/10323.
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Wireless Technology Prospects and Policy Options wide.5 Many everyday products that have been sold by the hundreds of millions—such as cordless phones, baby monitors, security systems, garage door openers, keyless entry for automobiles, and a wide variety of WLAN products—make use of so-called open bands for which individual licenses are not required and only low-power transmissions are permitted. These two familiar examples are notable both for their success and for their distinct features. WLAN technology enabled the rapid and flexible deployment of a wide variety of devices. Cell phones became nearly ubiquitous as a result of large capital investments and the spectral efficiency achieved by their technology. The success of the cell phone industry was predicated on the solution of an extremely difficult (indeed nearly insurmountable) engineering problem in the presence of a huge, visible, obvious, well-understood market opportunity—universal mobile telephony. In contrast, WLANs involved solving a simpler engineering problem for a market with considerable potential but less certain value. Many wireless devices use multiple wireless systems and technologies. Cell phones now often include Bluetooth capability,6 allowing them to connect to wireless headsets and vehicle audio systems7 as well as the cellular telephone system. Laptop computers today may contain wireless LAN, Bluetooth, and cellular communications capabilities. A digital video recorder might connect to a home wireless network to allow sharing photographs and music from other computers on the network while also receiving broadcast signals over the air and commercial satellite television signals. Both wireless LAN and cellular capabilities are being built into new types of consumer electronics such as electronic book readers. Military applications of wireless technology have expanded well beyond voice communications and radar systems, and many applications initially developed for military purposes have found widespread commercial or civilian use. For instance, the Global Positioning System (GPS) was launched as a military application and is now used by hikers, in-vehicle navigation systems, and even in golf carts. More recently, wireless technology has been applied to machine-to-machine communications, with expectations that such communications will exceed those involving humans within the next few years.8 Fleet 5 Estimates were that by the end of 2010, there would be 5.3 billion mobile subscriptions worldwide. See International Telecommunication Union (ITU), The World in 2010: ICT Facts and Figures. Geneva. 6 Bluetooth wireless technology is one of several short-range communications technologies intended to replace the cables connecting portable and fixed devices. 7 The increasing prevalence of laws requiring hands-free operation of cellular phones in automobiles in the interest of safety concerns is driving increased interest in this application of wireless technology. 8 “A World of Connections: A Special Report on Telecoms,” p. 5 in The Economist, April 28, 2007.
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Wireless Technology Prospects and Policy Options management, supply chain and logistics management, automated meter reading, security monitoring systems, vending machines, and sensor networks monitoring industrial process are just a few examples of the applications already in use and being developed. These distributed control systems made up of sensors, remote devices, and actuators are linked into wireless networks via wireless communications channels.9 Radio frequency identification (RFID) uses wireless communication to identify tagged objects. Although this prospect has been anticipated for some time,10 such applications are now being more widely adopted. Applications of wireless technology are moving from any time and any place to include any thing.11 In short, wireless technology is spread broadly across all activities of daily life and is becoming an ever more integral and indispensable part of those activities. Reports of how the wireless revolution is changing everyday life abound in the news, and they include news of the pervasive and ubiquitous computing enabled by wireless communications, making all sorts of previously impossible things possible. These changes are driven by technological advances and by the creation of new applications that make use of those advances to provide new services and create new markets. The potential is real, but realizing it, with all of its implications for more and more wireless communications of all types, will continue to strain the spectrum management regime. Wired Versus Wireless Communication (Propagation Versus Backhaul) Fiber optics finally led to the demise of Grove’s law, which (contrasting the remarkable rate of improvements in computing performance with the slower rate of improvements in the performance of deployed communications capabilities) forecast a doubling of the bandwidth of the telephone system every 100 years.12 The effect of rebuilding the cable and telephone industries with an abundance of fiber-optic technology has been transformative, as has been the deployment of broadband local access infrastructure using fiber, digital subscriber line,13 and cable modem technology. The most significant impact for wireless of the investment in this 9 Andrea Goldsmith, Wireless Communications, Cambridge University Press, 2005. 10 National Research Council, Embedded, Everywhere, The National Academies Press, Washington, D.C., 2001. 11 International Telecommunication Union, Internet Reports 2005: The Internet of Things, United Nations, 2005. 12 See, for instance, National Research Council, Defining a Decade: Envisioning CSTB’s Second 10 Years, Proceedings of Computer Science and Telecommunications Board’s 10th Anniversary Symposium, National Academy Press, Washington, D.C., 1996. 13 Interestingly, digital subscriber line networks pose their own spectrum management challenges because wire pairs within the telephone wire plant radiate into each other.
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Wireless Technology Prospects and Policy Options infrastructure has been a significant reduction in the need for medium-and long-range propagation of radio-spectrum signals. In effect, wireless technology has become an important (though not exclusively) local access technique for interconnection with a huge fiber transport infrastructure for voice, data, and, increasingly, video transmission. Fiber-optic connections frequently provide these “backhaul” services, which are needed to connect distributed sites (such as cell towers) to the network. Of course, a backhaul role remains for wireless links, such as microwave and satellite communications, but the tremendous breakthrough in the cost and capacity of fiber-optic technology has shifted the focus of wireless communications more toward “last-mile” and “last-meters” issues. Another consequence is that the market in wireless services is more closely linked to the market in last-mile wireline communications services. This shift increases the importance of wireless services that operate at shorter ranges. At the shortest ranges, near-field communication is used in such applications as touchless public transportation passes, and RFID is used for communication between, for example, vehicle transponders and tollbooths. CHANGING MARKET DYNAMICS Wireless technologies are making possible valuable new services and products. Most large-scale commercial applications of wireless technology have until recently operated using licensed spectrum—spectrum in which only the assigned user can operate and offer services according to the terms of its license. Broadcast television and radio, satellite communications, and cellular telephone systems are prominent examples. As personal wireless communications and related data services are improved, demand for spectrum to be used by individuals and devices continues to increase. As previously discussed, a growing number of devices (including laptops, tablets, cell phones, electronic book readers, cameras using WiFi, headsets and other devices using Bluetooth, and sensors and controls using such protocols as ZigBee) operate in open bands in which defined technical rules for both the hardware and the deployment methods are employed to enable shared use without license rights or guarantees of protection from interference. Such capabilities are being deployed by individual users (households with WiFi for sharing a broadband connection throughout their house); schools, other organizations, and firms (to provide connectivity within their premises); communications carriers (to complement their offerings using licensed spectrum or wireline connections); and local governments (for their own use or to extend communications within their communities). This complementary approach is often credited with having allowed the rapid development of new products and services. Spectrum
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Wireless Technology Prospects and Policy Options policy, service offerings, and business models have all been evolving to take advantage of licensed operation as well as operation in open bands. Some currently licensed spectrum uses are facing competition or replacement by technology-enabled alternatives. For instance, terrestrial broadcast television now competes with both cable and satellite transmission, and they all compete with video delivered (by streaming or download) over the Internet. Spectrum once dedicated to a particular use becomes less valuable as alternative uses become more valuable. An obvious example is the spectrum once reserved for analog television broadcasting channels and freed when broadcast television completed its transition to all-digital transmission. The question of what to do with the “white space” created by freeing spectrum previously allocated for television channels 2 to 51 has highlighted many of the arguments about the merits of licenses, the possibilities for using markets to shift spectrum to new uses, and the role of open-band approaches.14 Still another aspect of shifting market dynamics is related to the globalization of markets. Global markets for wireless communications devices have been driven not so much by global travelers, which are relatively few, as by the global economies of scale associated with common components, common products, and consistent standards that make it possible to develop products and services for large markets. Where differences do exist, decreasing component costs and increasing miniaturization have enabled multimode devices such as tri- and quad-mode cell phones that sidestep some of the harmonization issues. THE EVOLVING POLICY AND REGULATORY FRAMEWORK There appears to be a broad consensus that the current framework for spectrum policy is ripe for change.15 This attitude reflects recognition of the shortcomings of centralized government management of spectrum use as well as the need to accommodate present and emerging technological capabilities such as those discussed in Chapter 2. A number of significant policy changes reflect efforts to adjust to new technologies and to shift some control from central management to markets and open bands. This section reviews the origins of the present policy regime and some recent efforts to make changes. 14 See testimony submitted to the Federal Communication Commission, “Unlicensed Operation in the TV Broadcast Bands,” ET Docket No. 04-186, and “Additional Spectrum for Unlicensed Devices below 900 MHz and in the 3 GHz Band,” ET Docket No. 02-380. 15 FCC, “Report of the Spectrum Policy Task Force,” ET Docket No. 02-135, November 2002, p. 11; Government Accountability Office (GAO), Telecommunications: Comprehensive Review of U.S. Spectrum Management with Broad Stakeholder Involvement Is Needed, GAO-03-277, Washington, D.C., January 2003, p. 3.
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Wireless Technology Prospects and Policy Options History There are several potential historiographies of the emergence of wireless communications policy in the United States. Each represents a particular perspective on the proper role for government and for markets in the management of spectrum. This section starts with a brief summary of the official administrative story—that is, the legislative and regulatory actions beginning with the Radio Act of 1912. Both the Supreme Court, when it initially upheld the role of the Federal Communications Commission (FCC) in licensing wireless systems, and the FCC in various reports (such as the Spectrum Policy Task Force report described below in this report) reflect this perspective. Three additional perspectives reflect actual or perceived motivations, priorities, and consequences from alternative points of view. Often unstated or implied in current spectrum policy debates, these stories color the assumptions and arguments made by the diverse policy stakeholders, with numerous important implications for spectrum policy analysis. They also serve to reveal the many potential pitfalls for spectrum policy making. Official (Administrative) Story The administrative story begins with the demise of the Titanic and the sense that potential rescuers could not be reached because of a lack of coordinated communications. The Radio Act of 1912 was meant to address such issues, but a 1926 court decision in United States v. Zenith Radio Corp. held that the 1912 act did not allow the secretary of commerce (under authority from the President) to refuse licenses.16 That decision led to an 8-month period when the law broke down and a cacophony of signals was transmitted, so that no one could be heard, followed by the rapid passage of the Radio Act of 1927. The provisions of the 1927 act were mostly incorporated into the Communications Act of 1934, which unified the regulatory regime for nongovernmental use of spectrum for telephone, telegraph, and radio under the control of the FCC. Regulation of governmental spectrum use was assigned to the executive branch, and eventually, in the 1970s, to the National Telecommunications and Information Administration (NTIA) of the Department of Commerce. This split addressed concerns about concentrating licensing authority, as reflected in the 1926 court decision.17 These two agencies, the FCC and the NTIA, must coordinate to accommodate the full range of spectrum users since no spectrum is specifically mandated for exclusive federal or nonfederal 16 United States v. Zenith Radio Corp. et al., 12 F. 2nd 614 (N.D. Ill., 1926). 17 GAO, Telecommunications: Better Coordination and Enhanced Accountability Needed to Improve Spectrum Management, GAO-02-906, Washington, D.C., September 2002, p. 2.
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Wireless Technology Prospects and Policy Options use.18 The system put in place in 1934 is largely the system that we have to this day.19 This historiography presents spectrum management as a straightforward technical problem, to be solved to the extent possible and necessary by the most direct and straightforward regulatory mechanism. Government Control Story The government story starts with a focus on the Navy’s efforts to control the airwaves since the early 20th century, efforts that had been almost entirely successful as the United States entered the First World War. It then follows the battle over the following decade that resulted in direct control (through the Independent Radio Advisory Committee and the NTIA) over much of wireless communications capacity, and indirect control through the private-public arrangement embodied in the FCC over the remainder. There are nuances to this story. Early versions focused on overly zealous regulation and the scarcity of capacity it caused.20 Newer versions focus more heavily on the positive political theory (i.e., the use of game theory and other formal methods) of legislation.21 The primary practical lessons of this perspective are that any form of regulatory solution, however well designed, can have undesired results, including corruption or failure, so that the institutional design of the regulatory system aims to minimize the role of self-conscious policy making. Business Story The business story focuses on the moves of the industrial players in the first quarter of the 20th century. It follows the path from Marconi to De Forest, the joining in of AT&T and later GE and Westinghouse, the formation of RCA, and the patent pools of 1920.22 In this story, a series 18 U.S. Department of Commerce, Spectrum Policy for the 21st Century—The President’s Spectrum Policy Initiative: Report 1, June 2004, pp. 8-10. 19 FCC, “Report of the Spectrum Policy Task Force,” ET Docket No. 02-135, November 2002, p. 7. Additional source: NBC v. U.S. 319 U.S. 190, 1943. 20 R.H. Coase, “The Federal Communications Commission,” Journal of Law and Economics 2(October):1-40, 1959; Jora R. Minasian, “Property Rights in Radiation: An Alternative Approach to Radio Frequency Allocation,” Journal of Law and Economics 18(1; April):221-272, 1975. 21 Thomas W. Hazlett, “The Rationality of U.S. Regulation of the Broadcast Spectrum,” Journal of Law and Economics 33(1):133-175, 1990; Thomas W. Hazlett, “Assigning Property Rights to Radio Spectrum Users: Why Did FCC License Auctions Take 67 Years?” Journal of Law and Economics 4(2):529-576, 1998. 22 Yochai Benkler, “Overcoming Agoraphobia: Building the Commons of the Digitally Networked Environment,” Harvard Journal of Law and Technology 11(Winter):287, 1997-1998.
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Wireless Technology Prospects and Policy Options of business decisions by the primary manufacturers of transmission and reception equipment in the second and third decades of the 20th century led to the emergence of the broadcast model. Through a variety of techniques, some developed in the market, some through the patent system, and some through the regulatory system, the broadcasting industry had settled by 1926 on the advertiser-supported networks using government-granted exclusive licenses that dominated until very recently. The following years of industry consolidation saw a shift from what was primarily an equipment-market-driven phenomenon in the 1920s (e.g., the need to create demand for receivers as the economic rationale for the creation of the National Broadcasting Company) to an advertiser-supported entertainment service by the 1930s. It also saw the shift from spectrum allocation by the secretary of commerce to allocation by an independent agency, the FCC. However, the basic structure was set in place even before—and independent of—formal legislation.23 The primary significance of perspective as a guide to contemporary policy making is in regard to the need to pay particular attention to the business structure of the markets in wireless communications equipment and wireless services and their implications for proposed institutional designs. Public-Interest Advocates Versus Commercial Broadcasters Story A third, and final, nonofficial story is the story of the battle between entrenched broadcasters and advocates concerned with a public interest in spectrum and publicly minded broadcast policy. In this story, much of the action that matters most occured later than in either of the two other nonofficial stories—in the period between the advent of broadcast radio and passage of the Communications Act of 1934. During that time, a variety of education, labor, religious, press, and civic groups opposed the network-based and advertising-supported system that was emerging and advocated for setting aside significant capacity for nonprofit and non-commercial broadcasting.24 The story is important because its primary elements continue to describe a fairly broad perception of the political stakes in wireless communications policy. Broadcast communications policy is perhaps the most visible of wireless policies for most Americans. The construct of the “public interest” evokes strong political emotions and deeply held beliefs. The political power of broadcasters, coupled with 23 Erik Barnouw, A History of Broadcasting in the United States: Volume 1: A Tower of Babel: To 1933, Oxford University Press, New York, 1966; Hugh G.J. Aitken, “Allocating the Spectrum: The Origins of Radio Regulation,” Technology and Culture 35(4):686-716, 1994. 24 Robert W. McChesney, Telecommunications, Mass Media, and Democracy: The Battle for the Control of U.S. Broadcasting, 1928-1935, Oxford University Press, New York, 1994.
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Wireless Technology Prospects and Policy Options the belief that this particular area of policy is especially important for, and amenable to, political action, creates important constraints on the range of policies practically open for reform. Allocation, Assignment, and Licensing The allocation of frequencies for a particular use (what is permitted to operate in a range of frequencies) is distinct from their assignment (who is permitted to use that range of frequencies). Allocation was historically made through rule making; recent years have seen a shift from assignment by comparative hearing to auctions and the introduction of secondary markets to allow market-based reassignment. The vast majority of licenses to operate wireless devices and systems in the United States are assigned in an administrative process either by the FCC, which has jurisdiction over use by private and state, local, and tribal users, or by the NTIA, which has jurisdiction over use by federal agencies. The fundamental principal for regulation of transmitters is that it is impermissible to operate a wireless communications transmitter in the United States except by license, unless the device has very well defined technical characteristics that allow it to be operated under one of the FCC’s permissive frameworks for unlicensed operation. Licenses typically include limits on the use of the equipment licensed which are typically designated in terms of the following: The frequency of signals transmitted by the system; The bandwidth of the signals; The power of the transmitter, given the bandwidth used; The antenna location and height or other design characteristics (such as direction); The number of other potential licensees to use equipment with equivalent characteristics; and The relations among licensees (e.g., license exclusivity and the presence of secondary and primary users). Licenses typically also limit the types of services that can be offered; for example, a television band licensee cannot use that spectrum for any other use.25 Devices that receive and decode but cannot transmit wireless communications are not subject to the same regulatory framework (although 25 The advantages of not specifying particular services are compellingly illustrated in the diversity of services that have been implemented in unlicensed bands.
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Wireless Technology Prospects and Policy Options some, like police radar detectors, may be regulated in other contexts). Note that because receivers contain local oscillators (to detect the signal or for their computational elements) that may interfere with other transmissions, they are subject to limits on these unintentional emissions. Overview of Recent Policy Developments Starting with changes made to the Communications Act in 1983, Congress has sought to encourage competition and innovation and to recognize the evolving technological reality.26 Today, increasing use is being made of less centralized mechanisms using markets in both spectrum rights and open bands. Changes to the Communications Act authorize the FCC to collect license fees, conduct spectrum auctions, and provide for spectrum allocation flexibility.27 Auctions have seen increasing use for making assignments, and secondary spectrum markets are emerging. The opening of new bands and the auctioning of spectrum rights, together with significant technological developments, is credited, for example with having enabled tremendous growth in the number of cell phone subscribers. Complementing these market-based mechanisms has been growing use of open bands, in which all users are free to operate subject only to rules of the road.28 This development had its origins in the decision to establish the so-called industrial, scientific, and medical bands at 900 MHz and at 2.4 and 5.8 GHz as open bands, an action that helped pave the way for today’s widespread use of WLANs. In recent years, two U.S. government initiatives aimed at stimulating broad reform were launched—the FCC 2002 Spectrum Policy Task Force report and associated ongoing activities, and the President’s Spectrum Policy Initiative of 2004.29 Recent specific policy changes have included approval of ultrawideband operation, which represents a new, fundamentally different way of thinking about wireless transmission and is also the first instance 26 47 U.S.C. 157, “New Technologies and Services.” 27 FCC, “Report of the Spectrum Policy Task Force,” ET Docket No. 02-135, November 2002, pp. 7-8. 28 A variety of terms describe this approach, including “license-exempt” or “license by rule.” This approach is probably most familiar as the basis for operation of WLANs, cordless telephones, and the like. 29 FCC, “Report of the Spectrum Policy Task Force,” ET Docket No. 02-135, November 2002; FCC Spectrum Policy Task Force, Report of the Spectrum Efficiency Working Group, November 15, 2002; U.S. Department of Commerce, Spectrum Policy for the 21st Century—The President’s Spectrum Policy Initiative: Report 1, June 2004.
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Wireless Technology Prospects and Policy Options of approval for the overlay of existing services;30 changes in licensing procedures to accommodate software-defined radios and proceedings regarding adaptive radios;31 a decision to permit low-power devices to operate on vacant broadcast television channels;32 issuance of a notice of inquiry for a spectrum-sharing test bed to be shared among federal and nonfederal users;33 and adoption of rules and development of technical measures enabling the sharing of spectrum at 5 GHz between existing military radar systems and low-power unlicensed devices.34 Two Recent Federal Policy Initiatives Several major federal policy initiatives were launched in recent years. These include the two described below—the FCC Spectrum Policy Task Force (and a series of proceedings that followed) and the President’s Spectrum Policy Initiative—as well as the FCC National Broadband Plan that was released in March 2010. FCC Spectrum Policy Task Force (2002) Seeking to exploit the opportunity opened by new technological capabilities, the Spectrum Policy Task Force (SPTF) approached not only the problem of the need for changes to spectrum management and allocation but also the long-term need to allow further change to happen readily in anticipation of such technological advance. The SPTF report of 2002 introduced new models and ways of thinking about the rights of users and licensees, about the accommodation of market forces, and about the preparation for future radio technologies beyond the horizon.35 The FCC chair formed the SPTF in 2002 to help the FCC improve spectrum policy management in recognition of the challenges it faces to “keep pace with the ever-increasing demand for spectrum and the continuing 30 FCC, Order FCC 02-48, ET Docket No. 98-153, February 14, 2002. 31 An adaptive radio and radio technology are commonly referred to as a “cognitive radio” or a “smart radio,” defined in a 2005 FCC proceeding as a radio empowered to “alter its transmitter parameters based on interaction with the environment in which it operates.” See FCC, Report and Order FCC 05-57, ET Docket No. 03-108, March 10, 2005, available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-57A1.pdf. 32 FCC, ET Docket No. 04-186, May 13, 2004. 33 FCC, ET Docket No. 06-89, June 8, 2006, available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-77A1.pdf. 34 FCC, Report and Order FCC 97-5, ET Docket No. 96-102, January 9, 1997, available at http://www.fcc.gov/Bureaus/Engineering_Technology/Orders/1997/fcc97005.pdf. 35 FCC, “Spectrum Policy Task Force Report,” ET Docket No. 02-135, November 2002, available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-228542A1.pdf.
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Wireless Technology Prospects and Policy Options advances in wireless technology and applications.”36 The SPTF report of November 2002 sought to provide a comprehensive and systematic review of FCC spectrum policy and to catalyze reform of that policy. The report offers a number of findings and recommendations aimed at improving spectrum policy and ensuring that it is able to evolve with technology and applications. The 2002 SPTF report summarizes the regulatory history of spectrum policy in the United States from its beginnings more than 90 years ago, covering both statutory and administrative aspects. It also notes that public interest use, such as for public safety communications and national defense, is an ongoing consideration of the regulatory process and is factored into policy decisions along with economic considerations driven by private-sector demand for services and applications. The SPTF report makes the case for spectrum policy reform, stating that the dramatic increase in demand for spectrum-based services coupled with significant and continuing technological advances makes reform not only possible but also necessary. It argues that these new and evolving dynamics are straining long-standing, outmoded spectrum policies that, unchanged, will fail to maximize the potential public benefits of spectrum-based services and applications. Specifically, it notes the potential for “smart” or “opportunistic” technology, such as software-defined radios, to allow more flexible use of spectrum. Additionally, the report notes that spectrum scarcity is of increasing concern. It refers to some evidence that allocated spectrum is being underutilized and calls for more comprehensive measurements of spectrum use to be undertaken. It sees better understanding of actual use as one means of identifying where scarcity might be mitigated through more efficient allocation and greater flexibility. The SPTF report identifies seven key elements for a new approach to spectrum policy: Maximizing flexibility of spectrum use. A flexible-use approach to spectrum policy, in contrast to the traditional command-and-control approach, allows licensed and unlicensed users maximum autonomy to determine the highest-value use of their spectrum and allows them to make choices based on market factors. Clear and exhaustive definition of spectrum rights and responsibilities. Clarity in the rules governing use would create an environment for spectrum users to confidently negotiate alternative arrangements for maximizing value. Rules should be written to identify uses that are excluded, prohibited, or limited, allowing users to explore any options not explicitly prohibited. 36 Ibid., p. 1.
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Wireless Technology Prospects and Policy Options Accounting for all dimensions of spectrum use. Spectrum should be allocated using time in addition to traditional dimensions of frequency, space, and power. Technology advances also make possible new approaches to allocation in these traditional dimensions. Promoting efficiency. Three types of efficiency are identified: spectral, technical, and economic. There are situations where spectral and technical efficiency may take priority over economic efficiency in order to promote public interest goals. However, economic efficiency can be promoted by providing spectrum users with flexibility of use and ease of transferability. This could allow maximizing of the value of services provided. “Good neighbor” incentives. To the extent possible grouping like systems or devices (e.g., low-power systems with high sensitivity to interference) together in spectrum “neighborhoods.” Periodic review of rules. Rules should be reviewed so that they can be adjusted in light of technological advances made since those rules were made. Such reviews should be scheduled at intervals that permit adjustment of business plans and investments. Enforcement. Enforcement increases in complexity with the complexity of technology and applications. Proper enforcement requires sufficient resources for monitoring use of the spectrum. The remainder of the 2002 SPTF report focuses on approaches for avoidance of interference, alternative spectrum usage models, and promotion of access to spectrum. First, the SPTF report addresses avoidance of interference, a problem that has been a major responsibility of the FCC from its beginning and has always been a challenge. The issues related to interference have increased in technical difficulty and prevalence due to changes created by new technology and new applications. The SPTF report argues that these changes will challenge the continued effectiveness of current approaches to managing interference avoidance. It states that a more quantitative approach to interference management should be pursued by the FCC. The SPTF report recommends that the FCC move toward assessing interference based on real-time adaptation, actual spectrum use, and interactions between transmitters and receivers rather than on transmitter operations alone, as is currently done. Control of interference could be improved by several methods other than measurement, including approaches that account for and promote receiver robustness, increased use of automated transmitter power and frequency, advanced antenna technology, tightening of out-of-band emission limits, harmonizing references to interference, developing technical bulletins explaining FCC rules regarding interference, and developing a best-practices handbook. Second, the SPTF report examines alternative spectrum usage models.
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Wireless Technology Prospects and Policy Options Three models are described, including command-and-control, exclusive-use, and a commons (or open-access) model. The SPTF report concludes that spectrum policy is not generally best served by the traditional command-and-control approach but mostly requires striking a balance between the exclusive rights and commons models. The report presents the alternatives as offering a continuum over which elements of the different models may be incorporated in particular instances as necessary to best serve the public good. It identifies factors that may favor the application of one model over another depending on circumstances. Generally, the SPTF report argues that the exclusive-use model may best be applied where spectrum is relatively scarce and transaction costs associated with market mechanisms are relatively low. This contrasts with the commons model, which may best be applied where spectrum is relatively abundant and transaction costs associated with market mechanisms are relatively high. The SPTF report views the command-and-control model as best only for fulfilling compelling public-interest objectives such as conforming to treaty obligations (e.g., with respect to satellite transmissions), ensuring capacity for passive scientific observations, and supporting public safety communications. Even in these cases other models should, according to the SPTF report, be applied to the extent possible.37 Finally, the SPTF report recommends approaches for promoting access to spectrum, which it views as essential to continued innovation. It notes the significant market for unlicensed devices created in the relatively limited spectrum available for unlicensed use. It argues that further innovation is likely with additional available spectrum for such use. It also discusses how secondary markets involving the leasing of licensed spectrum rights might further promote access. In each of the three areas discussed—avoidance of interference, alternative spectrum usage models, and promoting access to spectrum—the SPTF report addresses transition issues that might arise. 2008 President’s Spectrum Policy Initiative The Commerce Department has been leading an effort initiated by a presidential order to take a similar fresh look at the use and management 37 It is important to note that both the market and the commons approaches claim that they would reduce spectrum scarcity. The market approach would price spectrum to clear competing uses, and the commons approach would create the conditions for markets in more intelligent devices that can successfully communicate without displacing other communications—that is, without “using” spectrum. The primary differences, then, are whether transactions costs associated with market mechanisms are higher than those associated with commons approaches (e.g., dispute resolution) and whether devices can develop the ability to clear competing uses through coordination.
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Wireless Technology Prospects and Policy Options of spectrum allocated to the federal government in various agencies and departments. The resulting Federal Strategic Spectrum Plan, released in March 2008 by the NTIA, incorporates summaries of 15 agency-specific plans and integrates planning needs of the NTIA and other federal agencies.38 The plan’s aim is to support a new and evolving spectrum management system that enables more effective use of spectrum and allows dynamic access to it where feasible. According to the plan, the current system cannot readily accommodate innovations or new operational requirements. The plan states that a new model for spectrum management is required to meet the growing federal and private-sector need for spectrum. It recognizes that much of the growth will be below 5 GHz, implying that additional use must be supported in already heavily utilized spectrum space. The plan emphasizes the need for agility and an evolutionary model for spectrum management that can rapidly take advantage of technology advances, including advances in use of the various degrees of freedom. It notes that meeting the needs identified in the plan will require coordination among all stakeholders, including federal agencies, state and local public safety entities, and private-sector users as well as vendors and researchers developing and commercializing technology advances. The plan identifies several specific future federal requirements for spectrum likely to drive spectrum policy and the methods needed to meet those requirements. First, more data and higher data rates will be needed for public safety communications and military applications, such as increased use of sensors and unmanned systems. Increased application of wireless communications for law enforcement and other federal agency needs was a common theme in agency-specific plans. Second, the demand for satellite and space-based services, including space research, global positioning systems, and remote-sensing operations for meteorological services and climate research, is expected to increase, driving the need for spectrum to support them. Use of high-frequency bands (between 3 and 30 GHz) and use of spectrum for radar and air traffic control were also identified by federal agencies as likely to grow over time. Finally, the plan noted emerging applications above 30 GHz that may drive spectrum use in this frequency range over the long term. The 2008 plan outlines near-term and mid-term strategies for addressing federal spectrum policy needs and briefly discusses challenges and plans for developing long-term strategies. It notes that projection of future spectrum use is largely qualitative (based on anticipated require- 38 U.S. Department of Commerce, Spectrum Management for the 21st Century: The President’s Spectrum Policy Initiative—Federal Strategic Spectrum Plan, March 2008, available at http://www.ntia.doc.gov/opadhome/opad_wire.html.
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Wireless Technology Prospects and Policy Options ments) rather than quantitative. Recognizing that private-sector spectrum needs are also likely to grow, the plan identifies crucial improvements—automation and analytical tools, standardized generation of spectrum requirements, and spectrum forecasting methods. The near-term strategy includes 10 elements for federal use of spectrum: Use of commercial services where feasible; Smart technologies such as software-defined (cognitive) radios; Flexible approaches to incentives for making underutilized spectrum available to other entities; A range of public safety issues, including interoperability, spectrum and infrastructure sharing, and expanded microwave backhaul; Considerations for continuity of government; Improving processing time for frequency assignment requests; Improving methods for spectrum valuation and incentivizing economic efficiency; Improving technical efficiency by such methods as optimizing sharing and tradeoff analysis; Trend forecasting; and Better interagency and federal/private coordination. The plan identifies two midterm strategies for improving spectrum management. First, it describes a unified approach to coordinating spectrum management at the federal level across the FCC, NTIA, and DOD. It also describes initial plans for creating a technology test bed to support exploration of new technologies and methods to share spectrum. The Department of Commerce Spectrum Management Advisory Committee, convened as part of the department’s spectrum policy initiative, issued a series of reports in late 2008 that examine definitions of efficient spectrum use, mechanisms for improving operational efficiency, the transition of federal services to more efficient technologies, a spectrum-sharing test bed, and federal-nonfederal spectrum sharing.39 39 See http://www.ntia.doc.gov/advisory/spectrum/csmac_reports.html.