Advice for the New FCCFriday, May 22, 2009
As the new FCC begins to take shape, and the economic climate perhaps begins to improve, the FCC will be facing some real challenges in the wireless space. Left over from the last administration is the issue of the 700-MHz D Block and the idea that it could be auctioned, paired with the adjacent public safety spectrum, and a new nationwide network could be built to serve both the first responder community and commercial network operators. Many of the moving parts needed for this to happen have changed dramatically and I believe a new, very different approach is needed.
Then, of course, there is the AWS-2/3 spectrum that was supposed to have been auctioned on a nationwide basis to provide broadband services to 95% of the U.S. population over a ten-year period, with a portion of the network available for free access. The old FCC was hell-bent on making this happen, not for sound economic reasons but for what appeared to be a belief that someone or some company would actually be able to build this new network and provide the required coverage. It seemed to dismiss the issue of interference to AWS-1 spectrum holders but fortunately ran out of time before it had a chance to move this forward. Things have changed here, too. We now have $7.2 billion in funds to build out broadband services for rural America (if that will really be enough), and several of the 700-MHz auction winners are planning to build out their commercial systems to cover areas of the United States that have never been covered before.
Unfortunately, the use of TV White Space (the space between TV stations) as unlicensed spectrum was passed by the old FCC. The good news here is that in most major cities there is not enough white space available to provide for what the Internet community thought would be an entirely new way to deliver wireless broadband to show commercial operators that wireless broadband could be delivered for free or at much lower costs. It is ironic to me that Google, one of the companies pushing unlicensed use of TV White Space, cannot use it in its own backyard. In the San Francisco area, there is a limited amount of white space and there are not three contiguous unused channels, which is a requirement for running higher-power systems.
The old FCC was in love with Broadband over Power Lines (BPL), a technology that had been tried over and over again for thirty years but was never proven to be economically feasible, but was proven to cause severe interference to a wide variety of radio services. There are finally some new faces at the FCC who understand the problems with BPL and will hopefully help the new commissioners understand that BPL is not a viable option. Further, there is really no place for it any longer with the advent of the “smart grid” power distribution system and the new communications services that will be required to manage it.
The New FCC
The new FCC will also have to deal with many new issues and requests, one of which is its charter to develop a far-ranging spectrum plan by next year. This plan is supposed to look forward, indentify our spectrum needs, and make recommendations on how to manage the spectrum going forward. The last attempt at this was the former President’s Spectrum Management Taskforce that was supposed to be a big deal—the NTIA, FCC, and others were involved in looking at spectrum usage and coming up with a definitive report on how best to make use of spectrum going forward. It actually did publish a report, but it was out of date by the time it came out.
As the FCC moves forward with its new spectrum review, I hope it listens to its engineering staff and others with experience. Otherwise it is liable to make some false assumptions that could cause us grief in the future. The biggest mistake would be to view all new spectrum allocations as having to be broadband assignments and not make any provisions for channelized or two-way radio spectrum. Today’s broadband technologies cannot provide some of the types of voice communications needed by first responders. For example, GSM, HSPA, CDMA, EV-DO, and LTE do not provide the capability to talk directly from one unit to another without going through a cell site or base station (repeater) radio system.
In many instances during a first responder incident inside warehouses, airports, hotels, and many other places, there is a need for one-to-many communications that do not go through a cell site. In the recent fire in Santa Barbara, there were more than 500 engines, 30 dozers, 16 aircraft, many hand crews and lots of logistics people fighting and managing the fire and resources. Much of the communications at this fire was over simplex—one-to-many direct communications channels without using backbone cell sites or repeaters of any type. In many cases, simplex communications are much more efficient than using a cell or repeater system that provides communications over a much larger area than is needed.
I believe we will need to keep these types of low-bandwidth channels around for a long time to come. In fact, one of the interesting things about recent FCC actions is that while it is busy dividing up spectrum into broadband segments, it is also requiring these channelized radios to reduce the amount of bandwidth they take up. The first stage of this, to be fully implemented by 2013, is to decrease the bandwidth from 25 KHz per channel to 12.5 KHz. The second phase is to move to 6.25-KHz channels.
The reason this change was implemented was to provide more of these types of channels in each given portion of the spectrum. However, you cannot use these “narrowband” channels even for slow-speed data, audio quality is poorer, and in many cases, the coverage area of a system is reduced, requiring additional radios and tower sites to gain back the coverage that has been lost. Narrowbanding also costs those who can least afford it a great deal of money. There are only two options: Replace all existing radio equipment with equipment capable of narrowband operation or modify the radios that can be modified to operate in a narrowband mode.
This move might have made sense a number of years ago at the height of the demand for two-way radio systems, but business customers have been moving away from two-way for some time now. Nextel’s very existence was based its ability to provide push-to-talk as well as cellular-like service for many companies that had been using two-way radio systems. Today there are fewer two-way radio customers in the United States than ever and the numbers continue to dwindle. Therefore, there is no urgent need to continue with the FCC’s narrowbanding mandate. But the process has started and cannot be reversed, although it could be stopped at the 12.5-KHz level and not continue on to 6.25 KHz. There is very little to be gained by moving to narrower channels and the costs are high, especially when agencies and companies are already struggling to control expenses. The cost to narrowband all of the first responder radios in New York City would be an incredible burden, and the city may be better off requesting a waiver. Another choice would be to move to an all-broadband system, but this would mean giving up one-to-many, scene of the incident communications as well as, in many cases, the ability to communicate from deep inside buildings back to the commander on the street.
The FCC needs to listen to those both within the FCC and on the outside who understand the technologies and mix of technologies that will be required over the next fifteen to twenty years. The idea that cognitive and/or software-defined radios will negate having to manage our spectrum is not realistic, nor is refarming spectrum that appears to be lightly used. Consider the channels used by the Secret Service that are available all over the United States. These channels are lightly loaded most of the time. However, when the President or another dignitary arrives in a specific location, these channels go into constant use for security and coordination. Should these channels be made available to others when they are not in use? The same goes for first responder and business channels. There is no way to tell when license holder demand might spike because its two-way radio system is being used extensively to manage a problem or an incident.
Yes, spectrum is a finite resource and most understand it is not like wire and fiber where we can simply add more when we need it. And yes, broadband services can provide better spectral efficiencies. However, my assessment is that it will be many years before there will be commercial technologies that can meet all of the communications needs of closed groups and at the same time provide for public phone calls and surfing the Internet.
In addition to the technology issues the FCC will have to wrestle with, there is a significant division of opinion at the moment as to how many broadband services are needed to serve customers and keep competition keen, thus keeping prices low. The first thing one needs to understand is that U.S. consumers pay far less for voice and data services than consumers in most of the rest of the world. There are a few exceptions including India, but in Europe and Asia, the costs of both wired and wireless services are higher than here. This is not due to regulation by the FCC or the feds, it is because we live in a world where competitors vie for each and every customer.
Yet there is a perception both inside the beltway and in Silicon Valley that service providers are taking advantage of us, our service access to the Internet and to each other should be cheaper still, more competitors will put more pressure on our pricing, and some new competitors might even provide broadband access for free by using new business models including advertising. The AWS-2/3 band, TV White Space, and the push for even more unlicensed spectrum are all a result of this perception. Unfortunately, many who share this vision have a lot of clout inside the beltway, thus the perception is slowly being accepted as a reality, but this reality will not survive the test of time.
Consider the San Francisco Bay Area with 3.5 million people and another several million or so in and out of the three cities (San Francisco, Oakland, San Jose) during an average year. Today these 3.5 million people are served by six to eight voice and broadband data providers, both wired and wireless, not counting MVNOs (Mobile Virtual Network Operators), and by 2012 that number will have grown to at least twelve providers. Regardless of how I do the math or what metrics I use, even at 300% penetration (meaning we all have multiple wired and wireless devices), I cannot make a spreadsheet come up showing that all eight of today’s or twelve of tomorrow’s providers will be able to survive in a free and open market.
How many providers are enough? The answer is as many as can survive long-term and make money for their investors. Is that five or fifteen? I believe the number is closer to five and certainly less than ten. But logic doesn’t seem to mean anything to those who discovered wireless late and are determined to make their next fortunes by deploying even more wireless networks.
This is no different than trying to determine how many airlines, car companies, or shipping companies can survive over the long term. Each of these industries makes significant investments to provide service, and the reason to provide that service is to fill a need in a profitable manner, which is what the company’s stockholders expect and demand. The new FCC should reflect on the competitive landscape before authorizing yet more competitors. If it believes more are needed, then it should authorize the spectrum and let it happen. At the same time, it should make sure there are contingency plans to pick up the pieces (and the spectrum) when companies cannot make it in this market-driven world.
These are the same issues we are facing as we try to provide broadband services to rural America. It is about a return on investment, not technology, and I have been saying this for some time now. We have the technologies and the capabilities, we just don’t have the business models we need to make it work—throwing $7+ billion at this problem won’t fix it. There are ways to make it work, but it appears as though those inside the beltway are only listening to themselves and those who have access to them as a result of political contributions and promises of more jobs just around the next corner.
My final piece of advice for the new FCC is to use all of the resources at its disposal. There are many very talented engineers and lawyers on staff, as well people who have been there long enough to have seen mistakes of the past come back to haunt not only the FCC, but everyone involved in telecommunications. I would advise the FCC and congress to listen to those who are engaged in the telecommunications business and understand the issues.
Last but not least, the new FCC needs to recognize that the first responder community has been struggling with interoperability issues for more than thirty years, and the promises made to them after 9/11 and Katrina remain hollow and empty.
Andrew M. Seybold