The Spectrum Shortage That Isn’t
If you listen to wireless operators, their industry is on the brink of a catastrophe caused by success. “Innovation is at risk today due to the spectrum shortage that we face,” Verizon Wireless President Daniel S. Mead said in a keynote at the CTIA Wireless 2012 show. “There is no doubt there is a looming spectrum crunch.” CTIA President Steve Largent says we are “on the brink of a major wireless traffic jam.”
Demand for wireless data is definitely growing quickly, though just how fast is subject to dispute (as in the glory days of wireline internet growth in the late 1990s, there’s a tendency to overstate current growth rates and then project them into the indefinite future.) But despite the claims that we will exhaust our wireless data capacity by 2014, or 2016, or 2020, the evidence that a shortage of capacity is crippling wireless now, or will anytime in the near or medium term future is simply lacking.
And that’s a good thing, because notwithstanding the wailing of the wireless carriers and their trade association, the CTIA, the prospects for any major new allocation of spectrum are grim. Congress has authorized a complex scheme known as incentive auctions, in which television broadcasters will receive part of the proceeds if they allow the government to auction off spectrum they are not using.
It’s a fine idea, but it’s complicated by the fact that creating usable blocks of bandwidth will require some TV stations to move to new frequencies. Broadcasters are not flocking to offer spectrum. Bottom line, it’s going to take a lot longer to free any bandwidth for wireless data and in the end, the amount of new spectrum is likely to be substantially less than the 120 MHz that the Federal Communications Commission was hoping for. Wresting unused or underused spectrum from federal agencies (especially the military) is likely to prove even harder.
Promoting spectrum shortages serves carriers’ interest in several ways. AT&T used it as a major justification for its failed acquisition of T-Mobile and Verizon makes the argument to support its proposed purchase of unused spectrum from a group of cable operators. Considering bandwidth a scarce resource helps justify high prices and restrictive usage caps.
What carriers can do.
Speed LTE deployment. But there is a lot the carriers can do–and in some cases are doing–to alleviate any crunch. The first is an accelerated move to LTE technology. The carriers have promoted LTE as being faster than existing technologies and, in general, it is, but its real importance is that it that it uses its bandwidth far more efficiently than the 3G EV-DO and HSPA technologies. Verizon, which had hit a speed wall in EV-DO has been the most aggressive in deploying LTE, but AT&T is catching up. Sprint, which made a bad bet on alternative WiMAX technology, and T-Mobile are starting to move.
More Wi-Fi offload. Especially in the locations where demand is greatest, carriers can ease the pressure on their wireless networks by moving data traffic to Wi-Fi. The new Hotspot 2.0 (IEEE 802.11u) standard should provide for seamless transfer of sessions between wireless broadband and Wi-Fi. But the carriers have to support the hotspots and provide adequate backhaul capacity.
Small cells. Cellular communications is based on the concept that bandwidth can be reused by having each base station provide coverage to a relatively small area whose size is governed by power levels and the height of the antenna. In rural areas, carriers use very tall towers to cover big, but lightly used, areas, while in dense city cores, antennas are mounted much lower. Carriers could provide for much greater reuse of spectrum by going to even smaller microcells, which would be more like Wi-Fi hotspots in coverage. The downside is that this required building, paying for, and siting many more base stations, but it could greatly increase capacity. Ericsson, Alcatel Lucent, and Cisco are all developing small-cell gear and AT&T plans to begin testing service later this year.
Agile radios. From the beginning of wireless communications, the basic approach has been to assign dedicated spectrum to each user, with hardware designed to operate at very specific frequencies. This guarantees am environment in which some assigned frequency bands are very crowded while others are underused. There may be plenty of spectrum in the aggregate, while specific slices of it are clogged. For years, the dream has been to move to the use of agile, or software-defined, radios that could operate on any available spectrum. The technology is finally reaching the point where this sort of agility is technologically possible. But the transition will be very complex: We have a nearly century-old regulatory regime based on discrete spectrum slices. Licensees have valuable assets in their assigned spectrum, which also serves as a powerful barrier to new entrants. And billions of existing devices would have to be replaced to take advantage of an agile system. Needsless to say, a move to a new system is going to take a very long time.
Wireless is clearly the future and a powerful driver of innovation and economic growth. More spectrum is always better. But there are good solutions to alleviate shortages in the short and medium term. The situation is nowhere near as dire as the carriers would have us believe.