Insight: The Latest Waves in Spectrum

Posted by Mae Kowalke on Monday, May 04, 2015 with No comments

Recent developments and commentary in the wireless spectrum space touch on LTE and Wi-Fi aggregation, dish spectrum discounts, the long-term value of spectrum, fairness for unlicensed LTE, and a call for reform of the Federal Communication Commission's 'designated entity' program. Let's dive in!



Although unlicensed spectrum is free to use, it's important for LAA-LTE to use it fairly--for the sake of Wi-Fi. That's the stance of Jim Miller, director of radio standards at wireless communication systems vendor InterDigital, RCR Wireless shared in a recent article and video touching on conversations to be included in an upcoming report on LTE unlicensed and Wi-Fi. 

What would be fair use? Miller's definition is to have LAA-LTE nodes be brought into existing systems so they don't cause any more interference with Wi-Fi cells than any other Wi-Fi cell. Of course, that's just one interpretation and defining 'fair' is no easy matter. No doubt, compromises will be involved. 

In a related conversation with Ruckus Wireless director of service provider marketing, Steve Hratko, RCR Wireless explored two dimensions critical to successful deployment of LTE in the 5 GHz unlicensed band: site acquisition, and spectrum. What's fair for current and future tenants? 

Hratko thinks LTE Wi-Fi aggregation will prove to a better solution than LTE running directly over the unlicensed band. The idea is to have Wi-Fi access points run in the unlicensed band and have LTE small cells to run in the licensed band. Let each do what it's best at, in other words. 

Switching gears for a minute, let's consider possible future actions by the FCC, and what the industry is hoping it will focus on. 

Citing a recent Wall Street Journal article, Wireless Week said it appears the FCC may rescind discounts Dish Network received on spectrum bought during the AWS-3 auction. Apparently, FCC Chairman Tom Wheeler asked his staff to review bidding actions of Dish's designated entities (SNR Wireless, Northstar Wireless) that obtained the discounts. 

At stake: $3.3 billion in discounts. The argument is that SNR and Northstar aren't truly the type of small entities intended to benefit from such discounts, since they are essentially subsidiaries of Dish. The outcome could have implications for other players in the market as well. 

Not everyone thinks the FCC's Designated Entity program is even a good thing--at least the way it's current set up. 

Recon Analytics founder and analyst Roger Entner said in a Fierce Wireless article that, although the intention of this program is good (attract more small businesses to the wireless market), the devil is in the details. Specifically, he thinks DE rules ignore the fact that DEs are controlled by debtors and not shareholders. Strict rules and covenants on the part of investors are undermining the program. 

What's the solution? Some ideas from Entner: ease restrictions on leasing spectrum and bandwidth, increase the amount of revenue and funds a qualifying DE is allowed to have, and significantly shorten the time frame for build-out requirements. 

Finally, the expression "a diamond is forever" conveys the idea that a rare commodity is a good investment because it will hold or increase value over time. Whether this is true for either diamonds or wireless spectrum is up for debate. 

Fierce Wireless recently reported on the conclusion by MoffettNathanson analyst Craig Moffet during PCIA's Wireless Infrastucture show, that the value of spectrum is not necessarily increasing. He said during his keynote that spectrum is not a simple commodity, and it's almost impossible to predict what will happen to its value during the 600 MHz license auctions next year.  

Moffet based that conclusion, Fierce Wireless said, on the fact that buyers have paid a wide range of prices for spectrum over the past ten years, a trend likely to continue. 

What do you think: is a diamond forever? How about spectrum? 
Categories: , ,