Unlicensed wireless: More uses on the way

The use of unlicensed radio spectrum in the U.S. is about to expand from Wi-Fi devices running wireless home networks to mass-market services, including a broadband alternative to cable and DSL and an alternative to cellular phones, according to a group of wireless experts at a discussion of unlicensed wireless technologies at the U.S. Department of Commerce Tuesday.

Internet service providers are already using unlicensed radio spectrum to offer broadband access to customers in rural areas, including parts of Iowa, Illinois and other states, and some panelists at the Department of Commerce forum predicted that mobile phones would soon have 802.11 chips to allow voice communications over unlicensed radio spectrum.

But the forum, which focussed on the potential of unlicensed spectrum, as opposed to licensed spectrum owned by cellular service providers and other companies, had its dissenters. Cellular providers said U.S. regulators shouldn’t rush too quickly into opening up large chunks of the radio spectrum to unlicensed uses. Technologies using unlicensed spectrum have many limitations, other critics said.

A Spectrum Policy Task Force report, released by the U.S. Federal Communications Commission in November, calls for the FCC to move away from a “command-and-control” model of managing spectrum rights, in which spectrum uses are limited based on regulatory decisions, to a combination of an unlicensed “commons” model and a licensed “exclusive-use” model, in which licensees have exclusive and transferable flexible use rights. The report is available here.

On Thursday, the FCC will consider making additional spectrum in the 5-GHz band available for unlicensed wireless uses.

Brian Fontes, vice president of government relations at cellular provider Cingular Wireless, jokingly called the lure of large chunks of unlicensed spectrum “eye candy” or “crack cocaine” for regulators at the FCC.

“You are losing the focus on creating the proper balance between the allocated and licensed versus the unlicensed (spectrum),” Fontes said. “You’re talking hundreds of megahertz, and maybe thousands of megahertz of spectrum for unlicensed use. Where is the comparable amount of spectrum available for commercial uses?”

Fontes compared business models based on unlicensed spectrum to overhyped dot-coms, with some ideas that will succeed but the “vast majority” of which will fail. “How does all of this fit into the business model?” he asked. “All of these (services) have to be in the context of a business.”

But Ed Thomas, chief of the FCC Office of Engineering and Technology, questioned whether changes in the FCC’s direction would improve the process. “At the end of the day, the question is, Is it working?” he said of spectrum policy. “It ain’t broke … and there’s no fact that says changing the rules for a model that’s presently working will result in a better model.”

Others at the forum trumpeted unlicensed spectrum as a way for new services to come to market quickly. Neil Mulholland, CEO of Prairie iNet, said his company is already using unlicensed wireless spectrum to provide broadband access to 120 communities in rural Iowa and Illinois.

But Theodore Schell, a general partner in Apax Partners Inc. and chairman of Wi-Fi access provider Cometa Networks, said he was “skeptical to the extreme” that Wi-Fi would work as a broadband solution serving large geographical areas other than in rural parts. The cost of scaling such systems, plus problems with loss of service in wooded or hilly areas, make Wi-Fi best used over limited ranges, he said.

Others had even more ambitious goals for Wi-Fi. Thomas Lee, managing director of wireless services for J.P. Morgan Chase, predicted that Wi-Fi powered phones would become popular within a couple of years, especially with young consumers used to getting low-cost music on the Internet. “This is an opportunity for a consumer to pay virtually nothing,” he said of phone service provided through Wi-Fi receivers.

Others were skeptical of widespread Wi-Fi phone use, questioning if users would be willing to hunt for wireless hotspots to get phone connections outside their homes. Voice quality issues may also hold back voice-over-IP over wireless networks, said Mark Whitton, CTO of wireless networks at Nortel. “As a primary method for voice communications, I think it’s a difficult sell,” he said.

Lee predicted the main benefit of unlicensed wireless services would be to drive down the cost of competing services such as DSL or cable broadband Internet access.

Asked what the FCC and Department of Commerce’s National Telecommunications and Information Administration can do to make life easier for wireless providers, most at the day-long forum asked for certainty from regulators.

Kevin Werbach, founder of the Supernova Group, which organizes conferences on decentralized technologies, called on the FCC to set up minimal regulations, then get out of the way and let the market and technologies hash out how to play fairly with each other over the wireless spectrum.

“If the rules are too strict, if the rules are too much about the way spectrum is used, they increase inefficiency,” he said. “If the rules are too minimal, we don’t have some baseline that protects against issues of interference. … As long as we have a minimal set of rules that does that, let people come up with solutions to our problems.”