- - Wednesday, September 13, 2017

Typical discussions of infrastructure policy revolve around roads, bridges, pipelines, ports and the like. These are critically important assets to our country and providing for their maintenance and necessary expansion should be a priority for policymakers. But there is no question that broadband networks are similarly important infrastructure, and that they play an increasingly vital role in fulfilling America’s economic and societal potential.

These networks are constructed using fiber optic and copper cabling, but more of the connections are now wireless, especially the “last leg” connection to a laptop, smartphone or consumer electronic device. Cisco predicts that 63 percent of all internet protocol (IP) traffic will come from wireless (Wi-Fi and cellular) devices by 2021, rising significantly from 49 percent of traffic in 2016. This is no surprise to the average American worker or consumer, who assumes Wi-Fi or LTE connectivity will be available virtually wherever they go, and who relies on that connectivity for an ever-increasing number of activities. These wireless networks we all depend on are only possible due to the availability of a finite resource — radio frequency (RF) spectrum.

The thoughtful and forward-looking management of our national spectrum resources must be a top priority for policymakers. The wireless needs of our nation have changed drastically over the last 20 years, with both Wi-Fi and cellular data blossoming from virtual nonexistence to essential services, while other wireless technologies such as Bluetooth, ZigBee, and LoRa have emerged as important Internet of Things (IoT) connections. Federal uses have shifted as well. Unfortunately, our rules and regulations haven’t entirely kept up with these changes.

As with any finite resource that is experiencing increasing demand, there is intense competition for spectrum. At the highest level, policymakers have to weigh governmental and commercial needs. There have been recent initiatives to open previously allocated federal spectrum for new commercial uses — such as the Citizens Broadband Radio Service (CBRS), which will enable shared commercial access to the 3.5 GHz band on a secondary and tertiary basis to the existing military uses. It is imperative that National Telecommunications and Information Administration (NTIA), Defense Department, and industry complete their collaborative efforts so that the FCC can authorize the CBRS band as soon as possible.

Another positive development was the modification of the Spectrum Relocation Fund (SRF) which allowed for reimbursement of federal agencies for research and development expenses related to clearing spectrum for auction. However, Congress needs to review and reassess its overall methodology for valuing the nation’s spectrum. Currently, the Office of Management and Budget (OMB) only assigns a value to commercial spectrum if the access rights to that spectrum are sold as a license at auction. This valuation model has a pervasive impact throughout the policymaking process, reflected in places such as the approved uses of the SRF wherein only spectrum sold at auction may result in reimbursement to the federal entities who made it available. This model ignores the immense value of unlicensed and permissive-use spectrum, and results in them being overlooked, or less-preferred, during the policymaking process. Unlicensed spectrum is used by technologies such as Wi-Fi, Bluetooth, and recently introduced Unlicensed LTE services. According to a Telecom Advisory Services report, the annual U.S. economic activity associated with unlicensed spectrum was valued at $222 billion in 2013, and is estimated to have increased to $547 billion in 2017. Yet, according to OMB, this spectrum has zero value.

For additional perspective, consider Cisco’s market data, which shows that unlicensed Wi-Fi carried 16.8 times as much traffic as licensed cellular services in the United States during 2015. Congress and OMB ascribe great value to licensed spectrum, but no value to the unlicensed spectrum which is carrying the vast majority of our nation’s wireless traffic. This needs to change.

A key reason that unlicensed spectrum has been such a boon to the American economy is that it enables innovation. As Federal Communications Commission Commissioner Michael O’Rielly once said, “What I love about unlicensed is that you don’t know what you’re going to get out of it.” Indeed, when policymakers and regulators allow open access to spectrum, as with unlicensed and CBRS, it allows our brightest minds to develop all manner of products and services, and lets the market determine the winners. This is another area where CBRS is breaking ground, in that the framework supports new commercial uses on both an exclusive (licensed) and a permissive (quasi-unlicensed) basis, and allows free-market forces to determine the exact allocation of the spectrum to each of those uses. This is a significant advancement from the traditional static allocations (licensed or unlicensed) via government fiat, and policymakers should consider these types of dynamic frameworks for future spectrum designations, alongside the existing options. Realizing the opportunities presented by the open access of CBRS, a broad alliance of companies is working to bring private and neutral-host LTE solutions to all types of vertical industry markets, which hadn’t previously had this option.

If America is to meet the broadband infrastructure needs of the upcoming decades, we must have spectrum policies that reflect the value and contributions of all spectrum types, allow for open innovation, and are responsive to a rapidly evolving wireless market.

Dave Wright is Director of Regulatory Affairs and Network Standards at Ruckus. He testified on these matters before the House Energy and Commerce Subcommittee on Communications and Technology in April. https://energycommerce.house.gov/hearings/facilitating-21st-century-wireless-economy/

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