Transcript Collective usages and allocation of spectrum (CUS)

Simon Forge
SCF Associates Ltd
All rights reserved 2008
1
Agenda
•What do we mean by collective?
•Demands and rewards
•Why do we need collective spectrum – the business case
•The Economic aspects
•Economic balance between approaches
•Stimulating the EU economy
•Achieving collective operation in the EU
•The technical aspects
•Means to an end
•Barriers and catalysts
•A strategy for usage – when how where why
•A strategy for combination – mix n’ match models
•Criteria for usage
Simon Forge
SCF Associates Ltd
All rights reserved 2008
2
What do we mean by collective? - forms of spectrum allocation
Governments and regulators have essentially four choices before them:‘Exclusive
Use’
models
‘Sharing’
models
•Managed – command and control – delegation of central authority
•Markets – and secondary markets – the property owning model
The commons – unlicensed spectrum and use of open source software
concepts for any user for any purpose. Uses technological developments
for sharing of spectrum. Questions whether spectrum can even be
considered as a resource, let alone a scarce resource.
A mixed or collective approach – any arrangement for multiple
simultaneous users in same geographic area and spectrum range.
Includes sharing spectrum in the commons and by overlap and ‘white
space’ or ‘hole filling’ (dynamically) in other traditionally occupied
spectrum regions, relying on technical developments to balance the
need for the property ownership –
But which choice will maximise economic growth?
Simon Forge
SCF Associates Ltd
All rights reserved 2008
3
Is the crowded spectrum all a myth? Is it really free for all ?
RURAL UK
On average, only slightly more than 5% of the USA radio
spectrum is used nationally at any given time.
Heavily
used
McHenry, Mark A., NSF Spectrum Occupancy Measurements Project Summary, 15 Aug. 2005, Vienna, Va. USA,
Shared Spectrum Company.
SUBURBAN UK
DENSE URBAN UK
Unused
Spectrum utilisation studies in USA and by UK’s Ofcom have investigated the degree
of usage of the radio spectrum; they indicate many areas of the radio spectrum are
Source: OFCOM /Dettmer R, ‘Up the revolution’, IEE Review, May 2005, p. 44
not fully utilised.
Simon Forge
SCF Associates Ltd
All rights reserved 2008
4
A conceptual sea-change about spectrum economics
- Gradually, we must question whether spectrum is an ownable asset
- Is it just an intellectual construct* whose utility is rapidly decreasing as
technology develops?
•Regulatory proposals based on spectrum as a physical asset denominated by
frequencies artificially constrain mechanisms that exploit this ‘super’-commons,
producing economic inefficiencies
•Moreover the property model invokes the tragedy of the anti –commons ** - whereby a
scarce resource is prone to under-use because multiple owners are each endowed with
the right to exclude others
•A better approach is to draw on usage privileges that do not presuppose ownership, for
a universal communication right, allowing anyone to transmit anywhere, at any time –
and that this is the baseline rule for wireless communication
•The commons model refocuses wireless regulation away from the ether as scarce
transmission medium and toward the devices used for communication.
•Unlicensed bands such as Instrument Medical and Scientific are a useful model
*EG see : Kevin Werbach, Supercommons: Toward a Unified Theory of Wireless Communication, Texas Law Rev., Vol. 82 P.863
(2004) **see Michael A. Heller, The Tragedy of the Anticommons, 111, Harvard Law Review 621, 623 (1998)
Simon Forge
SCF Associates Ltd
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The principles of a collective use of spectrum as a layered
architecture of ownership
Legacy mechanisms
Primary ownership
Sole usage
(safety of life)
restricted to
public services
Sole usage
(Command & Control
selection - beauty
contest etc) private
operators lease
public holdings
Secondary
ownership
Sole ownership
Public owns
Auctions, lotteries,
Markets & trading
of a purchased licence
by private operator
Licence-exempt
free Commons
-any user,
any usage
Subletting type
Sharing
‘Borrowing’ type
sharing -
- Commercial terms
agreed or involuntary
Co-existence
mode
Collective Usages
Simon Forge
SCF Associates Ltd
All rights reserved 2008
6
Agenda
•What do we mean by collective?
•Demands and rewards
•Why do we need collective spectrum – the business case
•The Economic aspects
•Economic balance
•Stimulating the EU economy
•Achieving collective operation in the EU
•The technical aspects
•Means to an end
•Barriers and catalysts
•A strategy for usage – when how where why
•A strategy for combination
Simon Forge
Forge
Simon
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Associates Ltd
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SCF
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rights reserved
reserved 2008
2008
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77
The value of spectrum in one EU country which follows a market
policy for auctions and secondary market resale (Ofcom’s view of the UK)
16 mn Euro
VALUE in ‘000 Euros/MHz/year
1500
700
150
Aeronautical
Terrestial
Radio
Terrestrial
TV
Fixed links Defence
& Emergency
Maritime
Private PMR
2G mobile
Other
3G Mobile
(Taxis) Source: Dettmer R, ‘Up the revolution’,
IEE Review, May 2005, p. 44
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SCF Associates Ltd
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Why do we need collective spectrum – the business case
Needs analysis - new uses for new radio:•Basis for social collateral - higher quality medical & elderly care at far lower cost
•Diverse industrial usages - manufacture, logistics/retail ( from RFID on)
•Social and quality of life benefits – constant contact – EU migratory work patterns –
juggling multiple lifestyles/workstyles
•Modes of use in consumer/ professional products –Internet concepts of open usage
“ONLY TRANSCEIVE”
The value to the EU:•Job creation, in knowledge worker segments
•GDP stimulation from productivity spillover effects – 0.1% - 0.2% ?? - & GDP/head
•GDP stimulation directly in revenues and product sales - already 3% of EU GDP
comes from mobile in some way (GSM-E)
•GDP stimulation long-term, by new industries, technologies and service innovation
•Mobile Price rebalancing – the new business model for e-communications
(Internet) and the economic stimulus (0.05 -0.1% ??) of lower costs
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The commons as economic driver –
the commons provide
Operators - services provision - revenues, SCF projected time
series estimate
Suppliers/distributors - hardware (handsets), software, networks,
content, estimate based on 2004 ratio [2]
Economic output per MHz at 900 MHz [3]
Economic stimulus of mobile working, cumulative
driving effect of mobile productivity to 2020 [4]
Indirect stimulus to the economy by spend of direct impact
revenues in other sectors:•User surplus - Social and economic value – difference between
what paid and prepared to pay
•Producer surplus – difference between margins to stay in
business and margins actually achieved
Novel usages in Health, Elderly care, E-comms networks, RFID etc
Direct stimulus in sales, of products and services
Indirect stimulus on other parts of the economy
Indirect stimulus by spend from sector
Employment in sector
Employment stimulated by spend from sector
Economic significance
for EU
Mobile
Licenced
€208B,
2007
€87B,
2007
€168 m,
2006
TV
Collective
‘Licence’ / Licence
Exempt
€43B,
2005[1]
€30B,
2006
€ 28 m,
2006
0.6% GDP Negligible
Growth
€165B,
EU-27
2007 [5]
€95B [8]
TBD
TBD
Significant
LOW
V. LOW
0.5 m [6]
0.4 m [7]
2.3 m
1.8 m [9]
TBD
TBD
Sources : 1 OFCOM, 2006; 2 CEBR, 2004; 3 Vodafone/OFCOM, 2006; 4 M. Maliranta & P. Rouvinen, 2006; 5 Extrapolation from
R. Mourik, 2003 ; 6 GSMA, 2004 ; 7 J. Cardona, 2002; 8 Estimate, OFCOM study, Europe Economics, 2006; 9 Pro rata estimate
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SCF Associates Ltd
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Why do we need collective spectrum – the business case
Comparing the value to the EU of a commons with the markets based approach
Licensed – more likely usages
Licence- exempt – more likely usages
•Mobile services - cellular
•TV /radio entertainments & ads
•Fixed radio local loop
•Mobile services – non-cellular /cellular
•Fixed radio local loop
•Innovation in radio-based services
•Health
•Elderly care
•Service sector and Industrial
processes
•Innovation in radio-enabled products
using ICT based models
Repricing impacts on existing services
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SCF Associates Ltd
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Catalysing maximum economic growth
Spectrum
management
method
Administratively
Managed command and
control
Innovation Effect
•Low innovation and glacial
pace of introduction
•Incumbents protect territory
Economic Growth Impact
(GDP growth and jobs)
•Low opportunities for new job
creation as unlikely to seed new
industries, segments or
competition
Markets – and
•Low/medium and slow –
secondary markets must return investment from
•Higher than command and
control
last generation – the 3G
•But medium/large sums required
affect.
imply slow release of general
•Spectrum bought to shut out economic benefits as a series of
or slow others/new technols large-scale builds
The Commons
•High – fast and easy entry
as little or no red tape
High if and when technology
appears for sharing effectively
Mixed or collective
approach
High – as low barriers to
entry and can share outside
commons
High – opportunity for new
products/services and secondary
spillover effects
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SCF Associates Ltd
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Stimulating the EU economy - measuring spectrum management
methods against Economic success factors
Command
and
control
Markets &
Trading with
exclusive usage
rights
Commons
with
appropriate
technologies
Collective approach –
Commons/Markets/
C&C & ‘co-existence
techniques
Promote competition (in services, infrastructures and
technologies)
-
+/-
++
++
Incentive to invest in new technology & equipment
-
+
+
+
++
++
-
+
++
++
+/-
+/-
+
++
More flexibility in spectrum usage to overcome
“scarcity” - create a friendly environment for innovation
-
+
++
++
Empowering spectrum users (the market players) to
decide upon usage as much as possible
-
+
++
++
Prevention of abuses of market power/ monopoly
+/-
-
++
++
Promotion of social interest factors eg cultural diversity,
public/minority interests
+/-
+/-
++
++
Maturity of technology - feasibility of full usage of new
sharing technologies in the near-term
++
++
-
+
+
-
+/+
+
+
+
+
++
++
++
Economic- social Factors
Promote new services
Promotion of spectrum neutrality – technical and
application service - flexibility for any service or
technology
Promotion of broadband access in rural areas
Resolve single market and harmonisation issues
Control interference to single frequency technologies
Adaptability to novel technology development
Key :
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Positive force +
SCF Associates Ltd
;
Negative impact - ;
Neutral effect +/- ;
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Strongly positive ++
13
Agenda
•What do we mean by collective?
•Demands and rewards
•Why do we need collective spectrum – the business case
•The Economic aspects
•Economic balance
•Stimulating the EU economy
•Achieving collective operation in the EU
•Technical aspects - the means to an end
•A strategy for usage – when how where why
•A strategy for combination
Simon Forge
SCF Associates Ltd
All rights reserved 2008
14
Growing demand for radio usage means the spread of
•New technology which:- allows transparent overlap of multiple
signals (direct spread spectrum)
- reuses ‘occupied’ spectrum - adapts and
compensates with cognitive radio/SDR
•More Unlicensed bands in breadth and number
•More sharing – explicit agreements or unknown
borrowing
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SCF Associates Ltd
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Technologies that could change how spectrum may be allocated
•Software Defined Radio (SDR)
•Cognitive radio (CR) and the white space / ‘borrowing’ opportunity
•Sharing concepts of underlay and overlay- direct spread spectrum and UWB
•Spatial multiplexing using multiple-input, multiple-output (MIMO) beam forming
•Mesh and ad hoc networks – self organising, self optimising – coverage
extension
•Compression: coding of digital signals in less bandwidth
•Bit rate encoding: number of bits per Hertz of bandwidth transmitted
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SCF Associates Ltd
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Methods of sharing for ‘Collective use’
True sharing transparently
-advanced signal processing
Spectrum utilisation efficiency
Hi
Interstitial
- White spaces
- Dynamic temporal (CR)
Underlay and overlay
UWB
Lo
Short range
low power
(?High freq?)
Spatial/ directional mux
(mesh/MIMO)
Transparency
= 1/interference
probability
Low
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SCF Associates Ltd
High
transparency
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Radio advances to meet demand for spectrum
•Highly spread signals (‘code’ or spread spectrum) such as UWB
•Cognitive Radio – dynamic adaptive co-working (‘time’)
•Smart Antennae – directionally muxed MIMO channels
•Mesh Networking – self organising (‘space’)
Code
Time
We can multiplex in (at least) four orthogonal
dimensions
Direction
Space (cell/domain)
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SCF Associates Ltd
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Radio prolongation of wired access point
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SCF Associates Ltd
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A strategy for usage – when how where why to use what
– Legacy command and control
– Legacy markets based
– Shared/ co-existence
– Commons
– Leads to A strategy for combination …..
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SCF Associates Ltd
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A strategy for combination – mix n’ match models – how to
Needs several components•A strategy for living with legacy models of allocation:•Respect existing licensing agreements in terms of bandwidth allocated in
medium term
•Extend licences with sub-let permission clauses (market and public service)
•Open guard bands where necessary to white space sharing
•Examine reform of existing allocations where technology enables more efficient
usages (eg military and ATC primary radar)
•A strategy for Introducing CUS models in a regulated manner :–
•Introduce new rules for co-existence in each part of the spectrum – sub-lets,
borrowing, white space and guard bands
•Introduce EU-agreed commons bands and mechanisms for co-existence with
type testing and monitoring, specifically in UHF region (above 4GHz less of a
problem)
•A strategy for co-existing - CUS together with legacy models: progressive
developments of CUS application – and how much to give to each type of
usage
Simon Forge
SCF Associates Ltd
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Projections of Percentages of each type of spectrum
allocation in the EU
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SCF Associates Ltd
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A strategy for usage – How much to give to collective usages
Criteria
Market
National Technology Social
General EU
Demands* priorities development priorities Economics
Command & Control
Market based approach
Collective Sharing subletting
Collective - Commons
Collective Sharing –
borrowing impacts
* Latent or expressed
- Leads to a strategy for unlicensed allocation - and whether pro-active
or trails demand
Simon Forge
SCF Associates Ltd
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A strategy for usage – who is responsible?
• Central accord (EC-level) on bands for an EU commons across all MS
(eg a first 20 MHZ in Digital Dividend)
– Member State ratified and implemented
• NRA/MS extensions of licences (commercial and public service) for
– Sharing by subletting as formal contract
– White space agreements if acknowledged use - eg in guard bands –
requires official interference testing
– White space type-testing if ‘free’ use, and monitoring
– Type testing for CR dynamic seizing or ‘borrowing’ if tacitly
acknowledged
• Leads to a blueprint for a new spectrum management structure and
strategy for NRAs and EC-level spectrum management, with an EC
facilitator/co-ordinator
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SCF Associates Ltd
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General Implications for EU regulators – NRAs mainly, with
EC co-ordination and guidelines where useful
a) Reshape existing licences (for all management types)
 subletting clauses added
b) Public services - command and control licences
 incentives to sublet/share added
 Incentives to relinquish spectrum for commons emphasised
 Technical audits of efficient usage in periodic reviews for those with
mandates to spectrum
c) More “active” regulatory role in deployment of radio technology:


National interference monitoring continually
Type testing laboratories and rigs for interference level conformance,
for pre-set power and frequency specs
Greater international participation and agreements at technical level
d) Gradually, less regulatory activity in commercial licence markets for
auctions and trading possibly
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SCF Associates Ltd
All rights reserved 2008
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The next step : further estimating the economic impacts of
spectrum allocation approaches
Create
scenarios
to outline main
economic
impacts of each
allocation
mechanism, for
first directions
of economic
impacts
Analyse
each scenario
using
economic
impact
estimation
approach
and compare
results
(via Tri-level
economic
aggregation
Micro-Mesomacro)
Include
impacts of
the e-factor*,
the
tele-economy*,
on results,
and
specifically
on social
overhead
capital
*Following World bank study on models for long-term impacts of new technology and specifically ITC developments at a global level, 2000
and also impacts of near-zero pricing on demand
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SCF Associates Ltd
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Spectrum allocation will advance with demand for ubiquitous,
pervasive services with new radio access techniques
Markets with
administration
State
Allocation
World
•Command &
control
•Broadcast
•Military
1911
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SCF Associates Ltd
•No sharing
•Auctions
•Spectrum trading
•Property rights
•Legislative
managed
command &
control
•Circuit switched
1983
Open
World
•Unlicensed
bands
•Collective
shared usage
•Packet Radio
•Broadband
•Markets
2015?
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27