The industry has come a long way towards developing the new platform for ICT communications:

1. Pre-4G networks that have demonstrated significant performance and capital efficiency improvements over 3G networks have been deployed.
2. The IMT-Advanced standards frameworks have been approved – LTE-Advanced and 802.16m, WiMAX 2, based on MIMO-OFDMA.
3. The preparation for widespread use of SDWN (Smart Distributed WBB Networks) technologies has taken place in the standards and early commercial implementations of SONs and distributed architecture deployments.

What differentiates 4G and beyond from prior network technologies is the use of frequency domain technologies that enable a new pathway for organization of networks. This will improve bandwidth density performance by a factor of up to ten times the level of 3G. It is good to witness the advanced MIMO-AAS, multi-carrier and architecture methods being pursued broadly across the industry: 802.16m, 3GPP Rel 10 LTE-Advanced and 802.11ac as well.

What confounds these efforts, particularly for 802.11 and 802.16, is gaining access to spectrum of sufficient BW and quality. The mobile industry has gained more access to spectrum and capital with which to deliver the vision of 4G networks.   However, a significant contributor to the success of current wireless networks and devices is the off-load capability of 802.11 Wi-Fi.

The huge success of the mobile phone industry and need for access to licensed spectrum and capital to build nationwide managed networks has led to consolidation in the hands of a few operators in most parts of the world. The situation in the US shows that despite efforts by the FCC to set rules on licensing and encourage smaller operators and aggregations, spectrum has nonetheless been acquired in the initial auctions or later consolidated by the top four operators. This may soon be reduced to the top three as a result of AT&T's acquisition of T-Mobile.

This has raised a high level of concern and should instigate some fresh thinking regarding how to go about making spectrum available in the most efficient and thorough way, while increasingly innovation and broad economic opportunity.

Incumbents Strongly Argue the Case for Licensed Network Dominance

Operators argue that their control over spectrum has resulted in widespread use and industry development. The role of consolidated licensed operators has been necessary to assemble the skills, organized operation, and the several tens of billions of dollars of capital needed for large-scale deployments. Furthermore, past auction results show that small or localized operators have not developed the critical mass needed to deliver similar levels of products and services. Large national operators are needed to deliver the broad fabric of increasingly complex services that will be developed on the 4G ICT platform.

On the other hand, practical experience and detailed studies show that while mobile networks occupy the majority of available spectrum, the results in terms of both utilization of capital and spectrum has been sub-par compared to Wi-Fi. This is, perhaps, a startling claim: mobile/ICT networks and Wi-Fi are very different types of networks. Nonetheless, Wi-Fi has come to be almost universally adopted because it has proven of great benefit.

Considering that Wi-Fi has been allocated a band of global spectrum that has been called 'junk spectrum' because it falls in with use of portable phones, microwave ovens, and other interferers, and studies show that managed spectrum access is technically more efficient (less signaling overhead than collision based MACs), Wi-Fi has delivered incredible performance. The simplified reasons for this are: 1) the cost of installing Wi-Fi is low due to low equipment cost and low-cost deployment. 2) The use is naturally organized on a microcell architecture that makes extended reuse of the spectrum. 3) Management and maintenance costs are low compared to large-scale networks despite their size advantage. It can be argued that some costs of Wi-Fi are hidden: people may spend considerable personal/company time that is ignored in a comparison. However, costs are significantly counter-balanced by the similar time spent for 3G-4G.

Wi-Fi also stands out in efficiency of spectrum utilization, particularly when measured on a bit/Hz/area saturation/time duty cycle basis. Studies in the US by the FCC as well as overseas demonstrate that Wi-Fi achieves 2X-5X better utilization of spectrum. What makes this even more remarkable is that the spectrum used is 2.4GHz: while good for implementing MIMO and having high reuse factors due to limited penetration of signals and range, the use is conflicted by short range, signal loss due to foliage, precipitation, and low power limits.

Technology advancements will help to achieve higher bandwidth throughput, extended range/multi-hop range, and self-organized and ‘smart networking’ capabilities that increase the range of applications for Wi-Fi and 4G network technologies.

While we appreciate the benefits delivered to operators and users by Wi-Fi, we think the industry can go beyond that in the use of paired licensed-unlicensed network technologies using specifically allocated spectrum and clear rules.

What we hope to see is more spectrum to be ordained by regulators for unlicensed/quasi-unlicensed use. What makes the most sense is for a new paradigm of spectrum licensing to develop: co-allocation and development of joint licensed and unlicensed bands. A crude but effective precedent for this is the harnessing of Wi-Fi as the low cost, prolific, and easiest way operators have found to offload the tremendous ramp in broadband demand. If only regulators and industry would plan for similar availability of spectrum and development with the unlicensed portion serving longer range, say up to 2-5 kilometers in normal operation, this would address problems we now face in rural access, achieving world-competitive rates and bandwidths, and stimulating high level of innovation. This would assure a higher level of competition and openness of access with less need to for detailed regulation and policing. The licensed portion of spectrum could be allowed to use aggressive QoS mechanisms and higher specialization needed to fulfill needs of vertical markets and applications while the quasi-unlicensed portion can be commercially ‘self-organized,’ with fundamental open access as the frontier for new stakeholders.

The development of framework technologies for use dual-MAC networks and devices has come far enough to make this a near-term possibility under enhanced LTE-Advanced and WiMAX 2 standards.

The benefit of this approach has more to do with the harnessing of business and user models than technology. The technology is here. While we face many opportunities, government regulators and the industry must figure out the best way to further all segments of ICT industries, and fan the flames capital and spectrum efficiency that are foundational to US and worldwide prosperity and ecology.
MARAVEDIS is a leading analyst firm focusing on 4G and broadband wireless technologies and markets.
Author: Robert Syputa, Partner & Strategic Analyst