The FCC needs to consider critical dynamics of wireless technologies in its 6 GHz proceeding.
The answer is somewhere in between zero and 100 percent. A spectrum license allows its holder to operate within a portion of the radio spectrum with interference and crowding, a quality of service enabled for a fee. Unlicensed uses enjoy the spectrum freely but makes no promises about congestion; an inefficient user can hog the space. The FCC allows some to operate in specified bands without licenses, for example low power baby monitors and garage door openers. The killer app of unlicensed spectrum is Wi-Fi. To date, the FCC has allocated roughly 1000 MHz below the 6 GHz band to unlicensed, and recently proposed another 1200 MHz in the band itself. However, the many existing users of the band—public safety, positive train control, natural gas and oil pipelines, electric grids, and breaking news—are reluctant to be encroached. The FCC believes that interference mitigation technology, Alternative Frequency Coordinator (AFC), can allows unlicensed uses over top of licensees. Here are some approaches to evaluating how much spectrum should be unlicensed.
Scientific Method: Test and Learn
Richard Bennett, co-inventor of the first Wi-Fi standard, observes that Wi-Fi needs more and better spectrum than it has, though he does not believe that the 6 GHz band is necessarily the best location for expansion. His recommendation is to test the sharing concept with 480 MHz of the 6 GHz band, evaluate its performance, and then improve the proposed mix of unlicensed spectrum in suitable bands. It’s a reasonable approach given the many users, risks, and the sheer size of the proposed allocation. Moreover Wi-Fi 6 promises a quantum level improved efficiency and could further change the optimal spectrum allocation.
Economics: what is next best use of the spectrum?
A rational economics perspective suggests that all spectrum be licensed; allowing scarce resources to be allocated to their highest and best use and maximizing revenue to the public. However, as spectrum markets are imperfect, policymakers evaluate qualitative tradeoffs between unlicensed and licensed spectrum for the technologies and business models they enable. Wi-Fi and licensed mobile wireless such as 4G and forthcoming 5G contribute several hundred billion dollars to the US economy annually. The Wi-Fi Alliance, a powerful trade organization of more than 800 global companies, leads the 6 GHz effort and touts that its technologies add $500 billion. However it has never cut a check to the US Treasury for the use of the public airwaves. By contrast, licensing spectrum has added $117 billion to the public’s coffers, valuable revenue for public safety, rural broadband, and other social uses.
Now, policymakers need not choose one technology or the other for the band; the cellular wireless industry offers to split the spectrum evenly, purchasing the rights to the upper portion of the 6 GHz band for an estimated $20 billion, compensating incumbents to repack nearby, and making the lower portion of the band available for unlicensed. The FCC has allocated a scant 70 MHz of mid-band spectrum, the essential frequency for 5G, but the power limits for the CBRS band are too low. Lack of sufficient licensed spectrum for 5G is a critical concern for national security and international competition, as China has allocated 700 MHz in the band for 5G; Japan, 1000 MHz. Moreover, licensed spectrum is required to win the global race to 5G. The C-Band proceeding which attempts to allocate 280 MHz is not finalized, and if it is deterred for some reason, then US will have no mid-band spectrum in the pipeline and will likely lose the 5G race.
Free market advocates observe that regulation is inherently political, and the FCC’s exercise of spectrum decision is a regulatory taking. Leading telecom economist Tom Hazlett describes how the 1927 Radio Act was promulgated because policymakers of the day did not understand spectrum markets and preempted the common law property rights regime that emerged on its own. This approach suggests that there would be no FCC to make spectrum decisions.
The Wi-Fi Alliance claims that that the industry’s future requires its access the entire 6 GHz band, and that it will need an additional 1500 MHz by 2023. Given its tremendous spectrum needs, the group could consider other solutions. For example, a spectrum consortium which purchases spectrum on behalf of its members and ensure quality of service, security, and so on. In fact, specialized firms perform these services already. Moreover, Wi-Fi Alliance members like Google, Microsoft, and Amazon are sophisticated spectrum users with their own network strategies and mountains of cash. They could purchase spectrum to ensure the delivery of their services.
There is strong consensus that at least some portion of the 6GHz band should be made available for unlicensed. Testing the efficacy of Wi-Fi 6 is reasonable, and 500-600 MHz for unlicensed with strong interference protections would double the allocation of Wi-Fi spectrum available today. The FCC itself has additional tools to determine the optimal allocation of unlicensed spectrum. Its Office of Economics & Analytics was established precisely for these questions, and it offers credibility and transparency to FCC decisions by documenting assumptions and methods. There is no right answer to the question, but the FCC can improve its proposals. At the very least, the FCC must ensure that its vital 5G proposal is secure before it moves to unlicensed.