Secondary Spectrum Markets and TV White Space Offer Primary Benefits to Wireless Networks
By Rick Rotondo, CMO • Spectrum Bridge

The proliferation of wireless communications, especially wireless data/Internet, presents many challenges for network operators. The growth in usage of smart phones such as BlackBerrys and iPhones across business and consumer segments is driving the need to support high bandwidth applications, provide low-cost, high-capacity backhaul and accelerate the deployment of 4G solutions like WiMAX and LTE.
It is not just commercial or consumer oriented wireless networks that are facing these challenges. Organizations ranging from private enterprises, to public safety, utilities and education also must address increasing demand for wireless network access, bandwidth and backhaul. For some of these organizations, they may face the added burden of ensuring support of mission-critical applications, while also paving the way for new capabilities like simultaneous voice and data, and two-way, real-time video.

Antenna and systems professionals need to know how to capitalize on all available spectrum so that they are best positioned to leverage and profit from the burgeoning demand for wireless access and backhaul.

This article describes secondary spectrum markets and how they are helping to address the scarcity of available spectrum for a wide range of wireless networks. We’ll also cover the critical role that efficient secondary markets can play in helping equipment manufacturers, system integrators and others in the wireless ecosystem identify and acquire spectrum to enhance their solutions sales capabilities to grow market share and margins. Finally, you will see how antenna, radio and tower professionals can leverage unlicensed spectrum, TV white space channels in particular, to overcome the capacity and bandwidth challenges facing the majority of wireless networks, and profit from them.

In addition to explaining the key benefits of secondary spectrum markets, there are three other important concepts discussed including right-sizing spectrum purchases, repurposing spectrum and leveraging both unlicensed and licensed spectrum strategies in a network.

Secondary Spectrum Markets Overview
The primary market for spectrum is made up of spectrum allocated directly by the FCC to commercial, educational, public safety and other entities via a variety of methods, including competitive auctions that have raised billions of dollars for the United States treasury. Starting in 2002, the FCC began to aggressively encourage the growth of a secondary market, which allows spectrum holders to lease or sell their unused or underused licenses in an “after market.” Over the past few years, the FCC has continually expanded and liberalized secondary market policies so that over 5 GHz of existing licensed spectrum can be freely sold or leased on the secondary market.
However, activity within the secondary market has been primarily limited to what can best be described as "wholesale transactions.” Wholesale transactions are transaction in which entire spectrum licenses are sold or leased. This has disadvantages for both buyers and sellers. In many cases, buyers on the secondary market have had to acquire more spectrum than they really need. In order to address this and make secondary markets more efficient, the FCC allows licenses to be broken up or “right-sized” into smaller pieces so that spectrum can be more efficiently and cost-effectively allocated to new applications and services.

Right-Sizing Spectrum to Create Efficient Secondary Markets
Efficient secondary markets allow spectrum users to acquire the spectrum they need, while providing a simple mechanism for spectrum holders to monetize their unused or underused spectrum assets.

There are several ways that spectrum can be broken up to create right-sized offerings. Specifically, the FCC allows spectrum licenses to be partitioned, disaggregated and time shared.

Partitioning allows spectrum holders to break up licenses into smaller geographic footprints. This makes it easier for buyers to buy or lease the right amount of spectrum coverage to fit their needs. By creating a more customized product to fit the needs of a particular market or application, spectrum holders can realize higher $/MHz*Pop, while offering a better value to prospective buyers.

Disaggregation lets spectrum holders divide up licenses by channel, channel group or by frequency and bandwidth. The FCC now allows spectrum to be offered in any amount, including partial channels. A new concept promoted by the FCC can best be described as time sharing of spectrum. Time sharing now allows the creation of time-of-day and day-of-the-week leases for buyers who may have a spectrum need for a limited duration of time (on-peak or off-peak). Utility meter reading, overnight inventory updates, next day dispatch assignments can all be operated on a time shared basis. With time sharing, a single spectrum license can be shared and used by multiple networks every day.

In general, right-sizing helps match coverage and bandwidth requirements more exactly to a buyers application requirements. Right-sizing makes it easy to move beyond the wholesale mentality of traditional secondary markets and create spectrum offerings that offer more flexibility and affordability to buyers, while creating higher ROI for sellers.

Repurposing Spectrum to Support New Applications and Services
Another key concept that is helping drive the growth and size of the secondary spectrum market is “repurposing spectrum.” For example, just like the FDA tacitly allows innovative approaches to healthcare by allowing off-label uses for certain medications, the FCC has approved requests to repurpose spectrum originally allocated for a particular use (such as paging) for use by other more in demand services. Typically, the technology or business associated with this spectrum has been replaced by newer technology and services. As a result, major portions of these licenses may be substantially or completely idle as a result. Spectrum that fits in this category can typically be repurposed via a waiver process if the new service is deemed to be in the public‘s best interest by the FCC. Repurposing not only puts idle spectrum to work, it also increases the availability and affordability of spectrum, while solving scarcity issues in some overcrowded bands and market areas.

As demand for wireless services continues to explode, even right-sizing and repurposing spectrum may not be enough to meet future bandwidth and Quality of Service (QoS) requirements. Again, thinking outside the box may be called for in these situations ¾ particularly for network operators who believe that additional licensed spectrum is their only option. New unlicensed bands created by the FCC can be used to expand or supplement existing networks and, in some geographic areas, they offer sufficient bandwidth to create entirely new commercial broadband networks

Mixed Spectrum Solutions: Using Unlicensed and Licensed Spectrum Synergistically
Licensed spectrum users should also consider leveraging unlicensed spectrum to offload non-mission-critical traffic from their wireless networks. While unlicensed frequencies can be unpredictable in coverage, capacity and QoS, careful analysis and planning can mitigate the interference and reliability issues.

There are several scenarios to consider when determining whether the use of unlicensed spectrum makes sense. First, sufficient unlicensed spectrum needs to be in the same coverage area as the licensed band if it is to be used to increase network capacity. Overlap does not have to be 100 percent in order to make this an effective strategy. A good example of this is how cellular carriers are now embracing WiFi hot spots to off-load smartphone broadband traffic from their core cellular networks. This lets bandwidth intensive applications leverage high-capacity WiFi network when sending music, data and videos. By embracing the concept of mixed spectrum (and technology) networks, cellular carriers are able to offload significant capacity onto relatively inexpensive network infrastructure and free up valuable licensed spectrum for other users. In a similar fashion, many public safety agencies equip personnel with both cell phones and two-way radios to cost-effectively increase communications capacity. The two-way radios are reserved for mission-critical communications, while the cell phones are used for all other non-critical and backup communications.

Although the 2.4/5.8 GHz WiFi and 900 MHz bands are the most well known and established unlicensed spectrum plays, a new contender worth watching is the recently available TV white space. TV white space consists of the channels freed up by the digital TV transition completed in June 2009. The spectrum includes various 6 MHz channels from about 54 MHz to 700 MHz. This spectrum is prized for its propagation and building penetration characteristics.

Although the FCC has made this spectrum available for unlicensed use, there are several stipulations that can substantially affect the amount of usable TV white space spectrum in a given area. A site called ShowMyWhiteSpace.com offers a free search tool that makes it easy to see how much TV white space spectrum is available in your area. The site also provides an overview of TV white space and has links to important white space news and FCC documents.

As of this writing, the FCC has not finalized equipment certification or usage rules for TV white space, but expect to see white space equipment trials being deployed under experimental license permission soon. Once the FCC finalizes its white space rules, commercial TV white space network equipment could begin to appear in the following 12 to 24 months.

Identifying, Obtaining Licensed Spectrum on the Secondary Market
Spectrum brokers have supported traditional secondary markets and provided a way to link buyer and seller. They often specialize in specific regions or frequency bands. Although they have provided an important service, just as with any manual and high touch trading method, they do not offer the same transparency or visibility into availability and prices that is inherent in today’s modern electronic trading systems.

To address these and other issues, Spectrum Bridge created SpecEx.com, the online marketplace for spectrum. This online platform makes it easy to move beyond the static, wholesale mentality of the past and offers more flexibility and transparency to buyers, while creating higher ROI for sellers. Besides creating an efficient and more cost-effective spectrum trading vehicle, SpecEx also offers the largest inventory of available spectrum licenses in the industry. A point-and-click Web-based interface makes it easy to find and acquire the right spectrum. In addition to its inventory of available licenses, the site also offers a host of spectrum and market research tools that help both buyers and sellers make more informed decisions. Finally, SpecEx facilitates on-demand leasing, a method by which network operators can lease spectrum to meet temporary or long-term capacity and coverage needs.

Efficient Secondary Markets Benefit the Entire Wireless Ecosystem
Secondary markets, combined with right-sizing spectrum and leveraging unlicensed alternatives like white space could offer the bandwidth and affordability needed to address issues related to spectrum scarcity. They are critical for network operators who are undertaking efforts to optimize today’s networks, while also providing an avenue for enhancing 3G and 4G networks so that they can support the applications of tomorrow.

Efficient secondary spectrum markets also allow for more efficient use of scarce spectrum by putting idle spectrum back to work. Expanding spectrum capacity by utilizing practices like partitioning and disaggregation along with efficient electronic trading platforms like SpecEx provides an agile alignment of supply with marketplace demand. Spectrum can be freed up for a range of new and existing needs, while providing the economic incentives to current spectrum holders to do so. In addition, creating a successful secondary market for spectrum brings real benefits to the entire value chain of the wireless ecosystem, allowing:

• Spectrum holders to unlock hidden value from spectrum assets
• Enterprises, government agencies and other institutions that require interference-free, reliable licensed spectrum to purchase access to this spectrum when and where they need it
• Equipment manufacturers to open up additional markets by expanding addressable prospects beyond just a few carriers into a true mass market of new licensed spectrum users
• Value-added resellers and system integrators the opportunity to deploy differentiated solutions based on reliable and cost-effective licensed connectivity.

For antenna, radio and tower professionals, efficient secondary spectrum markets offer immediate opportunities to provide solutions to the new networks. Its benefits are summarized in this equation: More Spectrum = Network Growth = More Sales.

At Spectrum Bridge, Rick is responsible for planning and implementing the company’s technical marketing strategy. An engineer by training, he brings more than 20 years experience as a telecommunications professional to Spectrum Bridge. Prior to co-founding Spectrum Bridge, Rick was VP of marketing for MeshNetworks Inc, which was acquired by Motorola in 2004. At MeshNetworsk, he established the company as the ad hoc networking brand leader by working with partners, system integrators, analysts and industry associations. Rick can be reached at rick@spectrumbridge.com.

Click here for reuse options!
Copyright 2010 Webcom Communications Corp.