Solving the 'Spectrum Crunch': Unlicensed Spectrum on a High Fiber Diet

Perhaps the most consequential contradiction in telecommunications policy today is the gap between claims of a “looming spectrum crisis” and the reality that only a fraction of the nation’s prime spectrum capacity is actually in use even in the most congested urban areas. While unused spectrum capacity is abundant, there is little question that consumer demand for wireless data – and mobile carrier need for spectrum capacity – is growing far faster than the capacity of mobile carriers spectrum and infrastructure. Carriers utilizing the existing commercial wireless business model – based on exclusive licensing, high-power transmission, wide area coverage, very limited spectrum re-use, centralized infrastructure and metered billing – will continue to need more exclusive-use spectrum in the short-run to meet this demand. However, it should be equally clear that this model is not sustainable. As the FCC observed in its pending 3550 MHz band NPRM, while the Commission’s efforts have focused primarily on clearing bands for “traditional, exclusive licensing uses . . . it has become increasingly clear that such efforts alone will not suffice to meet the growing demand for commercial wireless spectrum.” Meeting the demand for mobile data will ultimately require a greater focus on shared and dynamic access to unused and underutilized bands. It is neither cost-effective nor optimal for consumer welfare to encourage an ultimately unsustainable model in which mobile data is transported predominantly over exclusively-licensed airwaves and carrier-provisioned infrastructure. Hybrid and heterogeneous networks – combining licensed and more short-range shared and/or unlicensed spectrum – are the most feasible solution to the increased demand for video and other bandwidth-intensive applications on mobile devices. Both spectrum re-use and backhaul will increasingly be more cost-effective at the edge of the network, closest to the end-user. The more than 5 million UK hotspots leveraged off the wireline subscribers of British Telecom is a case in point. It is critical to distinguish between truly mobile data demand (e.g., in a car or hiking in the woods) and nomadic data demand (e.g., streaming video in a home, office or public space). The primary drivers of data on mobile devices is increasingly nomadic and most efficiently offloaded onto wired local area networks (such as home or business Wi-Fi connections), rather than over exclusively-licensed spectrum to more distant carrier-provisioned infrastructure. As a result, spectrum efficiency and consumer welfare would be optimized by hybrid networks that carry most wireless device data over short distances, at low power, using virtually unlimited unlicensed and shared spectrum capacity within and between wireline local area networks. As the PCAST recently recommended with respect to Federal bands, accomodating pervasive connectivity at affordable prices, while preserving competition in mobile markets, makes it imperative to pursue small cell spectrum sharing strategies in parallel with other efforts to increase the amount of exclusively-licensed spectrum available for more wide-area offerings.