Posts Tagged ‘Wireless Communications’

Back to the Future Station

Saturday, July 31st, 2010
Back to the Future Station

L - R: Carter, Neumann, Kii, Sato

On my recent business trip to Tokyo, I had the opportunity to have lunch with my good friend Hajime Kii and his family.  I know Kii-san from when he was a senior executive at NTT America and I was working at CITI at Columbia University.  Kii-san was kind enough to arrange a visit to NTT DOCOMO’s Future Station for me and WIK’s CEO Karl-Heinz Neumann while we were in town.  At its Future Station, DOCOMO presents a short film showcasing its high-concept vision of its product and service offerings for the near-term future.

I had mentioned to Kii-san that I had seen it in 2001 as part of a delegation from Columbia University including Eli Noam and Robert Pepper (now at Cisco Systems).  The 2001 version included a short film showed DOCOMO’s vision for wireless communications in the year 2010.  Eli and Pepper kept giggling and looking at me because the kid in the 2001 film was named “Ken”.  Now that it is 2010, I was clearly interested to compare the 2001 film to the 2010 version and to the products currently offered.

Well, aside from the fact that the kid in the film is now called Hiro, many of the ideas in the 2001 film have made their way into current products and prototypes.  After the film we got to tour their showroom.  Granted, the floating touch screens are still science fiction; however, products like ITS (Intelligent Transportation Systems), augmented reality, multimedia handsets, mobile commerce, and location-aware services have made it into their cool new handsets.  My favorite handset comes with a detachable QWERTY keyboard and a projection monitor.  One can use any Bluetooth keyboard (unlike my complaint with the iPhone) and can use the detachable projector to make presentations (movie screen not included).  We also were able to play with a protype handset which does augmented reality, allowing you to see what it would be like to have a new car (you can change the style, color, etc.) in your driveway.  Dr. Neumann was able to use one of display handsets to buy a drink from a vending machine and buy a Big Mac from a McDonald’s mock-up.  Using your cell phone to pay for anything from train tickets to lunch to groceries is completely old hat in Japan.  DOCOMO also showed us two new handsets which have natural wood exteriors.

Hokusai's Great Wave off Kanagawa

Hokusai's Great Wave off Kanagawa

The other cool fact I learned from the 2010 film is that the yukio-e woodblock prints of the master Hokusai Katsushika captured the movement of water at 1/5000 of a second.  (By comparison, most digital SLR cameras are not faster than 1/1000 of a second.)

Insight: DOCOMO’s Future Station is very cool.  While visiting the Future Station, I was like a kid in a candy shop on Christmas morning.  Being there reminded me why I got into telecommunications in the first place – because tomorrow will always a brighter day with bigger (smaller), better, faster and Cooler Stuff.  I will have to go back in 2020.  I will give you an update then.

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The New Dutch Auction

Friday, May 7th, 2010

A Dutch auction is typically one where prices go down.  The auctioneer starts with a high price and then asks for lower prices.  The first person to call out gets the item at that price.  However, this is not how it worked in Holland last week.

A week ago, the Dutch telecommunications regulator Agentschap Telecom completed a spectrum auction for licenses in the 2.6 GHz band.  Five bidders spent just over €2.6 million to acquire 130 MHz of the 190 MHz in the band, but they did so in an unusual way.  Agentschap’s auction had two parts.  In the first part, bidders vied for a certain amount of spectrum.  In the second round, the bidders competed for specific 5 MHz blocks, with the option of single 5 MHz blocks of unpaired (TDD) spectrum or 2 x 5 MHz blocks of paired (FDD) spectrum.  This determined the pairing the band.  No FDD spectrum was acquired.

In this way, the auction determined whether the spectrum would be used for cellular type uses (FDD) or for WiMax-type uses (TDD).  To my knowledge, Agentschap’s auction was only the second time an auction was used to determine not just assignment but allocation as well.  In 2008, ComReg in Ireland used a very similar auction in the 26 GHz band.

Insight:  In a previous Cool Stuff, I wrote about my work to design an auction which could not determine not only who gets the spectrum rights, but what the contours of those rights are.  I called this approach: Price-Guided Radio Policy.  Now, we have two data points to suggest that this approach can work and can efficiently determine not only spectrum assignments but allocations as well.

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The Spoon

Wednesday, May 5th, 2010
Don't try to bend the spoon.

Don't try to bend the spoon.

In the classic 1999 film The Matrix, the protagonist, Neo, played Keanu Reeves, goes to see an oracle.  In the waiting room, he happens upon one of the oracle’s child disciples who is sitting zazen and melting a metal spoon with mind.

Spoon boy: Do not try and bend the spoon. That’s impossible. Instead… only try to realize the truth.

Neo: What truth?

Spoon boy: There is no spoon.

Neo: There is no spoon?

Spoon boy: Then you’ll see, that it is not the spoon that bends, it is only yourself.  (Source IMDB)

By the same token, I have long wondered if there is no radio spectrum.  This fact is among the reasons that the unlicensed regime works so well.  It is spectrum policy, just without the spectrum

The jurisprudence underlying the Part 15 rules is that unlicensed spectrum is not spectrum at all…. It is merely an idea – a concept – a way of describing and organizing the physical world in our minds and in our actions. Spectrum is a legal and engineering construct to control for an immutable fundamental physical property… (Source: Unlicensed to Kill)

The Part 15 rules simply consider what is the maximum amount of irradiated power which can be emitted by a device without an unacceptable probability of causing harmful interference.

However, most of spectrum policy other than the Part 15 rules deals with regulating the “airwaves”.  Yet treating radio operations as spectrum or airwaves or property is a false paradigm.  This point was driven home to me a few years ago when I was an FCC staffer.  I was once filling out my timesheet at the FCC.  One of the lines on the sheet was “spectrum” and it dawned on me that I was spending more than 66.7% of my time dealing with something which had momentum, but no mass.  Somewhat paradoxically, electromagnetic energy behaves simultaneously like a wave and like a particle, carried by photons.  This is an important and powerful observation.  In fact, it was for this observation (the so-called photo-electric effect), and not General or Special Relativity, that Albert Einstein was awarded the Nobel Prize.

So, while we are regulating the airwaves, who is regulating the photons?!

Insight:  I raise this issue now because just last week the FCC announced the (re)establishment of its Spectrum Task Force.  Honestly, I am not exactly sure what implications for radio policy of considering the dually of electromagnetic radiation as both a wave and a particle might be; however, going forward perhaps the STF should undertake critical rethinking of this crucial policy area from the basics up.

Since we cannot bend the spoon, perhaps it is time we bend ourselves.

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The Uncommon Unlicensed – A Licensed Commons

Wednesday, March 24th, 2010
My Marriage License

I received a license, and my property rights all turned to commons.

I recently read Kevin Werbach’s excellent article on the TV white spaces, The Wasteland (not to be confused with T.S. Eliot’s The Waste Land).   I shared some of my ideas on his article with Kevin, and after an email exchange I came to the conclusion that there is a significant challenge to the successful opening up of the TV white spaces.

Under the White Spaces order, any unlicensed device which will operate in the band has to query a database and obtain permission before it can start transmitting.  Kevin argues that the white spaces database is independent of spectrum policy.  While that might be true, the imposition of the database will certainly hold implications for spectrum policy.  When a white spaces device has to query a database and obtain permission before it can operate, it is, by definition, no longer an unlicensed device.  Rather, the regime is a licensed commons.  This grant of permission is in fact a form of a license, albeit a light one.

Let me digress for a second.  A license is a grant of permission to do something.  It affords the right to “verb a noun”.  With a license one may: drive a car, own a dog, (try to) catch a fish, marry the woman of his (or her, depending on the state) dreams, or emit radio energy into the ether.  A spectrum license is usually coupled with some expectation of interference protection, but not always. The FCC already has utilized a myriad of different license types, including license-by-rule, operator, class, station, and geographic.  (I detail several different license types in my 2004 TPRC paper, at pp. 9-16.)

In my 2006 law review on Personal Communications Services (PCS), I examine both the licensed and unlicensed version of PCS.   The licensed commons is one of the factors which killed the unlicensed version PCS.  For unlicensed PCS, the FCC created a regime under which unlicensed users had to get permission from a non-profit firm called UTAM before they could start using their unlicensed PCS devices.  In doing so, the FCC inadvertently delegated to UTAM the power to grant licenses.

Think of the poster child for the unlicensed regime – Wi-Fi.  I can turn on my Wi-Fi anytime, anywhere, and leave it on until Ron Coase’s cows come home from grazing on the commons.  No grant of permission is required to access the spectrum (emit RF energy).  Now, consider a white spaces device.  When it turns on, it has to access a database somewhere and get the Okay to start emitting RF energy.  This is a grant of permission and is a form of a license, although the FCC has made Google or whoever is running the database is now the de facto licensor.

A licensed commons can be a very good thing.  Ham radio and the interstate highway system are both licensed commons and have both been very successful.  So, this type of arrangement can work in practice; however, when the alternative is less restrictive, the licensed system will not be desirable.  The FCC’s Part 15 rules are the international gold standard for unlicensed (and licensed-exempt) operation.  They are the one area where U.S. communications policy still clearly stands head and shoulders above the rest of the world.  The reason the Part 15 rules work so well is that it is spectrum policy without the spectrum (mathematically, spectrum policy – spectrum = Part 15).  The rules simply consider what is the maximum amount of irradiated power which can be emitted by a device without an unacceptable probability of causing harmful interference.  It is a classic efficiency approach and should be the basis of all radio operations.

In order for the White Spaces Order to be successful must offer device manufacturer and device users more benefit than they could achieve by using the existing Part 15 rules.  Device manufacturers can make devices to operate under the less restrictive parts of the Part 15 rules (the U-NII and spread spectrum rules).  So, they never made any successful products for U-PCS.   The same will be true for the White Space rules.  In order for the White Space database system to work, it will have to offer greater flexibility, more power, wider tuning ranges, more suitable frequency bands, etc. than the current Part 15 rules allow.

Insight:  Should the band not deliver on its promise punditocracy on the ‘property rights’ side of the spectrum policy debate will say: “I told you so – unlicensed never works.”  The sad irony is that if the White Spaces rules fail to deliver, it will not be because it is an unlicensed regime, but because it is truly a licensed regime.  I told you so, first.

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Wi-Fi? Wi-Not?

Thursday, February 18th, 2010

In the past several weeks, there have been several news articles and blog posts about the possibility of Wi-Fi being a solution to congested mobile networks.  There was a piece in Total Telecom, one by Maggie Reardon, and one by Stephen Rayment for the FT.

The argument is that the widespread adoption of smart phones and mobile Internet has congested mobile wireless networks to the breaking point.  In order to alleviate congestion on their 3G or 4G network, carriers could offload traffic onto Wi-Fi networks (including those of other operators).  This would free up the carriers’ limited spectrum resources which they obtained at auction through the licensing process.  And, it could be done more cheaply than upgrading existing cell sites. (Dana Blankenhorn at ZDNet correctly points out the inconsistency of giving more spectrum to wireless carriers if unlicensed operation is the solution. It was not so long ago that wireless carriers were crying foul that all Wi-Fi networks such as the now defunct Cometa presented unfair competition because they had not spent billions to acquire their licenses at auction.)

Insight:  Integrating mobile networks with Wi-Fi is a good idea.  It is, however, not a new one.  At a conference nearly eight years ago at Columbia University and in the ensuing paper, I suggested that wireless carriers consider incorporating Wi-Fi into their networks.  My reasoning was not so much about load balancing as it was about market segmentation.  Complementing existing 3G networks with Wi-Fi would enable carriers to offer tiered services – a best efforts service and a better than best efforts service – charging different prices for both and increasing profitability.  I also suggested it would be possible to use spectrum not licensed to the carrier such as the spectrum which has been allocated to CB Radio,  GMRS, or FRS.  A 2003 FCC rule change would allow handsets cable of operating both on mobile networks and in these bands. In this way, carriers could offer services like push-to-talk or walkie-talkies without encumbering their already burdened spectrum and networks. Users would be able to speak directly to others in their area, even users on other carriers’ networks.  Alas, there was not much economic incentive for carriers to sell such handsets because it would reduce the mobile termination revenues which carriers charge one another (and eventually their subscribers) for completing calls over their networks.  However, with the balance of market power tipping away from networks and in favor of handset providers recently, it might be possible that we would see such enabled handsets in the next few years.

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Next Generation Spectrum Regulation

Wednesday, December 9th, 2009
Spectrum band plan created by price-guided mechanisms

Spectrum band plan created by price-guided mechanisms

Winston Churchill famously said, “democracy is the worst form of government except all the others that have been tried.”  Perhaps the same can be said of spectrum auctions.  Auction mechanisms have been used starting in New Zealand in 1994 to award spectrum licenses to those who have the highest monetary value. Spectrum auctions have generally been highly effective, with the occasional failure.

Despite their success, auctions have some notable drawbacks such as the so-called winners curse and the fact the up-front license fees require spectrum users to raise capital beyond the princely sums necessary to build a wireless network – a barrier to entry.  However, auctions are far better than the administrative processes which have been used for nearly a century to determine spectrum assignments.  Administrative decisions tend not to be economically efficient because the regulator has limited access to information which market participants would be more able to amass and utilize. There are also problems of political independence and of regulatory capture.

While auctions have been used to determine who gets spectrum rights, they have not really been used to determine the contours of those rights.  These contours are still determined through administrative decisions.

I have just completed a major study on next generation spectrum regulation which can serve as the basis for removing certain barriers to spectrum access, allowing more effective sharing and efficient allocations.

I can think of no reason why a properly designed auction could not determine not only who gets the spectrum rights, but what those rights are.  (Think of it this way: an auction on eBay for a car could determine not just who gets the car, but the color of the car and whether it comes with, say, leather seats or alloy wheels.)  I built a mathematical model of a next-generation spectrum auction using the Shannon-Hartley Theorem as a means modeling behavior by valuing the spectrum when considering the actions of other would-be users.  In my model bidders could express their demands for not just bandwidth, but power, modulation, underlay/interference, and other characteristics.  When I ran an MS Excel-based version of the model, the result was a mix of high and low power uses in the winning bids.  The low power bidders (similar to UWB spectral densities) could in a second round be aggregated into some form of licensed commons with the coordination protocol determined in that part of the auction.  The outcome would resemble a shared use or common arrangement where no one party controlled the spectrum.  However, the most interesting thing was that because bidders could obtain spectrum allocations that more closely fit their needs, more than 40% of the spectrum bandwidth available in the auction was left unsold.  This spectrum was valued by the market to be best allocated to either public sector use or even low- to mid-power unlicensed use.

Insight:  You cannot see, touch, taste, smell, or hear radio spectrum.  Spectrum is not a thing; it is an idea – a legal and engineering construct that explains a physical phenomenon and helps us arrange our behavior accordingly.  That fundamental physical phenomenon is the fact that when electromagnetic waves are: (1) harmonic in frequency; (2) incident in time; and (3) alight on the same reception device, the ability of those waves to be used as information carriers is degraded.  This deleterious effect is known to us as interference.  Without some form of intervention, it is impossible to exclude or limit the use of a common resource such as spectrum. Without exclusion, users consume the spectrum without regard to fact that their usage causes the deleterious effect of interference for other would-be users.  Policies which help to mitigate inference with the least amount of effort will be the most socially beneficial.

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Japan Communications’ New Business Model

Wednesday, October 28th, 2009

On my October business trip to Tokyo, I took time to meet with Japan Communications‘ CEO Frank Sanda.  I know Frank from my work on the Eamon Ryan’s Advisory Forum on Broadband.  I wanted to see Frank and his team because they just launched a new product for Hewlett-Packard.  HP will now sell netbooks in Japan which come with 100 minutes of mobile wireless connectivity. Consumers can buy connectivity on a pay-as-you-go basis from Japan Communications, but branded as an HP service.

Japan Communications built a really cool billing system to handle payment and authentication.  But, Japan Communications does not have a wireless network.  That it gets from the leading carrier NTT DoCoMo. Japan Communications leases capacity on DoCoMo’s network nationwide, and has the ability to purchase more capacity as this business grows. HP gets to determine which devices are sold and can sell the connectivity as its own.  Furthermore, Japan Communications could set up such a system to sell anyone else’s networked devices.  Say, how about a Carterfone?

While Japan Communications negotiated with DoCoMo to get on its network, it was able to do so because the Japanese Ministry for Communications and Information created which rules opened the networks of three largest wireless operators DoCoMo, KDDI, and SoftBank to wholesale. There was apparently a three-year battle at the Ministry in which Japan Communications was at the center. Japan’s policy to require wholesale access to wireless networks goes further than the US FCC’s rules for its 700 MHz auction which mandated these open these networks to foreign devices and handsets.

Insight: This seems like a really cool business model with implications for carriers, devices manufacturers, and application service providers around the world. I have said in a previous Cool Stuff, it is not a question of whether wireless networks should be open or closed. Rather, there is some optimal level of openness which will maximize the carrier’s return.  A privately determined level of openness will no doubt diverge from a level of openness which represents a public optimal. However, this begs the question whether opening networks to wholesale in this way is good policy and whether the Europe and the US should follow suit.  The answer is far more complex than can be addressed in a humble blog entry.  Nonetheless, I am curious see how this market will develop.

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T-Mobile’s G1 Android and Apple iPhone: market power or just marketing?

Friday, February 13th, 2009

T-Mobile recently introduced its G1 mobile phone in Germany, the first to use the open Android platform. The G1 joins the more proprietary iPhone which T-Mobile has sold in Germany under an exclusive agreement with Apple. The G1 is manufactured for T-Mobile by HTC in Taiwan and the Android platform is an open standards effort of the Open Handset Alliance – a consortium comprised of Google and several mobile phone manufacturers and networks. By contrast, the iPhone is a more closed platform where modifications may result in it being rendered inoperable. Given that T-Mobile is embracing open and proprietary strategies for the operating systems, begs questions on the efficacy a hybrid business strategy and whether this is unfair competition.

Both the Apple and Android approaches have had to grapple with the optimal level of openness. No pure strategy is viable: too restrictive, and the phone is of minimal value; too open, and it becomes unprofitable. Originally, the iPhone’s operating system was derided as being overly restrictive. Apple tried to harness the energy of individuals trying to improve the iPhone by launching the App Store in July 2008. It now boasts 15,000 third party applications for sale. At the same time, the Android platform is an open standard, not full open source. The source code carries an Apache license, so some extensions to the code may be proprietary. Further, Android’s Software Development Kit might allow Google to control an Android Market in a way which resembles the App Store.

Insight: It is not necessarily unfair competition for T-Mobile to be the exclusive source for both the G1 and the iPhone in Germany. Despite the 200 patents filed for the iPhone, it is not inherently irreproducible – save its cachet as a technocrati status symbol. Both Samsung’s Instinct and the RIM’s Blackberry Storm have already been launched to compete with the iPhone. Similarly, any other network could market a phone employing the Android platform. Whether these devices are better or worse is a matter of consumer preference. The fact that T-Mobile is now marketing phones based on both open and proprietary software suggests that neither approach is the Holy Grail of business models. T-Mobile initially launched the G1 in the US in order to compete with AT&T which is the exclusive sources for the iPhone there. The decision to sell the G1 in Germany probably embraces economies of scope and scale, more then the question of openness.

A German language version of this note, authored with Christian Wernick, will be published in Wirtschaftsdienst, available at: www.wirtschaftsdienst.eu.

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A flawed analogy for wireless Carterfone rule for Network Neutrality.

Tuesday, January 22nd, 2008

Walt Mossberg, Tim Wu, and others have recently been calling for a Carterfone decision for wireless networks. In 1959, Thomas Carter (no relation) introduced a device which allowed mobile radio systems to be interconnected with the Bell System landline telephone network. The device was in fact a mere acoustic coupler and not hardwired to the network. AT&T attempted to stop Mr. Carter from connecting his radio-wireline equipment. In the ensuing litigation, the FCC opened the telephone network to the interconnection of non-Bell System equipment.Drawing this logic to the fixed and mobile Internet, Mossberg asserts, “You don’t have to get the permission of your Internet service provider to do so, or even tell the provider about it. You can just pack up the old machine and set up the new one.” Therefore, he argues, you should be able to use any wireless device on any mobile network. Well, Verizon and AT&T are making steps in that direction. However, what Mr. Mossberg does not mention that his cell phone contains two parts: 1) the radio and 2) all the other cool stuff in there. The radio handles all of the modulation/demodulation necessary to connect the phone to the network. The parallel in the wired world is your cable or DSL modem. It is to this box that one connects his router, PC, or other Internet appliance. In most cases, you get the modem from your ISP and there is less consumer choice for broadband modems than there is for cell phones. So, in order for this argument to stand, it must not lose sight of the fact that in the wireless world these devices are in the same box, while in the wireline the same box.
Insight: I am not arguing against wireless Network Neutrality; however, the analogy comparing cell phones to PCs is only half correct. So, a proper analogy might be comparing the flexibility of the PC and wireline Internet to the ability to connect any IP device or other cool stuff to your data-enabled cell phone.

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