3G and Spectrum: Industry Hope or Hype?
By Heidi Kriz, Tue Feb 06 00:00:00 GMT 2001

The land-grab for 3G spectrum in the U.S. is on. How the FCC and NTIA chooses to regulate the industry, remains to be seen.

Spectrum, spectrum who's got the spectrum? In the United States the regulatory bodies who answer that question are the Federal Communications Commission and the National Telecommunications and Information Administration. And these two organizations have the wireless industry all worked up over recent announcements concerning the new allocation of space on the radio frequency spectrum, and how they will or won't effect the development of third generation wireless applications or "3G."

Of course, in many circles, the concept of Third Generation or 3G has become the magical mantra of the wireless industry. 3G, they say, will solve all the broadband problems of wireless, helping to usher in a new era of broadband content and applications like mobile electronic commerce, and other applications like videoconferencing and "concierge" services, that would allow a driver to make a hotel or dinner reservation nearby, using the computer in his car.

Accordingly, government organizations have taken up the call.

Recently, and as official support for former President Bill Clinton's memorandum on the subject, the NTIA declared that the "availability of 3G services is going to have a profound effect on electronic commerce."

The NTIA points out that currently Americans account for one out of three Internet users around the world. But that is about to change, because Asia and Europe are on the verge of surpassing the U.S. in wireless and Internet users, because of their "head start in developing 3G services."

"The Europeans and Asians view 3G development as their opportunity to surpass the United State's previous dominance in telecommunications and electronic commerce," says the NTIA.

It is this anxiety has prompted a flurry of activity and on the part of the wireless and industry and the FCC and NTIA itself.

Estate Sale

In late January of this year, the government completed an auction for the broadband spectrum known as the Personal Communications Service, or PCS spectrum. A total of 422 licenses covering 195 markets garnered close to $17 billion dollars for the U.S Treasury.

Effectively adopting a hands-off position, the FCC also announced the "voluntary clearing" of the 700 MHz band to allow for the introduction of new wireless services - most significantly, 3G services. These valuable frequencies are currently occupied by broadcasters airing programming on TV channels between 60 and 60.

An upcoming auction scheduled in March of wireless licenses promises to make this prime frequency space available. But the problem is, say industry executives, that broadcasters have until the year 2006 to vacate that spectrum space and go digital. And what's more, they grouse, the FCC has left it to the wireless carriers and the broadcasters to negotiate their own agreements on issues such as cost sharing for the spectrum moves.

"It's as if somebody sold you a house, and then said that the people currently living in it get to stay on in it indefinitely," says Brian Fontes, VP for Federal Affairs for Cingular Wireless.

But is all this panic for real? And what are the implications of the recent FCC and NTIA activities and announcements for the industry at large? Not surprisingly, it depends on whom you ask.

"The wireless industry has done a marvelous job of convincing the public and the government that the future of its industry depends on 3G," says Bennett Kobb, an industry analyst. "But the fact of the matter is that no one has defined what "3G" really is," says Kobb, who has written a book about the radio frequency spectrum called SpectrumGuide.

"What's really going on is that there is a land grab taking place, and wireless industries are staking their claim now, and figuring out what to do with it later," Kobb says.

Industry executives vigorously challenge that contention. "The wireless market is one of the most important markets in the U.S., and its very important that a body like the FCC foster the greatest spirit of competitiveness and nurturing of that industry - and allocation of new spectrum for the use of 3G is about that,'" says Fontes.

FCC Declares Spectrum Options

But some also say that its unclear what the impact will be concerning 3G and spectrum until the following issues are decided: Which bands are appropriate for 3G services and how large and contiguous those bands are, because bands lined up as closely as possible help foster a global uniformity in spectrum use. Another important issue is how those bands are currently used, which will determine how already encumbered those spectrum bands are.

The FCC says it is considering three options for optimizing certain frequencies, by pairing bands together.

One possibility is hooking up the 1710-1755 MHz band with the 1755-1850 band. European countries could then eventually migrate to these bands, helping to foster a more global uniformity within the industry.

Another option is putting together the 1710-1755 MHz with the 2110-2150. But some countries systems would not be compatible with this spectrum.

A third possibility would call for re-allocating some of the fixed-wire spectrum, which might interfere with services that are already using those frequencies, the FCC said.

"I personally think that a lot of the frequencies currently falling under the aegis of the military will be re-allocated in the U.S," says Kobb. "Other industries don't want to give up their spectrum either."

Whatever happens, it's clear the land-grab is on. How the U.S. wireless industry chooses to apply it to the development of 3G technologies, remains to be seen.

Heidi Kriz is a San Francisco-based freelance writer whose work has appeared in Wired, Red Herring, and PC Computing.