Tackling the spectrum question

The lack of available spectrum is about to become a critical issue. The issuing of ECNS (electronic communications network service) licences to 400 VANS providers means there are now, theoretically, 400 companies wanting to roll out networks. Naturally, only a handful of these will realistically be able to do so. Copper isn't viable, so wireless is where it's at. And we're short of wireless spectrum, or so it appears.

Shuttleworth Foundation fellow Steve Song says the lack of available spectrum is an artificial scarcity. “If you look around the world at current thinking on spectrum, it highlights opportunities for change. A big change is that demand exceeds availability. When spectrum regulation was first thought up, there was far more spectrum than anyone imagined needing. This has changed now and technology has changed to make more efficient use of spectrum. Take mine dumps, for example. We could do nothing with them in the old days. Now they're all being reprocessed due to new technology that can extract gold from them.”

There is indeed gold in them allocated spectrum ranges. And new technology enables regulators and operators to dig it out.

“There are a number of ways spectrum can be more effectively used,” says Song. “One way is to look at current allocation mechanisms - auctions, beauty contests, etcetera - and consider alternatives like spectrum trading of existing allocations and spectrum underlays or overlays that let two different users exist in the same band.”

Song says the most exciting thing for him is the potential to have opportunistic re-use of spectrum. “The Television Whitespaces Alliance is an initiative that allows the re-use of the gaps within television spectrum. [When bands were allocated], they had to leave guard bands between signals to prevent overlap. Now there's the opportunity to re-use those spaces for wireless.

“The regulator in the United States [the FCC] has approved [on 4 November 2008] the unlicensed use of that spectrum. What you essentially have is smart devices that can detect where signal is used for TV, select the unused portions of the spectrum band and use these for communications. Some are attached to a geographical database that determines, in a location-based way, which parts of the band are available to them.”

The implications are indeed broad. Says the Wireless Innovation Alliance (the group behind the Television White Spaces initiative): “This decision promises to fast-track hundreds of millions of dollars of much needed investment capital and bring wireless broadband, education and public safety applications for all Americans.”

Song is understandably excited. “They're looking at doing things with WiFi. It's amazing the amount of innovation resulting just from [the regulator] getting out of the way from a regulatory point of view.”

He estimates it will take 12 to 18 months for devices to get to market now that the FCC has given the green light. “There is a huge opportunity in South Africa to say this stuff is really going to play in the US. If we get appropriate regulation in place now, we'll be able to take advantage of the technology and really begin to deliver rural broadband.”

That said, Song concedes the move hasn't been popular with broadcasters, which are apparently worried about interference.

“Best estimates in the US are that less than 10% of available spectrum is being used at any one place and time,” says Song. “If you extrapolate that to South Africa where there are fewer TV stations and players, I imagine this would be a percentage lower. Yet there is 'no spectrum'. Opening up the possibility for opportunistic re-use of spectrum means we can let the market expand flexibly and invite new entrants. It's one strategy - the most exciting one, as an unlicensed band offers the most scope for innovation.”

Another option is what's called Lite licensing. What that means is that providers each pay a small fee to receive national, non-exclusive access to a chunk of spectrum. “This means operators have to play nicely with others, and can be enforced via technology or regulation,” Song says. It also lowers the barriers to entry, he notes. “In other countries, this is often employed in a way that makes it available to new market entrants only. So not to the Vodacoms and MTNs of the world, but new entrants, which I think everyone would agree is clearly needed.”

Something South Africans don't make enough noise about, Song says, is the way in which spectrum is allocated. “This needs to be done with total transparency, no matter how it's done, whether it's an auction or otherwise. In the US, they recently auctioned off the UHS spectrum. The switch to digital TV meant it wasn't needed for TV any more, and it went for $20 billion. This is not something you want to do a backroom deal on. When you look at what is being auctioned, it's literally digital gold. Icasa being transparent about how it's allocated is fundamentally important.”

The most important thing that can happen is that we get more players into the market.

Steve Song, fellow, Shuttleworth Foundation

How spectrum is allocated depends on government's intentions. “Is it the purpose of the government to make the most possible money or to pick the player that will give the most value on a local and regional basis?” asks Song. “Spectrum is a huge social and economic enabler. Is it more important to get it out there so the country can get value, or to make the most money out of it? At the moment, the most important thing that can happen is that we get more players into the market. It's a critical time, with Seacom and Eassy coming down the line. The opportunity for real competition is arriving.”

From an innovation point of view, the most advanced thinking regarding government's role is that it should just get out of the way. “The WiFi market is a prime example of that. I also think that you have to enforce use of spectrum if it is allocated. This circumvents the issue of spectrum squatting by incumbents. Buying spectrum to ensure it's not used is competition negative.”

According to Song, the first thing South Africa needs to do is audit the spectrum it has. “You'd be amazed how little is used,” he says confidently. Then the country can make use of existing international standards and leverage them as well as realise the lessons learned by other players in effectively utilising spectrum. If anyone from Icasa is reading this, please take note.