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Verizon, T-Mobile Love Unlicensed Spectrum — How Long Till They Kill Wi-Fi?

Wavelengths
C.P. McGrowl, Channel Curmudgeon

C.P. McGrowl

By C.P. McGrowl, Chief Channel Curmudgeon

FCC Chairman Ajit Pai has come in for his share of scorn over recent gutting of Net neutrality rules, deservedly in this curmudgeon’s opinion. But most of the tech and business world apparently missed the memo on an earlier decision that could have serious implications. (Ed. note: Channel Partners was there.) I’m talking about the February 2017 announcement that mobile operators will now be allowed to use unlicensed frequency bands, so long as the operators adhere to published FCC technical requirements.

In the cellular world, this development has been referred to as LTE-Unlicensed (LTE-U), and the carriers appear to be most interested in the 5-GHz unlicensed band. Can’t blame them — the 5 GHz band has roughly 500 MHz of spectrum. That’s more than the entire cellular industry has licensed today. And best of all, they don’t have to pay hundreds of millions of dollars for it! The Wall Street Journal reports that both Verizon and T-Mobile plan to launch LTE-U capabilities this spring. AT&T has opted for LTE-LAA (Licensed Assisted Access), which sounds innocuous but also takes advantage of some unlicensed spectrum by aggregating it with licensed spectrum.

While LTE-U is a bonanza for mobile operators, particularly as they move toward small cells that could make good use of those 5 GHz channels, it’s not great news for any business that depends on Wi-Fi, or, by extension, the partners who serve those customers.

Why?

The key element in all radio-based communications systems is radio spectrum. Shannon’s Law (technically the “Shannon–Hartley theorem”) tells us that the amount of bandwidth available on a channel (in RF, “bandwidth” means the same thing as “radio spectrum”) in combination with the signal-to-noise (S/N) ratio, defines the maximum transmission capacity of any communications channel (that is, the maximum number of bits per second it can carry).

In short, without radio spectrum you’ve got no network, and the more spectrum you have (all other things being equal), the more capacity you have to sell.

Unfortunately, not everything is “equal” when it comes to radio. Physics is part of the problem: Not all radio frequencies perform equally. Higher frequencies lose more power over a given distance, which means that a network using higher frequencies requires more base stations to serve the same geography — a major cost issue for providers.

The other problem is law. The FCC regulates the use of most radio spectrum in the United States; other countries have similar regulatory authorities. Each band of frequencies is assigned to a specific application,  such as government, military, aviation, and of course, cellular networks. The cellular carriers traditionally have had to buy their radio spectrum at auctions, and today those assets represent …

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