Wednesday, June 19, 2013

What Balance of Licensed, Shared, Unlicensed Spectrum is "Best?"

It isn’t surprising that mobile service providers argue in favor of licensed spectrum as a principal way of dealing with spectrum and bandwidth needs in the wireless business. It isn’t surprising that would-be attackers often argue in favor of unlicensed spectrum.

Dedicated, licensed mobile broadband spectrum tends to create more-concentrated markets where license holders are few in number (normally three to five facilities-based operators in a country). That tends also to favor larger, well-capitalized service providers.

Unlicensed spectrum tends to appeal to smaller and entrepreneurial firms without the means to pay millions to hundreds of millions for spectrum, and tends to create a larger number of competitors.

In other words, licensed spectrum tends to favor larger incumbents, while non-licensed spectrum tends to favor smaller, upstart providers and innovators.

On the other hand, one might also argue that licensed spectrum tends to make technology transitions much easier, while non-licensed spectrum tends not to promote big changes so easily, since the wide range of non-licensed devices and providers makes any coordinated changes more difficult.

So licensed spectrum arguably is more amenable to “re-purposing” spectrum to new and better uses, compared to non-licensed spectrum.

Ericsson argues that licensed spectrum also promotes global roaming and allows for economies of scale. Also, non-licensed spectrum can lead to such interference that many of the advantages of the spectrum are not always optimized.

“Licensed but shared” spectrum is a newer concept that might arguably combine some of the better elements of each approach.

Ericsson perhaps logically argues for a primary reliance on licensed spectrum, with unlicensed and shared access as complements.

“Increasing the use of unlicensed spectrum as an independent main track is not an effective or sufficient approach for mobile communications,” Ericsson says.

The issue, of course, is in the details of how much shared access and unlicensed spectrum is made available. New competitors and smaller firms logically will argue for more reliance on unlicensed and shared approaches, there being little to no possibility regulators globally will suddenly adopt a new preference for unlicensed approaches.

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