Spectrum re-farming can bring in additional spectrum for newer and more spectrum-efficient technologies and revenues for the government. We need to look into the huge amount of idle spectrum as there are spectrum starved parties who are getting affected
For manufacturing or producing any product, there is a need of a raw material. Various processes convert the raw material to a physical product and an abstract product. For example, electricity can be produced in various nomenclatures like solar, hydel, coal fired, oil fired, gas fired, wind and nuclear. Of these only two raw materials solar and wind are free, the rest has to be paid for in some form or the other. Electricity is termed as a utility. Similarly, we need steel, cement and coal to build our infrastructure, which amongst others requires coal and iron ore. With the advancement of technology, another produce or product is telecommunications, which needs spectrum; electromagnetic waves of varying wave-lengths. Up until the technological evolution of the 1980s and 1990s, resulting in the explosive growth of the wireless technology, this raw material just lay dormant. Suddenly, this natural resource is in great demand, causing scarcity because of its finiteness. Hence, there is clamour confusion and competition to acquire as much of spectrum as possible.
Wireless spectrum is the backbone of the digital communication era, and a limited resource. It plays a crucial part in the economy of the country, earning revenues for both the government as well as private companies in the telecom sector. Such a limitation only makes it obligatory that prompt initiatives are taken that would support use of available spectrum in most efficient manner. Although, there cannot be any fair ground in allotting the spectrum in view of the constantly changing technological upgradation since equality cannot be maintained in all respects in its allocation, the government must ensure that there is an efficient usage of the spectrum for the benefit of society and economy.
Spectrum re-farming can be defined as a combination of present and future administrative, financial and technical measures within the limits of frequency regulation in order to make a specified frequency band available for a different kind of usage or technology. The measures may be implemented in the short, medium or long term. In simple terms, re-farming essentially means shifting operators from one frequency band to another. The concept of spectrum re-farming was first taken up by the Telecom Regulatory Authority of India (TRAI) in 2010 and has since then been a matter of debate between the regulatory authorities and the existing operators as well. The proposals have been to get additional spectrum in 1800MHz (megahertz) from other users, such as Ministries of Defense and Information and Broadcasting (I&B) as well as existing operators in the 900MHz band. TRAI had earlier proposed the re-farming of 900MHz spectrum when operators’ licenses come up for renewal between 2014 and 2021, which was considered to be necessary so that the 900MHz spectrum can be redistributed for high-end services (4G).
There are two methods of spectrum re-farming. One is the already proposed process of spectrum re-farming for 4G technology from the existing users but without the addition of any new spectrum, as per TRAI recommendations. The 900MHz band is considered to be a cost-effective frequency band as operators can get better coverage with a lower number of base stations. It is also ideal for fourth generation technology-based broadband services.
The second method is to bring in more spectrum from other sectors like defence, broadcasting, railways etc, for providing various advanced mobile applications and services. There are other bands as well that are useful for IMT and LTE services. These bands are currently in use by other sectors such as broadcasting, defense and police. For the re-farming of these, the government should come up with a strong policy to allocate funds for technology replacement and upgradation as an incentive for the vacating user. With this approach, it should be possible to re-farm bands for mobility in all kinds of services by terrestrial or satellites, or any other means. This process brings in more spectrum into the system. The spectrum which can be re-farmed are 450 MHz, 700 MHz, 800 MHz (extended –GSM) etc.
Spectrum re-farming is certainly advisable when additional spectrum can be brought in for newer and more spectrum-efficient technologies and also offer an opportunity to the current users of that spectrum. Similar models have been followed elsewhere in the world. If carried out carefully, spectrum re-farming has the capacity for good in-building coverage and wider availability of newer technologies, opening up newer revenue streams. It can provide better rural coverage and cost reduction in operations spread over a long-term. The government needs to look into the huge amount of idle spectrum as there are spectrum starved parties who are getting affected.
The recent US auctions clearly demonstrate the need to re-farm, wherein there was an upfront disclosure of the use of proceeds for three segments, welfare, into the industry and finally for those vacating the spectrum. The US Federal Communications Commission's (FCC) wireless spectrum auction opened in November and will collect bids until the FCC determines that the bidding has stopped. As per the latest reports, the auction has received multiple bids, and provisional bids reached more than $36.4 billion. Multiple offers by mobile service providers have been received so far, in what is shaping up to be a massive auction of US wireless spectrum licenses as bidders around the country are competing to purchase a larger chunk of the finite wireless spectrum that is used to support wireless calls, data transmissions and other communications. The auction, so far is more than three times the $10.5 billion in reserve prices that were listed for the available lots, and is being conducted as part of the FCC's AWS-3 wireless spectrum auction. The AWS-3 auction allows portions of the wireless spectrum that are no longer in use to be reallocated to new licensees so that the bandwidth can be used to expand wireless services. Proceeds of the auction will offset the relocation cost of government users and to pay for the administration of the auction itself. While we cannot make predictions for what the final price is going to be and how much longer the auction will continue, it is to be understood that some of the auction proceeds will be used to create the $7 billion FirstNet (First Responder Network Authority), a national broadband network for first responders to disasters and emergencies. It is commendable that federal agencies are working cooperatively to make this spectrum auction a reality and a resounding success, as they understand the need for a dedicated nationwide wireless broadband network, which they can count on during emergencies and to meet their everyday missions. This auction is a culmination of a decade-long commitment with bipartisan support from members of Congress, the FCC, the administration, and the Department of Defense. Depending on how the auction shakes out eventually, service providers could potentially deliver much better service to consumers and handle more traffic with the additional spectrum. Many other industries also stand to benefit, with cellular connections going into everything from health-monitoring equipment to security cameras to smart cars, most of that data will require a denser network.
As the pressure on capacity grows, operators are facing an urgent need to make the most efficient use of their scarcest resource- Spectrum. This limitation only makes it mandatory that timely initiatives are taken that would encourage the use of available spectrum in most efficient manner. Spectrum is expensive and any technology you want to add to your network requires spectrum. One has to understand that buying new spectrum is like heavily investing and constructing a multiple lane highway allocated only for modern automobiles. Re-farming, on the other hand means reorganising the existing system and regulations on highways and enabling coexistence of modern and older automobiles too. Buying new spectrum is definitely an expensive affair and is time consuming too, whereas in case of re-farming, it is much cheaper and swift but requires effective planning and management.
The purpose of managing the spectrum is to give access to spectrum for the largest possible group of interested parties in due time, while ensuring the overall efficiency of spectrum use and avoiding harmful interference between the users. As mentioned before, re-farming in the traditional sense means the recovery of spectrum from its existing users for the purpose of re-assignment, either for new uses, or for the introduction of new spectrally efficient technologies. Re-farming is just a tool that can be used to satisfy new market demands and increase spectrum efficiency. The reality is that new, unused spectrum will becomes increasingly scarce over the years, and all mobile network operators eventually will face the need to re-farm. They’ll need to turn off current services in some spectrum bands so as to replace them with newer technologies. It can be easily said that, given advances in network equipment, re-farming also promises to increase reliability, enhance coverage, reduce space, decrease power usage, and lower operating costs in many cases.
It is essential that the telecom sector put in some serious efforts towards building cross-functional spectrum management teams of stakeholders from technology, engineering, government affairs, operations, and finance, to take high-quality decisions swiftly and effectively. The rewards of effective re-farming can be great. In one of the first major examples in the US, Sprint finished turning off its 2G network in June 2013 and immediately began re-farming portions of its valuable 800 MHz spectrum to enhance its 3G CDMA and 4G LTE networks. That is expected to increase capacity, enhance in-building penetration and add to the speed of its newest networks. And, decommissioning the redundant and underused legacy network also stands to reduce tower rents, utility costs, and maintenance overhead.
We must understand the significance of a constrained resource. With the rapidly growing demand for spectrum, fresh innovative approaches to its management are urgently needed. Operators must understand the importance of the same and must prioritize the efficient use of spectrum as one of their primary agendas. Spectrum should be seen as a renewable resource to manage, reclaim, and redeploy. To stand ahead of the rising demand, industry leaders and decision makers need to think innovatively about managing spectrum as a life cycle, not an activity. The operator that manages spectrum effectively will definitely gain in the long run. After all, effective management assures the payment of good dividends. And most importantly, it not only reduces the need for additional capital to buy spectrum, but also promises to improve the customer’s experience and reduce operating costs.
(BK Syngal is former CMD of erstwhile Videsh Sanchar Nigam Ltd (VSNL). He is a B Tech (Hons) and M Tech from IIT, Kharagpur, C Eng (UK), MIEE (UK) and Sr MIEE (US). He is also a member of the London Court of International Arbitration.)