The genesis of unlicensed wireless policy

The genesis of unlicensed wireless policy

Article Type: Guest editorial From: info, Volume 11, Issue 5

Unlicensed wireless has become an industry, with hundreds of millions of radios in use today. These devices range from short-range wireless computer keyboards to microwave links with ranges of several miles. Among the most well known are wireless local area networks (WLANs) often referred to as WiFi or 802.11.

This special issue of info presents a collection of papers presented at a George Mason University Law School Conference on “The evolution of unlicensed wireless policy: how spread spectrum devices won access to license-exempt bandwidth” on 4 April 2008. The conference, organized by GMU Law School’s Information Economy Project, reviewed the development of unlicensed wireless policy in the US with the goal of assisting scholars in understanding how current unlicensed policies came into being. It looked at the interplay between regulation and innovation and examined policy initiatives from industry and from inside the government. It also reviewed technological and market responses to changes in regulation.

This resulting special issue includes papers from several individuals who were deeply involved with the development of unlicensed policy and of standards and devices that operated under that policy.

Radio licensing

The licensing of radio transmitters and radio operators began in the early twentieth century. Those early radio transmitter licenses did not grant exclusive access to any specific frequency. Rather, they were part of a safety and quality-control regime that required large ships to install and maintain radios. The frequencies used for maritime communications were shared – there was a pool of frequencies and stations would pick a frequency, use it for the duration of a conversation, and then return it to the pool. Although analogies can easily mislead it is tempting to compare early radio licensing with that for automobiles or airplanes today. Radio operators’ licenses served a purpose similar to that of drivers’ or pilots’ licenses today – they were to assure that the operator had the required skills. Radio station licenses served a role similar to automobile registration and safety inspections. They provided a mechanism for inspecting equipment to make sure that it was operating properly[1].

Unlicensed radio

As technology evolved, regulation of wireless evolved also. Some radio station licenses, most notably in broadcasting, came to resemble property rights giving the licensee an exclusive right[2]. Other licenses were similar to the earliest licenses – they granted access to a pool of frequencies for use on a demand basis. Two technological developments created a need for unlicensed or lightly-licensed classes of radio equipment. The first development was lower cost electronics. The cost of simple radio transmitters dropped so low that individual consumers could afford to purchase them. The second development was radio transmitter designs that were unlikely to create harmful interference even if the equipment was operated by untrained users and was not maintained. The policy issues created by such products are reviewed in Ken Carter’s paper which presents a history of the FCC’s regulation of low-power personal devices from 1938 to the present. His paper is the only one in this collection that addresses the extensive developments in this area that occurred before the 1980s and the advent of “modern” unlicensed policy.

Low-cost, low-power radio systems do not fit well into a regulatory system based on licenses for individual transmitters and operators. Even the simplest form of radio licensing imposes a variety of costs – some on the licensee and some on the regulatory agency issuing the license. By cost, I mean true costs – such as the effort required to fill out a complex form, to review such a filing, or to maintain databases – not regulatory fees. Some applicants for radio licenses are required to search databases of earlier licensed systems and show that their new system will not create interference to existing systems. Historically, the cost of maintaining and searching these databases was substantial – with the cost of a database search being hundreds or thousands of dollars for some radio services. For low-cost radio systems, the costs of licensing could easily be a significant fraction of the cost of the equipment. In contrast, the cost of licensing the radio transmitter on an ocean liner in 1910 was small compared to the cost of the equipment or the salary of the necessary full-time operator or operators.

Adopting rules that permit unlicensed operation of low-cost radio systems can be seen as avoiding transactions costs that might otherwise significantly distort the market for these systems[3].

Another way to put transactions costs into perspective is to compare spectrum costs with transactions costs. In recent auctions and other transactions, spectrum well suited for commercial mobile services has sold for approximately one dollar per megahertz for each person within the service area covered by the license ($/MHz-Pop). Consider the low-power radios that are embedded in some car keys and that are used to lock and unlock car doors. Such a radio is operated a few times per day, each time sending a short-duration, narrowband, low-power signal. Under reasonable assumptions, such a radio occupies about one-millionth of a MHz-Pop spectrum[4].

ISM equipment

There is a second category that is related to unlicensed equipment. This is equipment, such as microwave ovens, medical diathermy machines, and RF-stabilized arc welders that generate radio signals as a side effect of its proper operation. Microwave ovens often leak about one-millionth of the microwave power doing the cooking. Although these leaked signals are quite weak they are strong enough to interfere with nearby radio receivers tuned to a channel occupied by the microwave oven emissions. These devices are not radios and did not require licenses under the early rules governing radio communication. Nevertheless, because of their potential to create interference, radio regulators set aside blocks of spectrum for such devices and began to directly regulate the interference potential of such devices[5].

These devices are known as industrial, scientific, and medical devices (ISM) and the bands set aside for their operation as the ISM bands. Part 18 of the FCC rules governs ISM devices. The presence of interfering energy from ISM at unpredictable times and places makes it difficult to use the ISM bands for most wireless communications applications. However, these bands were a natural home for the operation of unlicensed radios. Generally speaking, there were no incumbents in these bands that would suffer interference and the presence of an installed base ISM equipment in these bands meant that the bands could not easily be reallocated to other uses.

Modern unlicensed wireless

As early as 1980, FCC staff were discussing the concept of a chaos or anarchy band – a band with simple rules enforced only by equipment regulation (Jackson, 1980). In 1985, the FCC adopted rules implementing such a band. Mike Marcus was the FCC staffer who pushed internally for the adoption of these rules and his paper provides a clear and detailed description of the development of these rules. Two key points stand out in his paper. First, the rules grew out of an internal view at the FCC that a flexible, unlicensed service that permitted relatively high powers (up to 1 watt) could serve a variety of consumer needs and act as a stimulus to innovation. Second, the requirement in the new rules that spread spectrum technology be used promised that the equipment would be able to operate well in many types of interference and would generate signals that were relatively benign in their interference effects on other systems. In retrospect the spread spectrum requirement proved to be technically unnecessary but it probably was helpful in getting both FCC decision makers and industry participants to view the innovative policy as something “high tech” and unlikely to create interference. It is likely that the inclusion of spread spectrum in these rules significantly facilitated their adoption. The new unlicensed service was authorized to operate in three ISM bands at 900 MHz, 2.4 GHz and 5.8 GHz.

Perhaps the best-known equipment to be developed under these rules is Wi-Fi – the now commonplace wireless local area networking (WLAN) system. Two papers by wireless networking pioneers describe the history of this WLAN industry and explain how the FCC rules influenced the development of the industry. Both papers identify the FCC’s 1985 adoption of new unlicensed rules as a seminal event in the industry history.

The paper by Kevin Negus and Al Petrick reviews the development of WLAN products, the industry contest between the HomeRF standard and 802.11, and the interplay between the FCC rules and the technical choices made by industry. They conclude that the spread spectrum requirement in the 1985 rules created complications and controversies that were unnecessary and that the 2002 amendment of those rules, which dropped the spread spectrum requirement, created rules that better supported innovation and high-data rate services.

The paper by Victor Hayes and Wolter Lemstra reviews the history of 802.11. Victor Hayes was intimately involved with 802.11 from the beginning – he was the initial chairman of the IEEE 802.11 working group and served in that position for ten years. This paper is a good complement to the Negus-Petrick paper. It describes the development of the both the 802.11 standard and the technology and products implementing that standard. They note that one of the key market developments was Apple’s decision to bundle WiFi with the Apple iBook which was to be introduced in 1999. Once Apple did this, other computer manufacturers had to at least offer the option of a WiFi capability. A second section of their paper describes some of the applications of WLAN technology including various forms of neighborhood networking.

A quite different perspective is offered by Henry Goldberg’s paper. Goldberg is a lawyer who represents clients before the FCC – in the case of unlicensed wireless he represented Apple Computer in key proceedings. Goldberg describes efforts by Apple in 1991 and 1995 to get more spectrum allocated for unlicensed use. Both efforts were successful resulting in the creation of the data PCS band at 1,910 MHz and the U-NII band at 5 GHz. Goldberg characterizes the data PCS band as a failure and attributes that failure to several factors including:

• •

  The presence of microwave incumbents who had to be relocated before the band could be used by nomadic data devices.

• •

  The domination of the band-clearing entity (U-TAM) by voice interests who were uninterested in data.

• •

  The complexity of the band-sharing etiquette which raised the complexity and cost of equipment.

He omits a fourth factor that might also have been important. The physical characteristics of the data PCS band are essentially identical to those of the nearby 2.4 GHz band. However, unlicensed devices had access to 80 MHz of spectrum in that band – permitting higher data rates and easier coexistence of equipment in a region. Goldberg concludes by identifying unlicensed spectrum as a home for innovation and experimentation.

Steve Lukasik’s paper considers how a regulatory agency can foster innovation. Lukasik, a physicist by training with broad experience in industry and government, became Chief Scientist of the FCC in 1979. He describes the institutional factors that he believes made the FCC fail to treat innovation as an important goal and the steps he took to strengthen the FCC’s technical and scientific expertise. He reviews several FCC rulemakings – including Carterfone, Computer Inquiry II, and unlicensed wireless – that he believes created opportunities for innovation. The common theme to these decisions was that the FCC set rules that permitted markets to operate and innovations to be introduced into the market without further regulatory involvement.

Tim Pozar reviews the use of unlicensed spectrum to provide affordable broadband access in locations that had been uneconomical to serve using DSL and cable modem service. He describes a system built using 802.11 access points to provide connections to end users and point-to-point microwave radios operating in the unlicensed band at 5.8 GHz to provide a system backbone and backhaul to the Internet. He concludes that the combination of easy entry, market scale, and open standards in the unlicensed bands created products and an environment that together made it possible to provide broadband access at costs far lower than would have been the case.

Conclusion

Together these papers provide substantial insight into the development of the modern rules governing unlicensed radio systems and the worldwide industry that has grown up as a consequence of the opportunities created by those rules. Although Wi-Fi is the poster child for these rules and receives substantial attention in these papers, Wi-Fi is only one of hundreds of systems that came to market under these rules. These rules came into being because of policy innovation and policy entrepreneurship inside the government. Only later did academics discover the benefits of the wireless commons. As with many successful concepts unlicensed wireless has spawned a legion of admirers who apply its basic insights to problems it is unsuited to solve[6]. However, no such nonsense appears in these papers and I commend them to you if you wish to understand how modern unlicensed wireless policy developed.

Notes

1. 1.

   This short précis of early radio regulation omits many important elements. The earliest international agreement on radio regulation, the 1906 Berlin International Wireless Telegraph Convention, also included elements of economic regulation such as a requirement to interconnect (Article 3) and prohibition of adopting new technologies for the purpose of making interconnection technologically impossible (Final Protocol of the Berlin Convention, III), adoption of calling-party pays (Service Regulations Annexed to the Berlin Convention, XIV), and price caps (Service Regulations, XI).

2. 2.

   In a 1976 dissenting opinion, FCC Commissioner Robinson wrote, “Despite the legal theory of the Communications Act that a license is not a property right, the practical reality has been quite different, as all the world knows.” 60 FCC 2d 435, footnote omitted.

3. 3.

   I was working at the FCC during the citizens’ band (CB) radio craze. When the craze began, users were required to apply for an FCC license; the manufacturers put a license application inside the box with the radio. Most consumers who bought a CB radio discarded that application and operated without a license. But, a significant fraction of consumers filled out the application and mailed it to the FCC. The FCC dutifully reviewed the application, approved it; printed a license; and mailed that license to the consumer. When the costs of printing and mailing licenses grew to about half of the FCC’s computer budget, the FCC reassessed its policies. Today, CB radio is an unlicensed service.

4. 4.

   Assume that a radio transmits ten times each day, that a transmission occupies 25 kHz of bandwidth and lasts for 0.005 second, and that it creates interference within 100 meters of the transmitter – that is, over an area of 0.03 km². Assume also that the radio is operated in an area with a relatively high and uniform population density of 1,000 people per square kilometer. Then the signal would cover 30 people. Simultaneous operation of 40 such radios would occupy 1 MHz of spectrum. So, continuous operation of 40 such radios would consume 30 MHz-Pops of spectrum. But, an individual key has only one such radio and it is operated for a fraction of a second each day – 0.05 seconds under our assumptions. If we assume that all the value of a megahertz of spectrum is packed into ten hours of a day, then these radios transmit 0.05 seconds out of a total of 36,000 seconds a day. Combining effects we see that the MHz-Pops occupied by such a radio is (30 Pops) *(1/40 Mhz)*(0.05 seconds operating time)/(36,000 relevant seconds in the day) or a little less than one-millionth of a MHz-Popo If a MHz-Pop of spectrum is worth $1.00, then the spectrum occupied by a car key is worth one ten-thousandth of a cent. If one conservatively values a consumer’s time at $100 per hour, then a consumer would need spend only about one-thousandth of a second contemplating an FCC license form before the transactions costs exceeded ten times the value of the spectrum used by the device.

5. 5.

   For example, in 1968 Congress amended the Communications Act of 1934 and gave the FCC the authority to “make reasonable regulations governing the interference potential of devices which in their operation are capable of emitting radio frequency energy by radiation, conduction, or other means in sufficient degree to cause harmful interference to radio communications.” 47 USC 302a, PL 90-379. The 1947 Radio Conference designated bands for ISM devices. See ITU RR 5.150.

6. 6.

   For example one noted academic stated, “With spread spectrum technologies, spectrum would not need to be allocated, in the sense of giving one person an exclusive right to the detriment of all others. With spread spectrum, broad swaths of the radio spectrum could be available for any to use, so long as they were using an approved broadcasting device. Spectrum would become a commons, and its use would be limited to those who had the proper, or licensed, equipment.” A list of other such extravagant claims is given in Jackson et al. (2006).

About the Guest Editor

Charles L. JacksonElectrical engineer and consultant who has worked extensively in telecommunications and wireless. He is an adjunct professor at George Washington University. Dr Jackson has consulted on spectrum and telecommunications policy issues for numerous commercial clients and several governments, including New Zealand, Panama, Jamaica, the UK, Germany, Latvia, and the US. Dr Jackson received his PhD from MIT.