All you wanted to know about "Spectrum"
What is Spectrum?
Spectrum is a term for electromagnetic radiation or simply air waves used for communication between two entities. The intelligence is embedded in the air waves through a process called modulation at the transmitting end and the same intelligence is extracted in its original form through a process called demodulation. A slice of spectrum contains a band of frequencies. The wider the band, the more information-carrying capacity it has and we say it has more “bandwidth”. Bandwidth is generally measured in thousands, millions, or billions of hertz.
· Kilo hertz (1,000 Hertz) is written as kHz
· Mega hertz (1 million Hertz) is written as MHz
· Giga hertz (1 billion Hertz) is written as GHz
The process of compression and modulation can pack more and more information bits in a given bandwidth. Text transmission requires the least information bits per second in the range of about a kilobit per second or simply 1 kbps. Digital voice requires about 10 kbps, digital music about 100 kbps, standard definition digital TV about 2 Mbps, high definition TV about 10 Mbps, and so on.
The electromagnetic spectrum has long wavelengths (low frequency) at one end and short wavelengths (high frequency) at the other end. The wavelength affects a signal’s propagation characteristics, including its ability to pass through objects. As a signal passes through objects, it is gradually weakened. Although every object the signal encounters weakens it, some weaken it more than others. The air we breathe, for example, weakens it less than the drops of water in a rainstorm, which in turn weakens it less than a brick wall. This weakening is called absorption, and absorption tends to vary by wavelength. Longer wavelengths are less likely to be absorbed by dense objects such as clouds, trees, cars and homes. This is a key reason that low frequency spectrum, such as the bands traditionally assigned to broadcasters are most valuable.
Spectrum has been put to several uses, most notably during the early days of TV by broadcasting stations which are equipped with a single powerful transmitter so that it can reach out to a vast number of radio receivers owned by citizens. The next popular usage has been to communicate between two entities, both equipped with a set of transmitter and receiver each. The third major usage has been for extending wireless services to large number of subscribers limited to within their respective cell boundaries.
The cellular control technologies enabled the usage to be extended to mobile subscribers moving across cells using handheld devices without any interruption in service. The mobile system and devices had to meet exacting requirements such as limiting transmit radiation to overcome health hazard standards, increasing receiver sensitivity and a host of popular subscriber features. Even so, these could be met at mind bogglingly low costs because of the huge subscription numbers and the overwhelming subscription for the mobile service. Today’s mobile service popularly called 3G allows very high download speeds for viewing video clips and the like, in addition to the more conventional voice and text messaging services.
Who owns Spectrum?
Certain concepts need to be developed from the fundamental level. We have been used to accepting some concepts without ever questioning fundamentals. Spectrum is an example. Air waves like water or air belongs to society as a whole. Every citizen has to be a benefactor. There ought to be equitable use. Yet we find that not enough awareness is there amongst citizens about this. How many of us, for example, know how the full range of electronic spectrum is being used today? We only tend to be aware of what is being focussed by the media. Take for instance, the recent 3G spectrum allocation. 3G spectrum is just a small fraction of the total spectrum available, yet it was initially valuated at only about $7 billion and actually yielded $11 billion in the public auction.
It must be realized that spectrum does not have any ownership. Even the government does not own it, just as much as it does not own the air or the water available in nature. Government is just a trustee who is entrusted with the task of ensuring fair and equitable usage of these resources by public through the instrument of public policy. Thus it would be inappropriate to enunciate a policy that only considers maximizing government revenues in a public auction at the exclusion of other collateral benefits to society such as increase in GDP and consequentially increase in employment. In the present context of 3G spectrum, questions need to be asked whether the 3G subscriber growth and consequent revenue growth are commensurate with the auction prices paid by the operators. Would the country not have been better off at say only half the auction prices but with a much higher growth rate?
The public therefore has a right to know how the entire range of spectrum is being utilized in the country. It needs to know which entity is given the rights and for how long. No one should be assigned any portion of the public property permanently. We find in India as well as in many countries that specific information on spectrum is shrouded in mystery, very often in the misguided name of internal security. This was the old parochial mindset, which should no longer be valid in today’s open society. We need to know why there is such a huge discrepancy between what the proverbial insiders know and what the general public knows. If we are to represent the interests of the common citizen in a vibrant democracy, we need to change this mindset and open the spectrum policy to intense public debate, thereby ensuring greater transparency with the ultimate objective of ensuring efficient spectrum usage and management. To be able to do this, we need to be clear as to what constitutes value when we talk of spectrum.
Valuation of spectrum
Willam Safire of New York Times stated that spectrum is the most valuable natural resource of the information age. The New America Foundation in its Citizen’s Guide to the Airwaves seeks to draw the American public’s attention to the tremendous value of spectrum which is really speaking as per the Communications Act of 1934 belong to the public and states that “it is the purpose of this Act, among other things, to maintain the control of the United States over all the channels of interstate and foreign radio transmissions; and to provide for the use of such channels, but not the ownership thereof, by persons for limited periods of time, under licenses granted by Federal authority, and no such license shall be construed to create any right, beyond the terms, conditions, and periods of the license.”
According to a report of the US General Accounting Office (Sept 2002), the basic problem is that demand for spectrum is outstripping the supply. Thomas Hazlett, Former Chief Economist, FCC confided that the spectrum allocation system is inefficient, unresponsive to consumer demand, and a huge barrier to entry for new technologies anxious to compete in the marketplace.
Many factors have caused the valuation of spectrum to increase dramatically over the last few years. Different frequencies have different propagation characteristics that have a huge impact on their market value. Higher frequencies are less valuable than lower ones because popular consumer services (broadcasting and cell phones) need to penetrate buildings, and this gets harder as you move up the spectrum. To estimate the valuation of spectrum, it is convenient to classify frequencies into four zones – the permeable zone where frequencies up to 2 GHz have maximum ability to penetrate objects easily, the semi-permeable zone where frequencies from 2 GHz to 5 GHz have difficulty in traversing dense objects, the long line-of-sight zone where frequencies from 5 GHz to 50 GHz cannot traverse dense objects and lastly the short line-of-sight zone where frequencies from 50 GHz to about 300 GHz can traverse only very short distances. It is not difficult to understand the statement that the 1% of frequencies below 3 GHz are worth more than the 99% of frequencies from 3 GHz to 300 GHz.
Why is it necessary to valuate spectrum? If spectrum was in plenty and therefore had little value, fair usage of spectrum would not become an issue and everyone’s stake would be fulfilled. The fact that demand for spectrum far outstrips its supply necessitates a fair-use spectrum policy that logically needs to be related to its valuation. Without a fair valuation of the scarce resource, which ultimately belongs to the public, there could not be a basis for a fair-use policy.
Also, restrictions on what a licensee can do affect valuations in competing ways. For example, a television broadcaster is not free to abandon the television broadcasting business and become a mobile telephone operator (a relatively more valuable use) with the frequencies assigned in its license. At the same time, however, restrictions on other licensees mean a television broadcaster does not have to fear an influx of new entrants into its business, which would tend to reduce profits and hence the value of its license.
The New America Foundation’s Citizen’s Guide to the Airwaves postulates four valuation concepts, viz.
“Current use value” where the licensee receives no new spectrum flexibility and the bundle of rights in a license to use spectrum does not change,
“Marginal flexibility value” where the licensee, but no one else, is granted complete flexibility in the use of the spectrum, i.e. a single licensee, but none of its potential competitors, wins the right to use assigned spectrum any way it chooses,
“Universal flexibility value” where the licensee is granted complete flexibility in the use of the spectrum, but potential competitors do as well, and lastly,
“Partial flexibility value” where a subset of licensees is granted complete spectrum flexibility.
How these concepts become key to making policy decisions can be gauged by considering the real estate analogy of property zoning at a prime location that restricts the real estate to be zoned only for residential plots. Assume that there are a thousand plots each of one acre. In course of time all the plot owners would want to upgrade from residential to commercial zoning, so that they could all engage in commercial activity. With current use value, no plot owner can build a commercial complex. With marginal flexibility value, only one plot owner gets rights to build a commercial complex. With universal flexibility value, all plot owners get rights to build commercial complexes. Obviously, the flexibility to build a commercial complex is more valuable if everyone else doesn’t also have that right. Partial flexibility value is the intermediate case, where, say, 100 of the 1,000 plot owners get flexibility to build a commercial complex each.
Valuation would have to be done with the help of a measurement unit. As part of the postulate, the unit is defined by two parameters: bandwidth (MHz) and population coverage (pop). Larger bandwidth increases value because it increases the information carrying capacity of a license. Population coverage refers to the number of people—including potential customers—living in the geographic area designated by a spectrum license. The right to use spectrum in highly populated areas is usually much more valuable than the right to use it in sparsely populated regions. If a 1 MHz band of spectrum sells for $1/person, then its value is $280 million if the band covers all 280 million people in the United States. The unit of measurement would therefore be dimensioned as “$/MHz/pop”.
Spectrum has many commercial uses, and the current use value of the spectrum in these uses varies considerably. The citizen’s guide calculates the value of the spectrum in a handful of different commercial uses, focusing on the economically most important ones. The sum of these values indicated in Table 1 for current use value works out to $301 billion.
Table 1. Current Use Values
Application
|
Frequenciesa
|
Total MHzb
|
$ /MHz/pop
|
Total Value
|
Mobile Communications
|
Cellular
|
824-891.5 MHz
|
50
|
$4.18
|
$59.50B
|
Broadband PCS
|
1850-1975 MHz
|
120
|
$4.18
|
$142.80B
|
Other
|
806-940 MHz
|
15
|
$4.18
|
$17.85B
|
Broadcasting
|
VHF & UHF TV
|
54-806 MHz
|
402
|
$0.233
|
$26.19B
|
Radio
|
0-108 MHz
|
21
|
$8.19
|
$48.16B
|
Satellite TV
|
12.2-17.5 GHz
|
900
|
$0.021
|
$5.34B
|
Satellite Radio
|
2320-2345 MHz
|
25
|
$0.040
|
$0.28B
|
Fixed Communications
|
LMDS
|
27.5-31.3 GHz
|
1300
|
$0.0024
|
$0.87B
|
39 GHz
|
38.6-40 GHz
|
1400
|
$0.0015
|
$0.59B
|
News Gathering
|
1990-2025 MHz
|
35
|
$0.0204
|
$0.20B
|
|
|
Grand Total
|
|
$301.78B
|
Note:
a. This indicates the range of frequencies in which this service is located. The entire spectrum range is not necessarily used for the indicated purpose.
b. This column shows the total amount of spectrum used for the indicated purpose.
The Marginal Flexibility Value Curve represents the value of radio spectrum in its highest valued use today. The general shape of the Marginal Flexibility Value Curve, indicated in Figure 1, is driven by a combination of physical and economic factors. The most notable feature is the steep drop in value that occurs in the 3 GHz to 5 GHz range. For frequencies below that range, radio spectrum is most suitable for mobile uses, such as wireless phones and radios in cars, and non-line-of-sight applications like terrestrial television broadcasting and wireless home computer networking.

The existence of a discrepancy between the current use value and the marginal flexibility value indicates that there is an efficiency loss coming from not allowing the spectrum to be used for services most highly valued by consumers. If however, the spectrum were to be utilized efficiently, what policy would the government apply to incumbents in order to ensure fair usage vis-a-vis competitors? A possible option would be that the government could charge market rates through a public auction, etc. for use of this spectrum which is a public asset, with the receipts going into the treasury rather than the pockets of spectrum incumbents.
When the flexibility of spectrum usage is thrown open to one and all, there would occur a sudden surge in supply as a result of which the average flexibility value under universal application would fall.
If it is assumed that, on average, current use values vary smoothly from the marginal firm to firms that are able to earn twice what the marginal firm does on the spectrum, then the producer surplus is half of the marginal value of $301.78 billion, or $150.89 billion. This brings the total value of spectrum to licensees to $452.67 billion.
Further, the Delphi study suggested that over the next decade alone, a gain of $318 billion can be realized by more efficient spectrum use. For instance, today’s mobile telephone networks reuse the same frequencies hundreds of times in a given metropolitan area. With digital technology, the same 6 MHz that could only carry just one standard definition analog TV channel in 1960 can today carry ten such channels through digital compression and multiplexing technology. The sum of these two values viz. the total value of spectrum to licensees and the additional value realization by more efficient spectrum usage is just over $771 billion for potential total value to license holders of licenses for completely flexible licenses.
Now we may compare this with the $11 billion valued for the 50 MHz 3G band in India. In order to comprehend the true magnitude of the radio spectrum’s worth, the citizen’s guide compares the total spectrum value to other financial resources. At an estimated $771 billion, spectrum is worth more than the Empire State Building ($1 billion), McDonalds ($31.2 billion), all the gold in Fort Knox ($45.5 billion), Bill Gates ($52.8 billion), the annual amount the federal government spends on Temporary Assistance to Needy Families ($24 billion), the annual amount it spends on Medicaid ($147 billion), and the annual amount it spends on National Defence ($357 billion) all put together. Stakes as large as this is good reason to judiciously carve out a fair-use licensing policy as a national endeavour.
With a coverage population of India being about four times that of the U.S. and rural coverage issues much the same in both cases, the stakes for India seem to be all the more greater. A national level debate on the issue would place India on a logical footing as far as securing the desired macro economic growth rates and GDP are concerned.
Licensed Spectrum
Licensed spectrum bands are those bands which have been leased out for a fee by the government to users who are given exclusive rights for a specific use, for a specific time period either to provide a consumer service such as broadcast TV, mobile telephony, etc. or as a support utility for retail and industrial spectrum to be used by agencies such as the police, railways, airports, companies, etc. Licensed bands constitute a vast majority of total spectrum, about 98% and is considered to be for primary use and therefore given priority on the band.
Unlicensed Spectrum
Unlicensed spectrum bands are free bands for use by citizens on shared basis without any guarantees against interference. These bands are generally restricted to exceptionally low powers, which in turn restrict the users from sending signals very far. However, this restriction allows the same spectrum to be reused by users within their limited premises, thus extending the usage to millions of users all over the country. Typical usage of unlicensed spectrum include low power walky-talkies and audio-video remote controls for TV sets, DVD players, VCRs, remote controlled toy cars, garage door openers, toll passes, baby monitors, etc. Unlicensed spectrum bands constitute an insignificantly small fraction of total spectrum, viz. 2% and are considered secondary use, and can share the band as long as they do not interfere with the primary use.
Spectrum for Rural requirements
The spectrum is not equal in different frequency bands. Different bands have different characteristics and, therefore, are better suited to particular types of wireless services. In general, lower the band, the greater the propagation which translates into broader coverage from a single transmitter. The same range can be achieved in higher frequency bands by building more transmitters, but only at a substantial cost. Unlike most other spectrum users, Rural and Public Safety users do not have the luxury of limiting their operations to areas with significant population density. They must be able to communicate throughout their areas of responsibility and jurisdiction. Their terrestrial coverage must have as broad a geographic reach as is technically possible and financially sustainable. Should public safety be required to meet its coverage requirements in higher bands, significantly more infrastructure would be needed to cover the same geography which would substantially increase initial equipment costs, the complexity of building a network, and ongoing operating expenses.
Rural and Public Safety are critical national requirements affecting huge percentage of population close to the poverty belt. Spectrum in the Sub-band, viz. GHz700 MHz or 450 MHz bands, would be ideal candidates and any of these could be regarded as the prime contiguous band that lends the necessary support to the economic criteria where India would need to spend less on broadband operations and concentrate more on actual deliverables to the citizen. Prioritization over the actual needs of the citizen would therefore require to be exercised in deciding the spectrum usage, in addition to considering the actions of other countries such as the US, that have similar problems as that of India as far as rural coverage and disaster management are concerned. The extra coverage in say 700 MHz translates into more cost-effective networks for the rural Broadband communications. We estimate one base station that operates in 700MHz band can cover the same area as four base stations in 1900 MHz or 10 base stations in 2.4 GHz bands as illustrated in Figure 2. Installation and maintenance costs are reduced by having fewer base stations.

Spectrum is a scarce resource
As the subscription for mobile service increased, cell sizes shrank from a radius of about 2 km to as low as 100 metres in certain cases. This peaking happened at most in two or three localities in dense urban areas. The issue of allotment of additional spectrum by the government then arose. A simpler and more economic way to work around the problem was to use in-building solutions in these limited dense urban localities instead of securing allotment for additional spectrum which would span the entire licensing area instead of just the two or three localities in dense urban areas and thereby increase the costs enormously.
It must be remembered that the spectrum costs which were directly related to opportunity costs had by this time risen to astronomical figures. In fact, the license for spectrum became a dominant factor in market valuation of an operator company. The government had more-or-less veered to the conclusion that any allotment – fresh or additional – should be made through the route of public auction. This was in line with the global trends.
Conservation of Spectrum
There are several ways in which scarce spectrum could be conserved and efficiently utilized. The most fundamental way of spectrum conservation is through the use of in-building solutions through creation of femto cells, typical deployment of which is shown in Figure 3 with one main BTS unit and three remote units covering three buildings. The main unit and the RF remote units are generally connected on optical fibre. The Combining box is used to support multiple bands with remote units of different operators along with distributed antenna systems (DAS). The benefit of microcells is their capability to increase capacity without generating too much interference due to their limited coverage. Microcells are characterized by lower output power and lower antenna placement compared to macrocells.

A somewhat similar end is achieved through the ‘Fixed Mobile Convergence’ or simply ‘FMC’. FMC is about transforming the mobile operator network to enable service delivery to the home and office via the broadband IP network over the fixed line using WiFi Access in the unlicensed band. Since 60% of calls are known to be made from indoors, FMC virtually offloads voice traffic from the spectrum to the land line, thereby directly reducing congestion in the scarce spectrum.
Another important technique that improves voice capacity is Enhanced Power Control (EPC). EPC is already standardized in Release 5 standards of GSM. While GSM today can change power levels every 480 msec (in each associated control channel block), with EPC GSM can adjust the power level every 120 msec (every SACCH burst). For faster moving mobiles, EPC can improve network capacity by 20%.
Frequency Hopping consists in changing the frequency of the channel in every transmitted burst providing frequency diversity and interference averaging. Frequency hopping is not usually applied to the channels employing the control channel, and this portion of the spectrum is referred to as the non-hopping layer. In the non-hopping layer, which contains the broadcast control channel (BCCH), operators deploy traditional re-use patterns such as 4/12. In the hopping layer, operator can deploy tighter re-use patterns such as 3/9, 1/3 and 1/1. In the 1/1 re-use pattern, the entire pool of hopping frequencies is available in every single sector. Fractional loading may be in the range of 20% to 30% or even in the range of 40% to 60%.
Compared to the Enhanced Full Rate (EFR) codec, Adaptive Multi-Rate (AMR) Codec can operate under much worse radio conditions such as with a heavily loaded network. The AMR gives greater spectral efficiency and hence higher capacity with Better voice quality throughout the cell especially at cell edges and deep inside building and increased overall coverage. The AMR feature is network as well as mobile phones dependent. However, the benefit of AMR does not depend on all mobile phones implementing AMR. As the percentage of mobile phones with AMR increases in the network, the efficiency of the network increases.
GSM is an ever evolving technology. A very large telecom community is putting tremendous efforts in spectral efficiency enhancement techniques. Some of the evolving methods to increase spectrum efficiency are Capacity boost by Antenna Arrays, Network Synchronization, Single Antenna Interference Cancellation (SAIC) technique and the use of Smart Radio.
A substantial capacity gain may be achieved by using antenna arrays in a microcellular system. Here, the control channel covers a traditionally shaped sector, whereas the communication on the traffic channels is confined to a narrow beam between the base station and mobile station. These narrow beams improve the C/I in both the uplink and downlink. The gain obtained by the antenna arrays can efficiently reduce interference and thereby increase capacity.
Today’s GSM networks are asynchronous, meaning that any given base station does not attempt to align its transmitted signals with other base stations. Typically, the best performance is achieved when the dominant interfering signal (burst) does not change characteristics throughout the desired signal’s burst. One way to ensure this is to synchronize base stations and align all bursts to a common timing source, e.g. a GPS clock. Although frequency hopping works effectively in asynchronous networks, synchronized networks enable a new powerful means to control the interference. Interference control is achieved by coordinating the frequencies that a given sector will hop over amongst all relative interfering sectors and staggering the order in which they hop over the frequencies. Without network synchronization, such interference control is generally only possible between sectors of the same base station, but with synchronized networks the interference avoidance is possible between any sectors irrespective of the base station. Synchronization further aids in the identification of the neighbouring cells, which is needed for handover and location measurements.
Single Antenna Interference Cancellation (SAIC) technique improves downlink performance for GSM networks. SAIC is basically a technique to boost the capacity of GSM network without needing any change in the network. It is in the interest of network operator to use the allocated spectrum as efficiently as possible and to the highest possible capacity because a substantial investment is done to secure the license for it. It would be desirable to have the frequency reuse of one, which means that each cell can operate in the same frequency. This in turn creates interference to the users operating in the nearby places. Increase in interference cause the voice quality to drop and may cause call drop. It is a well known fact that it is possible to cancel the interference at the mobile handset side by changing the baseband software without changing anything in the network side. SAIC enables mobiles to work in high interference level. SAIC enabled mobiles need even less transmit power from network which in turn reduces the interference for non SAIC mobiles. Theoretical studies show that with 100% SAIC mobile penetration a capacity gain of 60 to 80% is achievable. SAIC capable handset penetration is expected to increase over the next few years.
Smart Radios
None of the aforesaid technologies however appear to be as revolutionary as smart radio, which not only promises a huge increase in spectrum efficiency, but also enforces a rational spectrum policy management. Smart radio, as the name implies, adds context sensitive intelligence to signal processing. Think of the difference between a human ear and a microphone. A human ear has a fine-tuned ability to discriminate between noise and signal. In a room full of conversations, it can focus on a particular conversation of interest. A microphone, in contrast, treats all conversations equally and generates unwanted background noise if all other people in the area covered by the microphone don’t keep quiet. This is extremely inefficient because a room, instead of supporting many conversations, can now only support one. Smart radio allows many different “conversations” to share the same spectrum. One of the most important features of smart radio is that it can not only frequency hop across large bands of spectrum, but also, like a universal translator, understand and speak in the wireless language of each of the bands it uses. A single smart radio has the flexibility to provide all the wireless services of hundreds of dumb radios, including FM radio, broadcast television, cellular telephone, cordless phone, and remote control.
Smart radio can create an “open network” and allow the dynamic sharing of frequencies. Consumers and vendors can easily switch frequencies, thus diminishing the monopoly power of license holders. They can also spread their equipment costs across many services and frequency bands, thus reducing the total cost of spectrum. It’s like having one personal computer that can perform word processing, database, spreadsheet, graphic design, video editing, telephone, television monitor, stereo, Internet, and other functions rather than having a separate device for each of those functions.
Spectrum Policy
Though it appears that the spectrum has reached its frontier as far as exploitation of its full range is concerned, with new technologies such as “smart radio” there is great opportunity to use our existing frequencies far more efficiently than they have been in the past. This further creates a need for new spectrum policies – including more unlicensed spectrum, more frequency sharing, and shorter license terms – that can minimize spectrum scarcity and deliver low-cost, high-speed mobile Internet access.
More than anything else, Smart radio fundamentally changes the economics of licensing. Today, there are substantial efficiencies gained from granting long-term licenses of as much as a decade or more. This is because license holders need to recoup substantial investments in specialized (i.e., dumb) spectrum equipment. In the future, if both transmitters and receivers can easily be reprogrammed to use a variety of frequencies, the efficient term of a license may drop to microseconds. Smart radio, with its superior ability to distinguish signal from noise (because signals speaking different “languages” are not mistaken for noise), also allows for much more efficient management of interference. A “listen before talk” protocol, for example, assumes that a radio can first distinguish between signal (conversation) and noise (unused spectrum). This capacity to distinguish between signal and noise allows different users, such as licensed and unlicensed users, to coexist in ways not previously possible.