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November 06, 2008

The White Space Opportunity - Priceless

"Priceless" is not an overstatement of the value of the radio spectrum opened for free, unlicensed use by the Federal Communications Commission order on TV white spaces. Literally, this spectrum is priceless because no one has to buy a license to use it – just like the spectrum we all use for WiFi today. Figuratively, this spectrum is priceless because it's impossible to calculate the innovation which will result from making the spectrum available WITHOUT specifying either the technology to use it (other than non-interference with licensed use and power limitations) or the applications which can be built here. Voice? Data? Entertainment? Power management? Who knows? Stuff we never even though of; you can count on that.

Priceless or not, some numbers help with appreciating the size of the opportunity.

In the recent auction of comparable spectrum for LICENSED use, Verizon paid over $4.7 billion dollars for exclusive rights to 22Mhz nationwide. This is roughly four television channels – these channels are 6Mhz each. The total TV space consists of almost 50 channels – just under 300Mhz altogether. In rural areas where there are few-over-the-air TV stations, most of that will now be available for unlicensed use! The chart below from dailywireless.org shows some examples:

The 39 channels (234Mhz) available in Burlington, Vermont COULD provide mobile Internet access to everybody in and around the city at speeds better than 10Mbps (with the usual caveat that not everybody uses all of the service all the time) and that access could include all the talking and texting and picture sharing these people now do on their cell phones. It is highly likely that such services will be offered using this spectrum both by local entrepreneurs and national networks. Since the service providers don't have to pay for this spectrum and since they will be competing with each other, it is likely that the services will be very cheap not only compared to mobile data and voice today but also to the current price of cable and DSL access. See why I'm excited?

Even if the spectrum is free, radios aren't. Cellphones have radios in them, obviously; So do WiFi cards and WiFi transmitters and Bluetooth earbuds. Experience shows us that the price of radios serving huge markets in UNLICENSED spectrum quickly falls. Think how cheap WiFi and especially Bluetooth devices are; they operate in tiny relatively undesirable scraps of spectrum compared to the about-to-be-free white spaces. In an excellent comment filed with the FCC by a number of organizations including The Consumer Federation of America and Common Cause, the chart below shows how innovation has flourished since frequencies have been opened up for unlicensed use:

Note the flat line of devices being invented to use the licensed frequencies vs. the explosion of devices including WiFi, Bluetooth, and many other technologies we now take for granted in the unlicensed space.

The innovation leads not only to new devices but also very low prices and brand new services and products like WiFi hotspots and Bluetooth cars.

The need for over-the-air broadband and expanded cell service is greatest in rural areas where there also happens to be the greatest amount of unused former TV spectrum. But there is a significant amount of white space available in every market including major cities – note the 22 channels in LA. That's important because it means that devices and services designed for the white spaces will have a national market which includes urban areas.

If Horace Greeley were alive today, he'd say "Go unlicensed, young people, go unlicensed." The opportunity is priceless.

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