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Spectrum Policy in Hong Kong

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Spectrum Policy in Hong Kong 1 Telecoms Infotech Forum Briefing paper Radio spectrum issues in Hong Kong Plus Avoiding another cable blackout? February 2007 http://www.trp.hku.hk/tif/home.php 2 Telecoms InfoTechnology Forum The TIF is an industrial forum run on a regular basis by the Telecommunications Research Project (TRP) at the University of Hong Kong. Dr John Ure, associate professor and director of the TRP, and Dr Peter Lovelock, deputy director of the TRP, are also the directors of TIF. In 2006 the TRP Corp (http://www.trp.hku.hk/profiles.html.) The TRP provides background briefing papers for each TIF and posts these together with presentations and proceedings papers on the website. http://www.trp.hku.hk/tif/papers.php TIF is the source of funding of the TRP. The output of the TRP is mostly public domain research into economic, policy and regulatory aspects of telecommunications and related sectors such as IT, new media, Internet and e-commerce.1 The output of TIF is a series of industry and policy-focused forums that bring together all interested parties in a non-partisan way. The objective of TIF is to stimulate informed interest in the economic, policy and regulatory aspects of information and communications technologies (ICTs), to foster greater transparency and a better understanding of the economic and technological dynamics of the sector, and its impact on social welfare. For further details of TIF and TIF membership, please contact: Dr Jenny Wan at the Telecommunications Research Project: tel: 2859-1919; fax: 2857-9434 or Email: [email protected] 1 The TRP also provides consulting, research and training services. 3 Briefing Paper 1: Radio Spectrum Policy in Hong Kong 1. Shannon’s radio production function: I = B log(1+ S/N) btps I = capacity offered to user B = bandwidth available S = receiver power (in watts) N = noise level: (i) natural, (ii) man-made, (iii) interference ‘this negative externality has provided the most convincing arguments for public management of frequencies, and against market mechanisms’ (Jens C. Arnbak ‘Managing the Radio Spectrum in the New Environment’2) 2. Incredibly, these fish can adjust the frequency of the electrical pulses to avoid interference problems. (Fish tank, London Zoo Aquarium, visited 2002) The Discovery of Frequencies and the Invention of Radio In 1866 an American dentist and amateur inventor Mahlon Loomis gave the first demonstration of radio telegraphy or telegraphy without wires. Scottish physicist James Clerk Maxwell in the 1860s had predicted the existence of radio waves, and in 1886 the German physicist Heinrich Hertz was the first to demonstrate them – rather than just their effects – by passing an electric current through a wire antenna and measuring the waveform of electro-magnetic emissions. The measurement of frequencies or oscillations per second has been measured in Hertz. (Hz) – radio waves in megahertz (MHz) – ever since in honour of his name. But it was the Italian inventor Guglielmo Marconi who in 1895 first succeeded in sending a radio telegram any real distance, across the Atlantic Ocean in 1901, although according to a US Supreme Court ruling, Marconi was not the first to patent radio transmitting technology. That honour was awarded to Nikola Tesla, son of a Serbian Orthodox clergyman, who also invented fluorescent lighting. Among the many inventors working around radio waves was Lee DeForest who in 1907 patented the ‘audion’ using a three-electrode (triode) vacuum tube to boost the volume of the radio waves, making possible what became called ‘wireless telephony’ that allowed voice, music, or any broadcast signal to be clearly heard. In other words, he invented amplitude-modulated or AM radio that allowed for the first time a multitude of radio stations. Central to all efforts to provide spectrum to meet demand is the need to avoid interference, and amplifying a signal while keeping its frequency constant is one way to do this. Frequency modulation (FM) does the opposite.3 Edwin Howard Armstrong in 1935 invented the FM technique. In modern wireless telecommunication systems, alongside frequency division multiple access (FDMA) other modulating systems in use include time division multiple access (TDMA) and code division multiple access (CDMA), time division synchronous cdma being developed by China (TD-SCDMA), 2 See http://lirne.net/live/content/view/7/42 3 See http://en.wikipedia.org/wiki/Image:Amfm_klein.gif for a nice animated diagram to illustrate the difference. 4 dynamic assignment multiple access used by satellites (DAMA), and next generation technologies that include artificial intelligence built into smart antennae such as switched beam and adaptive array antennas, software defined radio (SDR) such as ‘cognitive radio, orthogonal frequency division multiple access (OFDMA), spread spectrum techniques, dynamic random access code assignment (DRACA), the use of mess networks which utilize all active terminal devices as transceivers to grow the network organically, and so on. Spectrum as a Scarce Resource During the early years of radio communications spectrum was generally unregulated. The sinking of the Titanic on 14th April 1912 revealed that radio distress signals were not picked up by a nearby ship because the ship has turned off the radio for the night. The subsequent Radio Act of 1912 in the US started the process of bringing spectrum usage under licensed control, requiring licence holders to restrict themselves to certain frequencies to avoid interference and to prioritize distress signals. The Frequency Radio Commission (FRC) was created by the Radio Act 1927 to manage spectrum as a national asset. Avoidance of signal interference remains the greatest challenge as the demand for certain frequencies grows ever stronger. For example, in countries like India where the military and government agencies control large swathes of the spectrum, a shortage of spectrum is beginning to cause severe quality of service problems for urban cellphone users. In Hong Kong’s 2006 consultation exercise on the issuing of frequencies for broadband wireless access (BWA) several existing commercial users, notably satellite networks, complained about potential interference problems. Modern spectrum management is about allocating spectrum –including re-allocation or ‘refarming’ – to new uses and then assigning spectrum to new users in a way that (a) avoids undue interference problems, (b) reserves sufficient spectrum for public (non-commercial) services deemed to be essential, and (c) increasingly sees the need for spectrum to be used in the most productive ways. Licensed spectrum applies to areas in which these problems are likely to arise, while unlicensed spectrum is good for non-contested frequencies, e.g. use of microwave ovens, or ‘commons’ usage, including many near field communications (NFC), e.g. wireless unlocking devices for automobiles and doors, low-powered indoor WiFi networks, Bluetooth, etc. The ITU and the Supply of Spectrum The supply of spectrum is generally governed by the recommendations of the ITU’s World Radio Conferences (WRC) held every 2-3 years. The last one was 2003 and the next October-November 2007. The ITU’s three regions are – Region 1 = Europe and Africa – Region 2 = Asia (Oceania) – Region 3 = Americas Each region tends to coordinate allocations to similar uses, but is not bound to other than by self-interest and economics. The first step is to identify bands of spectrum that should 5 be ‘allocated’ to different uses, which may be multiple. In some cases exclusivity is recommended, in other cases ‘shared’ use by different classes of service in which ‘primary’ which takes preference over ‘secondary’ and in other cases no priorities are recommended. Exclusivity usually applies to the more mission critical areas of usage or to sensitive public policy areas such as broadcasting. Various categories and sub- categories of usage are identified: fixed, mobile, broadcast, amateur, inter-satellite, technical and scientific. See slides at the end of the paper for details. National regulators first construct their own frequency management plans,4 then decide about how to make the frequencies available to users. Important frequencies are ‘assigned’ through a licensing process and selected by several methods: first-come-first serve in cases where there is no shortage of spectrum, the beauty-contest where choice between bids is an administrative and sometimes a political process, auctions, and so forth. Where frequencies are used for international communications and could cause interference problems, they are usually entered into the Master International Frequency Register (MIFR) run by the Radiocommunications Bureau of the ITU. Spectrum Markets? The important point in all this is that the supply of spectrum in the most sought after bands is constrained through the acceptance by regulators of the recommendations of the WRC. This fact alone limits the degree to which the use of spectrum can be market driven, far less market determined. However, two factors are rebalancing the scales. First, there is a growing acceptance that market-type reforms are the best way to achieve a more efficient use of spectrum, and second, that advances in micro-electronics are allowing commercial users to come up with ‘intelligent technologies’ that, like the fish at the London Zoo Aquarium, internalize the harmful ‘externalities’ of interference. Spectrum as a scarce resource is traditionally regarded as a public good in the sense that its use does not diminish its availability to others. For example, people who receive radio or TV over the airwaves do not deny others from doing likewise. But once it becomes fully utilized it is no longer available for other uses and interference diminishes its value to users. Techniques to search for the next available channel, to re-use and re-assign spectrum on demand are making big strides to overcome these limitations, but not all spectrum can be allocated on a ‘commons’ basis. Market values then enter the picture. and that is where the analogies with land come in.
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