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The Economics of Releasing the V-Band and E-Band Spectrum in India

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The Economics of Releasing the V-Band and E-Band Spectrum in India NIPFP Working Working paper paper seriesseries The Economics of Releasing the V-band and E-band Spectrum in India No. 226 02-Apr-2018 Suyash Rai, Dhiraj Muttreja, Sudipto Banerjee and Mayank Mishra National Institute of Public Finance and Policy New Delhi Working paper No. 226 The Economics of Releasing the V-band and E-band Spectrum in India Suyash Rai∗ Dhiraj Muttreja† Sudipto Banerjee Mayank Mishra April 2, 2018 ∗Suyash Rai is a Senior Consultant at the National Institute of Public Finance and Policy (NIPFP) †Dhiraj Muttreja, Sudipto Banerjee and Mayank Mishra are Consultants at the Na- tional Institute of Public Finance and Policy (NIPFP) 1 Accessed at http://www.nipfp.org.in/publications/working-papers/1819/ Page 2 Working paper No. 226 1 Introduction Broadband internet users in India have been on the rise over the last decade and currently stand at more than 290 million subscribers.1 As this number continues to increase, it is imperative for the supply side to be able to match consumer expectations. It is also important to ensure optimal usage of the spectrum to maximise economic benefits of this natural resource. So, as the government decides to release the presently unreleased spectrum, it should consider the overall economic impacts of the alternative strategies for re- leasing the spectrum. In this note, we consider the potential uses of both V-band (57 GHz - 64 GHz) and E-band (71 GHz - 86 GHz), as well as the economic benefits that may accrue from these uses. This analysis can help the government choose a suitable strategy for releasing spectrum in these bands. This note begins with a brief overview of the characteristics of the bands. After that, we present a review of the approaches different countries have taken while releasing this spectrum, and a section on the present policy stance in India. This is followed by a section on policy thinking on unlicensed spectrum bands. After that, we delve into the economic aspects of this issue, beginning with an overview of studies on how internet has impacted the Indian economy, and studies from other countries on the economic benefits of unlicensed spectrum bands. This is followed by an analysis of the potential uses of the bands in India. We attempt to quantify the scale of these uses to the extent possible, based on benchmarking with global standards. In the penultimate section, we attempt to map the economic benefits that can accrue from different uses of these bands. The note concludes with a few key insights. 2 Band characteristics 2.1 V-band spectrum Spectrum in the V-band (57 GHz - 64 GHz) can be used for high capacity transmissions over short distances. Using point-to-point or mesh topologies, the spectrum can be put to a variety of backhaul and access uses. The large 1Telecom Regulatory Authority of India. Press Release on Telecom Subscription Data. June 31, 2017. url: http://www.trai.gov.in/sites/default/files/Press_Release_ No50_Eng_13072017.pdf. 3 Accessed at http://www.nipfp.org.in/publications/working-papers/1819/ Page 3 Working paper No. 226 bandwidth (7 GHz) in the band allows for wide channels in which data can be transmitted at high speeds. Further, since its propagation characteristics, especially high oxygen absorption, mitigate the level of interference, there is lesser need for active interference management. As the typical antenna beam- widths in this spectrum are less than five degrees, many links can be put in the same area just by having them point in slightly different directions. These features of the band were highlighted by TRAI in their recommendations on the allocation of these bands. Since many countries have released this spectrum, there is now significant progress on development of technical standards, and manufacturing and sale of devices. The last few years have seen strong global momentum behind the IEEE 802.11 ad, or WiGig standard which also uses 60 GHz and is making available very low cost semiconductors and system solutions. More recently, a new standard 802.11ay has been defined, with specifications that can enable 100 Gbps communications through a number of technical ad- vancements. Experience on usage of this spectrum in a variety of contexts is gradually accumulating. This is the right time for India to consider releasing this spectrum. 2.2 E-band spectrum Like V-band, the E-band has large bandwidth (10 GHz) capabilities allow- ing transmission of high speed data over short distances (2 to 3 kms). E- band’s frequencies enable point-to-point and line of sight radio communica- tion. These unique transmission properties of very high frequency millime- ter waves enable simpler frequency coordination, interference mitigation and path planning compared to lower frequency bands.2 E-band uses antennas which are highly directional and this coupled with the propagation limitations allows for highly focussed point to point “pencil- beam” links allowing for much higher frequency reuse in a given area. As of August 2014, more than 40 countries have come up with license plans for E-band.3 There are some licensing exceptions, but most of the world follows a lightly licensed regime for E-band. 2Telecom Regulatory Authority of India. Recommendations on Allocation and Pricing of Microwave Access (MWA) and Microwave Backbone (MWB) RF carriers. Aug. 29, 2014. url: https : / / trai . gov . in / sites / default / files / MW % 20Reco % 20Final29082014.pdf. 3Ibid. 4 Accessed at http://www.nipfp.org.in/publications/working-papers/1819/ Page 4 Working paper No. 226 Figure 1 Regulatory options for spectrum licensing Source: ECC Report 132 Although the E-band does not have the oxygen absorption characteristics of V-band, the availability of large spectrum allows for wider channels that can have potential uses in last mile connectivity. This spectrum band has a longer distance range as well as better weather characteristics, which make it a good frequency for backhaul usage. Both the ITU and CEPT have provided detailed channel plans for this band and its use has also been considered in India’s National Frequency Allocation Table (NFAP) 2011.4 3 Licensing approaches: international expe- rience Before diving into the types of license regimes followed, it is important to understand the difference between individual and general authorisation. As per the ECC report 132 (Article 5.1 of the Authorisation Directive), usage of radio frequencies where risk of harmful interference is negligible, should not be subject to grant of individual rights of use, and should instead have conditions of usage under general authorisation. This means that general au- thorisation should be used as the overarching framework, when coordination between users is not necessary. The license structures under the two types of authorisation is presented in Figure 1. 4Telecom Regulatory Authority of India, Recommendations on Allocation and Pricing of Microwave Access (MWA) and Microwave Backbone (MWB) RF carriers. 5 Accessed at http://www.nipfp.org.in/publications/working-papers/1819/ Page 5 Working paper No. 226 1. Individual licensing - This is the conventional link-by-link coordination, usually made under an administration’s responsibility; sometimes, the administration delegates this task to the operators, but it keeps control of the national and cross-border interference situation.5 The likelihood of significant interference with the use of both these bands would be low and as such individual licensing or link-by-link coordination may not be the best approach going forward. 2. Light licensing - It is a combination of license-exempt use and pro- tection of users of spectrum. This model typically has a ‘first come first served feature where the user notifies the regulator with the posi- tion and characteristics of the stations. The database of installed sta- tions containing appropriate technical parameters is publicly available and should thus be consulted before installing new stations.6 Figure 1 shows how light licensing is different under an individual authorisation structure and a general authorisation structure, with no individual co- ordination required under the latter. In practice, the general features of light licensing can be enumerated as follows: (a) For installing a new link, the regulator must be informed. There is generally a database available to view all installed links. (b) Licensing fees tend to be low. (c) Provides a first come first serve protection, in the sense that if two links are installed in one location, and there is interference between the two, in such a case the link installed first is protected and the second link will be reconfigured or removed to prevent interference. 3. License exempt - This method offers the most flexible and low cost usage, and is more popular in specific bands (e.g. 2.4 and 5.8 GHz) where short range devices are allocated, but fixed service applications may also be accommodated. Although this does not guarantee any interference protection by the regulator, it should be noted that alter- nate interference management techniques are available today to deal with the issue. Some of these include cloud based routing through mesh, single frequency network, listen-before-talk and multi-antenna signal processing. 5ETSI. E-Band and V-Band - Survey on status of worldwide regulation. 2015. url: http://www.etsi.org/images/files/ETSIWhitePapers/etsi_wp9_e_band_and_v_ band_survey_20150629.pdf. 6As defined by the ECC Report 80(25) 6 Accessed at http://www.nipfp.org.in/publications/working-papers/1819/ Page 6 Working paper No. 226 4. Block assignment regimes - Under this regime, assignment is made through renewable licensing or through permanent public auctions, or through other allocation mechanism. This is most common when fixed wireless access (point to multi-point) is concerned and the user is usu- ally free to use the block in the best possible way to deploy its network.
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