Report for Ofcom on the Value of Ultra Wide Band Personal Area Networking Services to the United Kingdom
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Value of UWB Personal Area Networking Services to the United Kingdom Final Report for Ofcom This report was commissioned by Ofcom to provide an independent analysis of the costs and benefits which are likely to be associated with the deployment of UWB technology in the United Kingdom, in order to assist Ofcom in its development of policy in this area. The assumptions, conclusions and recommendations expressed in this report are entirely those of Mason and DotEcon and should not be attributed to Ofcom. Mason Communications Ltd 20-23 Greville Street London EC1N 8SS England Tel: +44 (0) 20 7336 8255 Fax: +44 (0) 20 7336 8256 e-mail: [email protected] www.mason.biz DotEcon Ltd 105-106 New Bond Street London W1S 1DN ENGLAND TEL: +44 (0) 20 7870 3800 FAX: +44 (0) 20 7870 3811 www.dotecon.com November 2004 FINAL REPORT FOR OFCOM VALUE OF UWB PERSONAL AREA NETWORKING SERVICES TO THE UNITED KINGDOM MASON COMMUNICATIONS LTD 20-23 GREVILLE STREET, LONDON EC1N 8SS. ENGLAND TEL: +44 (0) 20 7336 8255 FAX: +44 (0) 20 7336 8256 e-mail: [email protected] www.mason.biz DOTECON LIMITED 105-106 NEW BOND STREET, LONDON W1S 1DN, ENGLAND TEL: +44 (0)20 7870 3000 FAX +44 (0)20 7870 3811 www.dotecon.com CONTENTS EXECUTIVE SUMMARY .......................................................................................................3 1. INTRODUCTION ............................................................................................................10 1.1 Study Objectives......................................................................................................10 1.2 Scope of Work.........................................................................................................11 1.3 Industry Consultation ..............................................................................................11 1.4 Structure of the Report ............................................................................................13 2. UWB AND PERSONAL AREA NETWORKING..........................................................14 2.1 What is UWB?.........................................................................................................14 2.2 PAN Applications....................................................................................................17 2.3 UWB Technology Standards...................................................................................21 2.4 Co-existence with Other Radio Services.................................................................25 2.5 Regulatory Scenarios...............................................................................................27 3. COSTS AND BENEFITS OF UWB ................................................................................32 3.1 Sources of Benefits and Costs.................................................................................32 3.2 Net Private Benefits from UWB .............................................................................34 3.3 External Costs Owing to UWB ...............................................................................35 3.4 The Impact of Regulation on Costs and Benefits....................................................37 4. ESTIMATES OF NET PRIVATE BENEFITS................................................................39 4.1 Our Methodology....................................................................................................39 4.2 Regulatory Scenarios...............................................................................................52 4.3 Results .....................................................................................................................52 4.4 Sensitivity Analysis.................................................................................................58 5. ESTIMATES OF EXTERNAL COSTS...........................................................................60 5.1 Our Methodology....................................................................................................60 5.2 Existing Systems within Licensed Spectrum Occupied by UWB...........................63 5.3 Systems to be Included in the Cost Benefit Assessment.........................................65 5.4 Results .....................................................................................................................67 5.5 Summary of Results and Sensitivity Analysis ........................................................90 6. INTEGRATED RESULTS FOR BENEFITS AND COSTS .........................................102 6.1 Methodology for Integrating Costs and Benefits ..................................................102 6.2 Results ...................................................................................................................103 6.3 Sensitivities ...........................................................................................................109 7. CONCLUSIONS AND RECOMMENDATIONS.........................................................110 7.1 Conclusions ...........................................................................................................110 7.2 Limitations of the Study........................................................................................114 7.3 Recommendations .................................................................................................117 Y85A004A Page 1 REV A APPENDICES A COMPARISON OF UWB TECHNIQUES B PRICE SURVEYS AND WILLINGNESS TO PAY ESTIMATES FOR UWB C COST FORECASTS FOR UWB CHIPSETS D TAKE UP AND USAGE FORECASTS FOR UWB ENABLED DEVICES E ESTIMATES OF PRIVATE NET BENEFITS FROM UWB F UMTS MODEL: DESCRIPTION, ASSUMPTIONS AND SENSITIVITY ANALYSIS G PROBABILITY OF ERROR MODEL H SCENARIOS, ASSUMPTIONS AND DETAILED RESULTS FOR WIRELESS BROADBAND ASSESSMENT Y85A004A Page 2 REV A EXECUTIVE SUMMARY This report describes the results of a study on Ultra-Wide Band (UWB) deployment in Personal Area Networking (PAN) environments in the United Kingdom. Mason Communications Ltd and DotEcon Ltd have conducted the study for the Office of Communications (Ofcom), the UK Communications regulator, to assist in the development of regulation of UWB PAN deployment. The study included an extensive consultation process with industry representatives. This report was commissioned by Ofcom to provide an independent analysis of the costs and benefits which are likely to be associated with the deployment of UWB technology in the United Kingdom, in order to assist Ofcom in its development of policy in this area. The assumptions, conclusions and recommendations expressed in this report are entirely those of Mason and DotEcon and should not be attributed to Ofcom. What is UWB? UWB is a technology developed to transfer large amounts of data wirelessly over short distances, typically less than ten metres. Unlike other wireless systems, which utilise spectrum in discrete narrow frequency bands, UWB operates by transmitting signals over a very wide spectrum of frequencies. It is an alternative to other wireless technologies, such as Bluetooth and WiFi, for Personal Area Network (PAN) applications. The principal advantages of UWB over alternative technologies are much faster data transfer rates (100 Mbps or greater) and extended device battery life. It may also offer cost advantages, if chipset production volumes are sufficiently high. Regulations for use of UWB are already in place in the United States and vendors are producing compliant chipsets. Two rival UWB approaches have emerged: a Direct Sequence CDMA standard (DS-UWB); and a variant using a multi-band approach with Orthogonal Frequency Division Multiplexing (MB-OFDM). Both standards are currently being developed within the IEEE standardisation group. The scope of this study is focussed on UWB in PAN environments, although UWB is envisaged for a range of other applications including ground probing radar, security applications, sensing and radio tagging. Since these applications are envisaged to exist in low densities compared to UWB PAN usage, they are not addressed in this study. Thus, the conclusions of this study on costs and benefits of UWB are based on deployment of UWB in wireless PAN environments and do not address the impact of UWB deployed in other environments (such as higher powered outdoor systems). It is nevertheless noted that, in setting the regulatory framework for UWB in the UK, Ofcom will need to address the full range of UWB deployment scenarios. Study Objectives The aim of the study was to estimate the economic benefits and costs associated with UWB deployment for PAN applications. By ‘costs’ and ‘benefits’, we mean negative Y85A004A Page 3 REV A and positive impacts respectively on social value (or welfare) generated for the United Kingdom. For the purposes of this study, we have focused only on the net impact on value across the economy, not on the distribution of costs and benefits between different groups of firms and individuals. Specifically, the study compares the net private benefits to consumers from using UWB-enabled devices (rather than alternative technologies) with potential external costs in terms of spectral interference to other radio services. By offsetting total interference costs against total net private benefits, we can derive an overall value to the United Kingdom from UWB deployment. For the purposes of this study, interference to other radio services relates only to the noise rise generated by UWB in isolation and does not consider the impact of noise from other sources. Scope of Work The scope of