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The second time around

Apr 1, 2008 12:00 PM, BY CRAIG BIRKMAIER

Love the one you're with

Obviously the debate over licensed vs. unlicensed uses of our scarce spectrum resources is steeped in history. It also has strong ties to the issue of government protection of the monopolies and oligopolies it has created via regulation of the telecommunications industries.

The breakup of AT&T serves as an excellent backdrop to the white spaces debate. Prior to the breakup of AT&T, the market for telephone devices was a monopoly for AT&T and its manufacturing subsidiaries.

The greatest effect of the breakup came from the regulations that allowed any company to manufacture and sell devices to connect to the telephone systems operated by the seven Baby Bells. This not only caused the price of a telephone to become extremely competitive, it also enabled a period of innovation, bringing a wide range of new telephones and services to market. Perhaps the most relevant parallel to the white spaces debate is the birth and proliferation of wireless telephone handsets using unlicensed spectrum.

The inbreeding of the Baby Bells inevitably led to their getting back together again, after consumers fell in love with cellular phones they can use anywhere. Unfortunately, not only did the Bells renew their matrimonial vows, they managed to create a new oligopoly in the image of Ma Bell.

Today, wireless service is sold with long-term contracts that subsidize wireless phones, which only work with one carrier. Service portability is virtually nonexistent, and the business model offered by all of the cellular carriers is based on controlling everything you do on their networks.

Preventing attachment

Google and others in the IT industry asked the FCC to impose restrictions on some of the 700MHz spectrum that is currently being auctioned. They asked for, and the FCC approved, regulations that allow any device to be attached to the networks that operate in the large C block of the spectrum auction. They also asked for, but did not get, the ability to force the successful bidders for the C block to sell bandwidth on their networks wholesale to potential competitors.

Google put up the performance bonds required to bid in the current spectrum auction. However, it appears that it dropped out of the bidding wars after it was clear that the FCC minimums were met. Apparently, what Google and the other White Space Coalition members really want is the ability to create a new marketplace for unlicensed devices in the TV band white spaces.

Moving targets

To be honest, the real value of the TV bands no longer lies in the ability to deliver TV to fixed receivers in the home. Its value is tightly coupled to legislation and regulations that allow broadcasters to seek compensation for their signals from the multichannel cable and DBS systems. Retransmission consent payments are becoming a significant contributor to bottom-line profits for TV broadcasters.

As a result, it appears that broadcasters are rekindling their romance with devices that use an antenna to pick up their DTV signals. The ATSC is currently evaluating technologies that will support mobile and handheld devices that require a more robust modulation standard than 8-VSB, which was designed and tested using the same methodology used by the FCC for the NTSC standard — an outside antenna on a 30ft mast.

The mobile standard is expected to be finalized this year, with the potential that mobile services could begin after the end of the DTV transition next year. The questions: What will these services be? And how can broadcasters create new revenue streams from them?

What we need

Duplication of the legacy free-to-air TV broadcast model for mobile devices does not appear to be a compelling application. Attempts to create a subscription multichannel service hold great interest among broadcasters, but the cellular phone system operators have had little luck selling subscription TV packages to their customers.

What is needed is a new business model that delivers bits to things that move — not another ISP that provides two-way Internet connectivity, but a system that pushes all kinds of services to mobile devices.

The ability to determine what services are available and to teach devices to capture bits of interest may depend on limited two-way connectivity. If the device is a cell phone or a Wi-Fi connected notebook computer or handheld, that back channel may already exist.

It would be far more desirable, however, to use the white spaces for this back channel. Fixed point-to-multipoint ISPs could provide cheap broadband links to the TV in the family room. Unlicensed portable devices could use the white spaces for the back channel and the mobile standard to deliver services, all in the same TV bands using a common tuner.

Perhaps the time has come for broadcasters to think differently the second time around. Broadcaster support for unlicensed devices that use the white spaces could lead to a whole new consumer love affair with broadcast TV.

Craig Birkmaier is a technology consultant at Pcube Labs.