Difference in Value of Licensed, Unlicensed Spectrum Will Narrow

Very few observers would say that, today, unlicensed spectrum has the same value as licensed spectrum.

But there are ever-fewer who would argue that the differences will remain as pronounced as they presently are, as a foundation for business strategy.

There are several reasons why the value of licensed or license-exempt spectrum is nearly certain to narrow. To start with, significantly more licensed spectrum, plus more unlicensed spectrum, will be allocated.

Since scarcity drives price, prices should moderate, at least for new spectrum in the millimeter bands. Since signal reach and bandwidth are directly related to frequency, and since most of the new spectrum is in the high frequency millimeter bands, capacity will increase far more than the stated bandwidth would suggest.

In other words, any given amount of bandwidth at millimeter frequencies vastly outstrips the same amount at lower frequencies (600 MHz to 800 MHz).

At the same time, as some countries move to allow spectrum sharing in bands currently allocated to government users (initially in the 3.5-GHz bands in the United States and 2.3 to 2.4 GHz bands in Europe, spectrum supply also will increase.

Finally, Wi-Fi bandwidth increasingly will be made more “carrier-like,” in terms of its predictability.

Also, the use of public Wi-Fi (including huge networks of “homespots” that leverage consumer fixed connections) will create coverage that is more ubiquitous than ever before possible.

Dynamic access databases, cognitive radios and frequency-agile devices will enable sharing where that has not been possible before.

The two major standardized approaches, Licensed Shared Access (LSA) in Europe and Authorized Shared Access (ASA) in the United States,  

In Europe, shared access is being tested in France. In the United States, the 3.5 GHz band will be first to see shared spectrum. Both the 2.3 GHz and 3.5 GHz bands have been designated for mobile broadband by the International Telecommunications Union.

The upshot is that the value of licensed and license-exempt spectrum to support mobile access is going to narrow.