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Tech companies poised for white-space spectrum

With the FCC about to finalize "white space" rules, Microsoft and others are working on wireless products that use the unlicensed spectrum that sits between TV channels.

Technology companies plan to put unused wireless spectrum that sits between TV channels to use when the Federal Communications Commission finalizes rules for the new spectrum next week.

Companies such as Microsoft, Google, Hewlett-Packard, Intel, and Motorola, are already testing products that will use unlicensed wireless spectrum called "white spaces," which sit between broadcast TV channels.

The 300MHz to 400MHz of unused "white space"spectrum is considered prime spectrum for offering wireless broadband services because it can travel long distances and penetrate through walls. The FCC unanimously agreed in November 2008 to open up this spectrum for unlicensed use. Even so, technical issues to allow device makers and service providers to use the spectrum still need to be worked out.

Next week, the FCC is expected to vote on new rules that will pave the way for companies to begin development of new products that can use this unlicensed spectrum.

In recent interviews with The Wall Street Journal and Bloomberg, Dan Reed, Microsoft's corporate vice president for technology strategy and policy, said that devices using "white spaces" could be on the market within the next two or three years.

Microsoft has been testing new technology that uses the unlicensed spectrum on its 500-acre Redmond, Wash., campus. The company built the wireless network using only two base stations to transmit the signals via the white-space spectrum. Signals that use the white-space spectrum travel at least three times farther than signals transmitted over other unlicensed spectrum, such as Wi-Fi. This means it can cover an area that is almost nine times as large as one that uses Wi-Fi and because it operates at a much lower frequency than Wi-Fi, it can penetrate buildings much more easily.

Microsoft showed off its network to FCC Chairman Julius Genachowski in April. Genachowski has been bullish on the use of white-space spectrum to spur innovation in the mobile broadband market.

"The goal here is to spur the development of another new, huge industry," Genachowski said in a recent interview with Bloomberg.

Genachowski and others have compared the white-space market to Wi-Fi, which also does not require a spectrum license. Wi-Fi has become a $4 billion-a-year industry. And Genachowski believes that the white-space market could be even bigger. Last year, Microsoft commissioned research that suggests white-space applications may generate $3.9 billion to $7.3 billion in economic value each year.

In addition to spurring a new market for entrepreneurs, the FCC also sees white-space technology as a way to achieve some of the goals laid out as part of the National Broadband Plan. In that plan, the FCC said it would free up 500MHz of new wireless spectrum within 10 years for licensed and unlicensed use. The plan recommends that 300MHz of that spectrum should become available within the next five years. White-space spectrum is part of this plan. Earlier this year, the city of Wilmington, N.C., and the surrounding county of New Hanover were among the first communities to test wireless applications using TV white-space technology.

The process of rolling out products and services using white spaces has been delayed by TV broadcasters and others that are concerned that the use of this spectrum will interfere with their own services. But companies, such as Microsoft, Google, Intel, Dell, and Motorola, which have also been lobbying the FCC, have been working to demonstrate products that mitigate interference.

The rules the FCC will adopt next week will help ensure that white-space users don't interfere with applications that use this spectrum either on a licensed or unlicensed basis.

Private sector readies
Now it will be up to technology companies to build the products that use the spectrum and it will also be up to service providers to create new related services. Because the amount of excess spectrum will vary by market, it's unlikely that white spaces will be used to create a nationwide wireless broadband network. But the spectrum could be used by new wireless service providers to create new regional services. Or it could be used by incumbent wireless operators to augment existing wireless networks.

Because the spectrum will be unlicensed, it will be much less expensive for companies to develop business models to build and manage new networks. But even though the spectrum is unlicensed, it doesn't mean that services will be free. Network operators building networks using the spectrum will still need cash to build the networks.

But because the capital expense of building these networks should be much less than the cost of acquiring spectrum and then building a network, the hope is that service providers could offer services at lower costs or even free if they're supported by advertising or some other business model.

Microsoft has used some of its own prototype devices to demonstrate the viability of white-space technology on its experimental network. And it has built its own geolocation database to check for interference. But it doesn't expect to build commercial white-space devices, nor does the company expect to build or manage a database that will be used by devices to detect available spectrum in a particular market. (In order to avoid interference, white-space devices will need to refer to a geolocation database that will tell the device which spectrum bands are available.)

Instead, Microsoft plans to turn to hardware partners to build the technology into products such as mobile phones, Netbooks, and laptops. And it is happy to allow other companies to build and manage the databases.

"As long as there's free and open access to the information, I don't think there are any concerns," Microsoft's Reed told Bloomberg.

Reed also said in the Bloomberg interview that he expects multiple companies to maintain databases for white-space networks, including Google, which said in January that it would build and operate a white-spaces database.

Even though Google has volunteered to build a database, the company told Bloomberg it's happy to allow others to build one if the FCC chooses another provider or providers.

"We just want to see a database authorized and built," Dan Martin, a spokesman for Google told Bloomberg.