Behind the Ofcom plan: four LTE networks, and not a lot else
Defining technology, without defining technology
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The packaging of radio spectrum often makes a mockery of technical neutrality, and Ofcom's plan for the digital dividend is no exception though the regulator had surprisingly little choice in the matter.
Ofcom's proposal for selling off 250MHz of radio spectrum runs to 555 pages, with annexes and technical reports, but that's indicative of the complexity inherent in defining packages that will create interoperability while maintaining a façade of being technically neutral, not to mention fending off legal threats from existing operators who feel wronged by the whole process.
International interoperability is important to achieve economies of scale, and enable roaming between countries, but it's really hard to get that without dictating the technology to be used (as Europe did with GSM). Ofcom's proposal follows Europe's (mandated) lead in refusing to specify any technology, while packaging and auctioning the spectrum in such a way that makes Long Term Evolution (LTE) the only sensible option.
The regulator achieves that by selling off the lower band (790-862MHz) in 10MHz chunks, each of which is split into two 5MHz channels paired together but spaced 41MHz apart. That's perfect for the current incarnation of LTE (Frequency Division Duplex, FDD) which uses one frequency to send and another to receive, but poorly suited for competing technologies such as WiMAX. LTE can use bands wider than 5MHz, so Ofcom will ensure that bidders get contiguous chunks where possible.
That gap in the middle won't get auctioned off at all, at least not yet.
The left-hand side of this band is still being used for some TV services (until October 2014 in Scotland) which impacts pairs one and two, while over on the right a few PMSE (wireless microphone) users are still clearing out from pairs five and six, and the emergency services are lurking just off to the right, so there's some work to do regarding mitigation. To make things fair, Ofcom is proposing that pairs three and four therefore have a coverage obligation: to provide a 90 per cent chance of 2Mb/sec indoors to 95 per cent of the country. It's up to the bidders to decide how all those issues impact the value of the spectrum.
Up at 2.6GHz, the regulator is slightly less dictatorial, but the majority of the spectrum is still bundled up in FDD-friendly pairs with only a single lot in the middle being sold off as an unspecified lump.
The pairs are 20MHz up here; 10MHz on either side of the 50MHz chunk in the middle. There's less encumbrance in these bands – Ofcom has been trying to get shot of them for half a decade, so there's a requirement for some care has to be taken in avoiding air-traffic control radar (which lurks just off to the right), but other than that it should be clear to use.
When T-Mobile and Orange merged into Everything Everywhere (EE) they promised to give up some frequencies at 1.8GHz, but aren't required to do that until September 2013. EE might chose to do that early, so Ofcom has plans to ensure such a relinquishment results in paired blocks of 5MHz to be sold off, but it's hard to see why EE would bother.
Ofcom's plan also explains how to sell off any 900MHz (2G) bands that operators hand over before the auction date, despite that being rather unlikely. Even the regulator doesn't bother doing the same for the 2.1GHz (3G) bands for which the operators paid so much 11 years ago.
Operators will be examining their options with reference to Ofcom's proposed cap on ownership by a single company, which is proposed at 210MHz of paired spectrum, and the annual licences to be levied on spectrum holdings acquired before the auctions (which we will be looking at later today), but at least they can rest easy knowing that the technology choices have been made, even if Ofcom won't admit it. ®
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COMMENTS
The myth of technology neutrality and the flexibility of LTE
The comments about the superiority of LTE are essentially correct. Furthermore LTE is being developed and will soon be commercial in TDD (unpaired) as well as FDD (paired mode) and in multiple channel widths and frequency bands. While FDD mobile WiMAX profiles are being standardized, so far there have been no indications that any vendor is investing in their development. The idea of pure "technology neutrality" while superficially appealing is a myth, since any pre-defined band plan against which bidders have to make offers will tend to favor one technology over others depending on the choices its developers make. The alternative, long argued for by Intel and others, that bidders for licenses should be allowed to decide what channels and structures they want within a band (i.e a flexible plan like ITU Option 3 for the 2.6 GHz band) is unworkable and inefficient. It is likely to lead to chaos as various bidders try to manage interference between their various paired and unpaired blocks. The result will be a loss of otherwise usable frequencies and capacity and additional delays in being able to deploy networks. This outcome would not be in the interests of customers, which should be paramount.
Not much to see, I think
I think the four operators all want to build LTE. They have all undoubtedly told Ofcom this, and Ofcom has divvied up the spectrum to suit them. As there aren't a lot of other companies jostling in the wings to become new entrants and there is enough spectrum to go round between the four, the situation is quite different from the 2000 auction, when there were lots of potential new entrants. We now have an auction.
Four LTE networks and not a lot else is fine if there is nobody who wants to build anything else. If there is, then Ofcom has maybe let someone or the public down. If not, not so much.
WiMAX FDD
WiMAX also has an FDD mode so you're argument concerning that doesn't hold. But in anycase LTE is better so it doesn't matter. LTE is better for the following reasons:
1) 1ms subframe duration compared to 5ms subframe duration in WiMAX means that LTE can offer better frequency selective scheduling, which means higher throughputs.
2) LTE has more redundant coding of PDCCH compared to WiMAX control channels, so LTE should tolerate interference and drop calls less than WiMAX. LTE in general seems to have better thought out coding.
3) LTE was designed with a lot more input from global telecoms providers, so interoperability across borders will be better.
There are other reasons but these are the main ones. So LTE is a "good thing".
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