6. The Impact of Technology

Technology and the Spectrum

Communications

Broadcasting

Short Range Devices

Mesh Networks and Spectrum Commons

Conclusion

This chapter describes and discusses the impact of changing technologies on New Zealand's management and use of the spectrum

Technology and the Spectrum

251. New Zealand spectrum policy is, in principle, technologically neutral, 36 and as far as possible leaves decisions on use of the spectrum to the market, which is generally considered to be in a better position than government to make decisions on technical innovation. Where the nationwide management right over a spectrum band has been sold to a commercial entity (e.g. cellular spectrum), that entity decides what technology to use when it deploys the spectrum, provided it does not cause interference in adjacent bands. Some restrictions in technology are inherent if the Crown retains management control of the spectrum band, but the Crown seeks to apply technological neutrality as far as is practicable.
252. As well as creating new services, new digital technologies generally enable more efficient use of the spectrum. The spectrum management regime needs to provide suitably flexible arrangements for users to migrate from legacy technologies. Recent examples are the Government decisions 37 surrounding spectrum for digital television broadcasting, and a new band plan for the lower UHF band to support high-efficiency digital linking services. Emerging opportunities that will need to be considered include spectrum for digital radio broadcasting, 802.16 broadband services, 4G mobile services, and new services based on ultra wideband (UWB) technology. Greater deployment of GULs may be an appropriate means of encouraging and supporting new technologies.
253. Many new technologies are partly or wholly self-managing, in that operators are able to access a frequency band without individual licensing (in New Zealand, under a GUL) and are responsible for ensuring that their transmissions do not cause harmful interference for other users. For software-defined radio, which automatically seeks out an interference-free frequency, the latter is not even a consideration. Hence, the task of band managers has the potential to be considerably reduced, with increasing opportunities for administrations to establish light-handed spectrum management regimes with minimal compliance costs.
254. New Zealand's physical isolation from neighbouring countries ensures that much of the spectrum can be used without having to coordinate with neighbours over potential interference. This, along with consumer acceptance of new technologies, places New Zealand in an ideal position to be used as a test bed for the development of new wireless technology products. The challenge is to promote this opportunity to foreign entrepreneurs and to develop partnerships that support a longer-term exchange of funds, knowledge and capability around new technologies.

Communications

255. The technology for delivering telecommunications services is constantly evolving on a long-term cycle. Cellular mobile technologies, for example, tend to follow a ten-year sequence from inception to obsolescence. The spectrum for 3G services was identified and made available at an international level in 1992, after some years of planning. Planning has already commenced within the ITU for the introduction of 4G, or next generation cellular service, even before the world-wide implementation of 3G services.
256. The introduction of such new technologies as 3G presents significant challenges as the spectrum nominated by the ITU may be identified in New Zealand for use by other services or technologies. For example, the ITU is considering additional allocations in the SHF band, which conflict with New Zealand's current use of the relevant frequencies for outside broadcast operation. In this situation, Government must consider the highest value use for the spectrum and whether to transfer the outside broadcast frequencies to another band.
257. Improved modulation systems allow the spectrum to carry greater amounts of traffic. To profit from such technical developments, a service provider will typically replace a complete system at one time, which is a significant investment. These updates are planned and implemented in conjunction with the Ministry. Licensing policies permit upgrades provided that other licensees are not adversely affected, and encourage licensees to use technically efficient systems.
258. Current technical developments are characterised by a convergence of telecommunications and IT systems, with ISPs in particular offering more bandwidth and higher transfer rates to customers. Typically, the technology to provide the necessary bandwidth is purchased in international markets, which in turn dictates which bands are suitable for their deployment. This tends to place pressure on those bands.
259. Considerable work is underway in the equipment industry and in the ITU on innovative radio systems, including ultra wideband and software defined radio. The developers of these technologies often have an IT rather than a radio background and this is leading to the development of systems that challenge existing spectrum management policies and processes. Following overseas trends, it is likely that much of this technology will operate in "public park" spectrum. Existing licence-holders are concerned about possible interference from such systems.

Fixed Wireless Access

260. FWA is a method of delivering broadband data to individuals and (usually) small business concerns. An FWA network typically consists of a fixed radiocommunications base serving multiple clients ("point-to-multipoint"). FWA services can augment or bypass existing copper cable networks for telephony and Internet applications. FWA is available in a number of frequency bands which have been assigned in the form of management rights, including spectrum in the 2 GHz and 3.5 GHz bands (known as "1098 bands" and "MDDS bands"), where two management rights are retained under Crown management.
261. Woosh Wireless's network uses 2 GHz spectrum, BCL has access to both 2 GHz and 3.5 GHz spectrum for its "Extend" network, and Counties Power's "Wired Country" wireless network uses 3.5 GHz spectrum. Other telecoms operators hold spectrum (e.g. Telecom [MDS] and TelstraClear [2 GHz and 3.5 GHz]) but have yet to roll out fixed wireless access networks on a commercial basis.
262. Developed from short-range indoor WLAN technology, fixed wireless access services can also be provided in the GUL bands. Current examples are Wellington's CafeNet, ThePacific.Net (a PROBE supplier) and a number of commercial, community and domestic networks around New Zealand.
263. LMDS spectrum in the upper SHF band has been assigned as management rights, largely to telecommunications providers. These rights remain largely unused as suitable technology to make effective use of this spectrum is not yet available at a reasonable cost.

Satellites

264. Satellites transmit from outside New Zealand's territorial jurisdiction, providing fixed and mobile telecommunications links, and broadcasting services. For satellite communications, a licence is required under the Radiocommunications Act to transmit (up-link) to the satellite, but only if the uplink is from within New Zealand's jurisdiction. The ITU requires satellite operators to coordinate their intended operations with the administrations that may suffer interference from, or who may otherwise be affected by, their proposed operation. No licence is necessary under the Act for transmission from a satellite (down-link) to New Zealand, but a satellite operator may seek a "receiver protection licence" to protect satellite down-links against interference from terrestrial transmitters operating in the same frequency band.
265. As a member of the ITU, New Zealand has the ability to file applications for, and to use, satellite allotments. The Act does not provide explicitly for satellite filings or for the exploitation of satellite allotments, which are currently dealt with as a matter of government policy.
266. A large number of existing satellites can be accessed from New Zealand, depending on the reception or transmission equipment used. In general, satellites which have a focussed (and therefore higher power) New Zealand "beam" are most suitable for such consumer services as satellite broadcasting or broadband Internet access. Other satellites require larger aerial dishes for clear reception, and are more suited to telecommunications linking or transmissions between ground stations.
267. Television satellite services to New Zealand are currently provided by Sky TV and TVNZ via the Singtel-Optus satellite network. Other satellites in foreign ownership support a variety of telecommunications, navigational, military and meteorological services. New Zealand's consent is required before anyone can establish a satellite that utilises or restricts the NZ satellite positions allotted by, and registered with, the ITU.
268. In July 2002, the Ministry filed applications with the ITU for satellites known as "NZLSAT1-4" at 158_East, covering four frequency bands outside New Zealand's current satellite allotments, which may be used for a range of broadcasting and telecommunications services. In combination, the NZLSAT filings and the Fixed Satellite Services (FSS) and BSS allotments in the planned bands to some extent "reserve" the 158_East orbital position for New Zealand, as any person who subsequently proposes an incompatible satellite must seek to co-ordinate with these filings and allotments.
269. There may be interest from commercial entities in using any combination, or all, of the BSS or FSS plans, NZLSAT filings, or other frequency bands at 158_East. Following recent Cabinet decisions, the Ministry has published guidelines regarding applications to access all or any of these.

Radio Sub-Carrier Services

270. These are audio or data services added to a normal FM transmission which require a specialist receiver, or RDS (Radio Data System) type transmissions which are designed for use by consumers through readily available receivers. Both types of services require appropriate licence parameters. Use of sub-carrier type services generally necessitates a slight reduction in effective coverage of the main programme, or a wider spectrum allotment. A number of licences have been created to allow RDS services.

Software-Defined Radio

271. In its basic form, software-defined radio (SDR - also known as "cognitive" or "smart" radio) allows the user to send and receive information on any available frequency without adjusting or replacing the associated hardware, as all the relevant coding and decoding of signals is performed by computer software. It is expected that SDRs will eventually have the capacity continually to locate and utilise any unoccupied spectrum within their operating range.
272. SDRs will be particularly effective for utilising unassigned and idle spectrum, "white space" (operational spectrum not in immediate use), 38 guard bands and public parks. The technology is still in the laboratory, but roll-out is expected to be rapid and have far-reaching effects on spectrum policy and planning.
273. None of New Zealand's current licensing types is particularly well-suited to managing the use of SDRs, as all three regimes are based on regulating access to specified frequencies. Some form of GUL covering, say, the whole of the UHF band, or a designated spectrum commons, 39 may have to be considered.

Ultra Wideband

274. A growing technology, ultra wideband devices operate below the power floor on bandwidth many times greater than conventional radiocommunications devices. The bandwidth required implies use across a number of "normal" bands, which above the power floor may be populated by a variety of more conventional technologies. Likely to operate under the GUL regime, UWB devices typically include: high speed data communications; imaging apparatus used in law enforcement, rescue operations and medicine; automotive anti-collision radar; and such indoor/handheld communication equipment as wireless laptops or audio and video links. They generally cause minimal interference to radiocommunications in the same band but they can, in sufficient aggregations, raise the noise floor and may need to be lightly regulated in bands where sensitive devices are deployed (e.g. GPS, radio-astronomy).

Broadcasting

275. Broadcasting is a somewhat different to most uses of the spectrum in that the largest overall investment is made by the consumer through purchase of the necessary receiving equipment. There are several new transmission technologies available for broadcasting services. The new technologies can add supplementary features to existing services, using existing receivers or requiring a new type of receiver. The critical factor in implementing a new transmission technology is the recommendation by Standards New Zealand of a given technical standard to ensure that receivers read the transmitted signal accurately.

Digital Television (DTV) Broadcasting

276. DTV standards have already been adopted by consensus amongst interested parties in New Zealand. The preferred DVB (Digital Video Broadcasting) family of standards is suitable for cable, satellite and terrestrial broadcasting. Television New Zealand already uses the DVB-S standard for its satellite service, as does Sky's conditional access system.
277. Broadcasters will need to decide whether to transmit DTV broadcasts by terrestrial or satellite platforms, or both. Implementation of either is likely to incur a considerable cost for simulcasting, additional spectrum, and equipment conversion, with no corresponding profit. Representations made to Government by broadcasters have included requests for free spectrum for simulcasting, and the naming of a specific analogue cut-off date.
278. Current Cabinet policy is to facilitate industry planning and decision-making, but to leave the pace and timing of DTV implementation to the market, with an expectation that public broadcasting services will take a leading role. The government has, nonetheless, planned spectrum for both digital audio and digital television broadcasting, 40 and has requested TVNZ and MTS to prepare plans for implementing DTV.
279. Government's identification of spectrum for DTV may limit further development of analogue broadcasting. Policies have been developed for protecting, creating and assigning licences suitable for terrestrial digital services, but it is not certain that these alone will motivate either broadcasters or viewers to adopt digital services. Should progress to digital services not take place, then the restrictions created by the reservation of spectrum for such services will need to be reviewed.
280. A number of overseas administrations are developing policies for the implementation of digital television (DTV) broadcasting, with mixed results. Key issues are:

• the greatest proportion of the cost of conversion falls on the consumer, who at the very least has to purchase a decoder (commonly known as a "set top box") and may ultimately have to buy a digital receiver;
• without strong incentives in the form of improved reception quality and/or interactive services, consumers have no reason to make the transition;
• during the transition from analogue to digital reception, parallel broadcasting ("simulcasting") of content is usually necessary, requiring extra spectrum and incurring additional broadcasting costs, but providing no extra profit incentive; and
• in order to clarify the timeline for initiating digital services, simulcasting, and replacing equipment, broadcasters and consumers see a need for the certainty of an "analogue cut-off date".

281. Australia has recently attempted to establish DTV broadcasting, conditional upon transmission of a proportion of digital content in high definition (HD) format. Penetration of consumer markets has, to date, been relatively low 41 and the cost to broadcasters of producing in HD format is reported to be relatively high. There has been some criticism of this approach, and particularly that broadcasters are not afforded greater flexibility to choose between increasing standard digital content or converting existing content to HD format.
282. The UK has probably had the most successful penetration of DTV, reaching 13 million households (53%) by 31 March 2004, largely because of heavy government investment via the BBC's digital services. A little over half of this total is accounted for by satellite TV. Digital terrestrial television (DTT) supplies a further quarter, with the remaining 20% being received by cable. Despite this rapid growth, there continue to be difficulties in confirming a cut-off date, as 43% of households are still reliant on analogue services.
283. The USA's DTV services are provided almost exclusively by satellite and cable. DTT accounts for only 2% of the market, despite encouragement by the FCC. As of May 2003, more than 1,000 stations were on the air with DTV signals, and every major TV market was served by at least one DTV station. The cut-off date set by Congress for the completion of the transition to DTV is December 31, 2006, but that date is to be extended until a majority of homes (85%) have made the transition. At that point, broadcasting on the analogue channels will end and that spectrum will be put to other uses. Until the transition to DTV is completed, television stations are required to broadcast on both their digital and analogue channels.

Digital Radio Broadcasting

284. A variety of transmission standards has been developed for digital radio, but until recently none had been implemented in major markets. There are three potential standards:

• EU's Eureka 147, which allows several audio transmissions to multiplex on a single frequency;
• IBOC (for In-Band On-Channel), which "piggybacks" a digital transmission on an analogue frequency (particularly useful for transitional simulcasting); and
• DRM, which being trialled by Radio New Zealand.

285. Broadcasting to either standard requires a receiver configuration unique to that standard. Without any specific government action, digital audio is likely to be implemented in New Zealand only when affordable consumer-grade receivers are available.

Short Range Devices

286. Short Range Devices (SRDs) 42 using low power radio transmitters have a wide variety of applications. They are at the forefront of consumer demand and technical development, and create an ever changing environment for the spectrum regulator. Individual SRDs, as the name implies, have a small operating range, but their use is proliferating exponentially. They are a significant user of the spectrum. They include:

• industrial scientific and medical devices (ISMs) where the radio energy is used for a purpose other than communication: e.g. industrial kilns for drying wood, medical diathermy and domestic microwave ovens;
• communication of data over short distances, as in wireless local area networks (WLAN or WiFi);
• telemetry and telecontrol: e.g. Radio Frequency Identification (RFID) tags used for animal ID and to track individual goods and pallets of cargo;
• radio-controlled models and toys;
• baby-minders;
• security devices: e.g. keyless car locking and garage door openers; and
• proximity detectors: e.g. security detectors and (soon to be seen) car radar systems for collision avoidance.

287. Spectrum allocated to SRDs in this country is about 5% of the usable total. Each of the SRD bands is assigned under a GUL. This gives any number of operators access to the band without a requirement for an individual radio licence. The GUL carries the basic technical specifications of the equipment and the conditions of use. Under GUL licences, operators of SRD devices have no protection from interference caused by other users of the spectrum. Similar levels of regulation are used by authorities in other countries.
288. There is rapid growth in the diversity and magnitude of markets for SRDs, with light handed regulation of the SRD bands providing easy access for all users. Because SRDs have to work in a busy, unmanaged spectrum environment there is a growing trend to build more intelligence into the equipment. Such features as the ability to identify a clear channel before transmitting and radiating sufficient power to meet only the needs of the transmission are becoming mandatory in some WLAN bands shared with other users.
289. In some bands, New Zealand has less spectrum allocated to SRD use than many overseas jurisdictions. In the 900 MHz band, for example, the spectrum allocated to SRDs is 25% of that allocated in the USA and half that allocated in Australia. Given New Zealand's relatively small population and usage this is not a problem of capacity per se. Imported equipment engineered for US or Australian use cannot always be operated in the bandwidth available here. Equipment purchased overseas, therefore, may cause interference with studio-to-transmitter links and mobile services in New Zealand. There are similar issues in the 860 MHz and 5.5 GHz bands. It may be possible to address this issue with more selective border controls or extensions to multilateral standards agreements.

290. The SRD market is readily accessible to all distributors and users. Provided the specified equipment standards are met, the product may be distributed as a consumer item. Typical are WLANs, Bluetooth products, garage door openers and cordless doorbells. This type of market tends to attract large volume manufacturers producing low cost goods for mass distribution.
291. Major network operators have little interest in using SRDs for their core networks, as GUL bands do not provide the quality of service required. SRDs do offer, however, an easy start-up environment for new entrants and enable small enterprises to compete with large service providers. This is seen in the recent growth of regional internet networks.
292. There is no charge for use of the SRD bands and they remain "public property" with access available for all parties. Because of the lack of protection from interference and potential congestion they do not compete directly with the licensed bands but rather provide a broader range of options for the spectrum user.
293. Within the NZ environment there appears to be a reasonable understanding of the rights and limitations of operating under a GUL. Some operators, however, seem to assume that good quality of service will always be available using such bands. Others try to use the lowest cost solution even if it does not meet the conditions of use specified in the GUL. It is difficult to manage these issues where there is no record of users and no income from fees to support education or compliance management.
294. Although modern radiocommunications equipment has the capacity to distinguish meaningful signals from noise, the signal must first be above the noise floor. The more SRDs operate within a band the higher the noise floor and, consequently, the narrower the range of discernible transmission for all devices operating in the band. Options are to restrict entry in favour of essential users or to spread the load over additional SRD frequencies.
295. The ITU offers no significant guidance on the management of SRDs. Until recently the only germane reference in the ITU Regulations was in a definition of ISM (Industrial, scientific and medical SRD) bands. There is worldwide demand for the allocation of more spectrum to SRDs and each regulator has responded in its own way. There is a strong desire for internationally recognised standards, to stimulate competition and reduce the use of non-standard equipment. However each authority, including New Zealand, has to work around legacy systems and strike a balance between the rival standards and frequency ranges offered by products sourced from Europe and the USA.
296. In many countries alternative regulatory regimes are being considered to meet increasing requirements for SRD operating space. These include:

• where there are low volumes of SRDs operating, light licensing to record SRD systems with the potential to cause interference with licensed services;
• regional allocation of under-utilised spectrum for SRD use (e.g. the US Federal Communications Commission [FCC] is considering the use of unused TV channels for rural broadband networks); and
• sharing spectrum between technically compatible services (e.g. ultra wideband services operating in broadcasting bands).

Mesh Networks and Spectrum Commons

297. The new technologies afford opportunities for networks and services to be constructed in innovative ways. Two examples follow.

Mesh Networks

298. In a mesh network, each radio device (a "node") acts as a router as well as a terminal; i.e. it not only transmits and receives data for its operator but also relays data for other operators. As long as each node is within range of another there is net-wide coverage. Unlike networks relying on a single line-of-sight base station, mesh networks can relay around transmission barriers, including high ground and the earth's curvature, and can extend to theoretically unlimited distances. A functional mobile mesh network includes base stations that provide gateways to other services and to the Internet, and mobile nodes that relay data to each other and to base stations. The capacity of the net increases in proportion to the number of users.
299. Mesh networks are able to employ very low transmission power, as the range between devices is usually short. Consequently, they operate below the power floor of more conventional radio technologies and can utilise a wide range of spectrum bands without creating interference. The system is yet to impact on the radiocommunications market, but trials in the USA are giving positive results.
300. There is nothing to prevent commercial operators from setting up a mesh network in New Zealand. It may, however, be in the public interest for government to intervene, in that a common "open access" network used by all commercial operators would be of greater capacity and be more spectrum efficient than any number of smaller separate networks.

Spectrum Commons

301. Rather than property, spectrum should be left in a "commons" - […] a public space. Like a freeway, or a public park, use of a spectrum commons would neither be regulated nor [be made property]. Its use would, instead, be free for anyone, subject only to a few simple rules about devices. [Code Breaking: Spectrum for All, Lawrence Lessig] 43
302. There is increasing lobbying overseas, notably in the USA, for spectrum to be wholly unregulated, open to all users as "spectrum commons". This is more of a practicable proposition than it might have been a decade ago. The advent of smart radio, capable of continually finding and linking through interference-free frequencies, 44 may make conventional spectrum assignments irrelevant. One commentator has observed that, once the technical capacity exists to distinguish a particular radio transmission from the background chatter of other signals, it makes no more sense to licence spectrum than it does to licence sound waves.
303. Proponents of spectrum commons have to address successfully such issues as:

• the widespread availability of smart technologies, most of which are still in the laboratory;
• the implementation of relevant access and relationship protocols
• harmful interference - there appears to be an assumption that the technology will manage this without human intervention;
• loss of spectrum rights, which are business assets with a significant book value and associated capital investment; or
• public safety and security reservations including, in particular, those for emergency services and navigational aids.

304. New Zealand has already made some progress in the introduction of "public park" spectrum under its GUL regime, and appears ready to accommodate new technologies as they are introduced. Further allocation of such spectrum to these technologies has to be contingent on the regulator's satisfaction with interference issues.

Issue 6.1

What would be the costs and benefits of establishing a partial or complete spectrum commons in New Zealand?

Conclusion

305. New technologies are shifting the emphasis in radio spectrum management away from frequency allotment within clearly defined engineering parameters to open access systems operating concurrently in broadly defined spectrum bands. While presenting the band manger with opportunities for more intensive use of the available spectrum, new technologies operating in a public park environment are difficult to regulate, particularly with respect to raising the noise level and creating interference problems for other users of the spectrum. Regulatory authorities may therefore have to consider modifying their legislative basis and administrative procedures, and increasing levels of monitoring.

Issue 6.2

What changes, if any, are required to the New Zealand legislative and regulatory environment to accommodate new technologies?

36 In practice, spectrum allocation is largely dictated by the technical specifications of radiocommunications equipment manufactured overseas in conformity with ITU guidelines.

37 EDC Min (03) 19/5

38 95% of spectrum licensed to the US Government is unused at any given moment (Economist, 14 August 2004, p58)

39 See, for example, paragraph 349, final paragraph.

40 There is also potential for UWB services below the noise floor in these frequencies.

41 However, penetration is likely to be affected by other policies: for example, the restriction on free-to-air broadcasting over multiple channels, except for strictly controlled types of content (e.g. educational programming).

42 An Engineering Discussion Paper on Spectrum Allocations for Studio to Transmitter Links.

43 Code Breaking: Spectrum for All [external link] CIO Insight website

44 …still in the laboratory at the time of writing…