If you’ve invested in any Internet of Things companies or bought a smart thermostat or Apple watch you may live to regret it. Current plans by the people who regulate the radio spectrum – OFCOM in the UK and the FCC in the US have plans in place which may stop most of these devices working. As a result they could cost investors and the industry hundreds of trillions of dollars.
To most people this is a very obscure technical subject, but I’d urge you to read on. The problem is that the debate is being conducted by regulatory specialists, who appear to have little idea of the damage they may be doing. The consequences are not percolating up to CEOs and investors, who should be screaming blue murder. The result of that resounding silence could be that any products that use Wi-Fi, Bluetooth, ZigBee, Thread or any other radio that works at 2.4GHz will degrade or stop working. That includes your home internet, smart watches, fitness trackers, hearing aids, smart meters, health monitors, wireless headsets; in fact most of the products which collectively are beginning the make up the Internet of Things. It will be a self-imposed wound which could put the industry back ten years, allowing China and others to leapfrog to a position of technical leadership.
The primary culprits are the mobile networks with their insatiable desire for spectrum. As we use our phones to consume more and more data they want to acquire extra capacity by annexing more of the radio spectrum. Governments realise that they can make big bucks from licensing the radio spectrum (which is seen as a national asset belonging to Governments rather than a public resource). The result is that both politicians and network operators put pressure on the regulatory bodies such as the FCC and OFCOM to clear more of it away from traditional users such as analogue TV, radio and emergency services, so that it can be sold to the networks. As a result, regulators start to get judged on how much radio spectrum they can sell off, despite the fact that it’s a limited resource – something their political paymasters fail to understand. It’s like rewarding loggers for cutting down rainforests for palm oil plantations.
Amid the swatches of spectrum allocated for mobile phones are small islands of spectrum which have been reserved for “other stuff”. They’re known as the unlicensed ISM bands – short for Industrial, Scientific and Medical, and were put aside for anyone to use, provided they observed strict rules to ensure fair usage. Mostly they came into existence because they were at “difficult” frequencies, which had problems for traditional radio users. The most successful of these has been the 2.4 GHz band. Initially shunned because of its susceptibility to rain and fog, it has been the cauldron of innovation in short range wireless which has become home to Bluetooth, Wi-Fi, ZigBee and many other wireless standards. Nobody has to pay to use it. There is no restriction on what you can use it for, as long as you observe strict rules to minimise the chance of interfering with anything else using it. Most of the time it means that products transmit at low power – typically 0dBm to 14dBm, which is 1mW to 25mW – less than 1% of the power of the average mobile phone.
However, in the UK, OFCOM is about to sell off the spectrum that sits just below the 2.4GHz band for use in LTE mobile phone and picocells. They’re planning to allow these to operate up to 250mW. The problem is that when you transmit at these powers quite a lot of that energy strays out into neighbouring parts of the spectrum, deafening the chips in devices and creating radio interference. It’s exactly the same as living next to neighbours with an oversized sound system and no social conscience.
At the other end of the spectrum there’s a different culprit. In this case the villain is Globalstar in the US. They run a satellite service which has a downlink at the top of the 2.4GHz band. By all accounts they’ve not been doing stunningly well. So they’ve changed tack and are petitioning the FCC to allow them to use this band for a terrestrial low power service. By low power they mean as high as 4W, a thousand times greater than most Bluetooth products.
For products operating in the 2.4 GHz spectrum either of these changes would be like trying to hold a conversation whilst standing beside a runway with aircraft taking off and landing. With attacks from both ends of the spectrum it’s like standing between two runways.
Some radios in the 2.4 GHz spectrum have been designed to move away from this type of interference. But with interference coming from both ends of the spectrum they have nowhere to move, other than piling on top of each other in the middle. The result is that they start interfering and ultimately stop working.
The 2.4 GHz ISM spectrum is particularly important as it has driven immense innovation in wireless communications. It has given us Wi-Fi, Bluetooth and ZigBee and all of the applications that they have engendered. A large part of the future of the Internet of Things is being developed using these wireless protocols. In contrast, cellular has led to very little innovation, particularly where mobile operators are involved. They like to believe that they are the Internet of Things, but with cellular modems currently costing $10, shortly rising to $30 for LTE as the 2G networks are turned off, along with costly monthly plans, they are only ever going to be the Internet of Posh Things. Operators have given us most of the innovations we don’t want, like walled gardens, WAP and MMS. It has needed legislation to force them to provide the basic things we want like number portability, cross-network SMS and affordable roaming, and the innovation of external companies to provide the things we desire like smartphones, Twitter and mobile apps. Companies like these are now using the 2.4 GHz spectrum to evolve the IoT. Almost every product on crowdfunding sites like Indiegogo and Kickstarter rely on them.
There is an irony in that mobile networks are increasingly using Wi-Fi to offload data. Most smartphones can no longer be updated over a cellular network, as the networks don’t have sufficient data capacity. Instead you need a Wi-Fi link. But as phones move into the 2.3 GHz band, that Wi-Fi capacity may disappear, making it impossible to upgrade phones. By stealing the spectrum, the networks are shooting themselves in the foot, killing the golden goose which is saving their overloaded networks, and ultimately forcing them to deploy more costly infrastructure.
If they trash the spectrum, they will trash the innovation which will drive the IoT. They also disadvantage millions of vulnerable people who use Bluetooth based medical monitors and hearing aids. And they will trash investment.
There is no doubt that you can make an economic case for the networks gaining more spectrum. The Brattle Group tried to put a figure on it. They estimated that in 2020 the spectrum available to the US cellular industry will generate $400 billion, split into $172 billion in direct services and an additional $228 billion in indirect and induced impacts. That’s assuming it has just over 1,100 MHz of spectrum, which equates to around $36 billion per 100 MHz.
However, if we look at Gartner, they’ve predicted that in 2020, IoT products and services are projected to generate income exceeding $309 billion, with accompanying savings of $1.9 trillion in global economic value.
As they stand, these figures aren’t quite comparable. Brattle is US specific, whereas Gartner is global. The Gartner figure does not include cellular or smartphones, whilst the Brattle one does. But taking a simple approach to normalise then suggests that for the US in 2020:
- 100MHz of cellular spectrum at 2.3 GHz will generate $16 billion with $21 billion of secondary impact
- Keeping the 2.4GHz band useable generates $103 billion with $633 billion of secondary impact
So it makes no economic sense to sell off the 2.3 GHz spectrum. But that’s just the start of the financial folly of these plans. Other countries are not so desperate to see spectrum sold off in order to service their Government’s debt. Today the US and Europe are leading IoT innovation. Anything which stalls that could pass the baton to competitors, passing leadership in IoT elsewhere, which will be where much of the ongoing revenue will go as well.
The problem is that the arcane and esoteric nature of spectrum regulation doesn’t excite politicians or CEOs. This is all happening almost invisibly. It won’t be until it’s too late that companies will see that their product plans are in ruins and investors realise their money is gone forever. Regulators appear to have only one metric at the moment – get short term licensing income. To give them credit, OFCOM have commissioned some testing which shows that devices operating at 2.3 GHz cause significant interference. But what the hell, they’ve decided to sell it off anyway. Many regulators I’ve met actively dislike the innovation that is taking place within the 2.4 GHz band because it is out of their control. They may be secretly happy to squeeze that innovation out. But it challenges the future of the industry.
If you use these products, manufacture or develop them, or have invested in companies that do, you need to make your voice heard. Express your concerns to regulators and politicians and explain the damage they are doing. In the UK, OFCOM currently have a consultation open requesting views about them selling off the 2.3 GHz spectrum. It’s largely hidden and is only open until 26th June, but you can find it here. It says everything about their priorities that it’s not on their main consultation page, doesn’t appear in their search engine and they’ve only given companies who might be affected a scant four weeks to find it and reply. It’s worthy of the “Hitchhiker’s Guide to the Galaxy”:
“But the plans were on display…”
“On display? I eventually had to go down to the cellar to find them.”
“That’s the display department.”
“With a flashlight.”
“Ah, well, the lights had probably gone.”
“So had the stairs.”
“But look, you found the notice, didn’t you?”
“Yes,” said Arthur, “yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.”
Please do respond to let them know your views. Standards like Bluetooth and Wi-Fi have transformed communication, product design and usage models. It would be iniquitous if faceless officials were allowed to destroy all of that.