How I learned to Stop Worrying and Love Interference

UW Econ NPI Brownbag

12 December 2010

Pierre de Vries

1

Intro

Who I am

– Physicist by training; VC, consulting; managing software development; then tech policy

– Self-supporting researcher: EPRC, SFC

Goal of Talk

– Get you interested

• Survey of radios & regulation

• Give a flavor of the problem

– Get feedback and ideas

• Outline the 3Ps proposal

• Sketch a model

Three perspectives/guilds

– Law

– Engineering

– Economics

Jargon Test:

– FCC, APA

– dB, OOBE

– Coase Theorem, Cathedral Rules

2

Outline

Introduction to Radio Regulation

– Radio communications

– Interference mechanisms

– Regulatory landscape

The 800 MHz case

An approach to regulation

– Problems

– Principles

– Proposal

A Model

3

Radio Communications

Radios produce electromagnetic waves that move through space

4

Transmitter Receiver

Antenna Antenna

Transmission Line Transmission Line

Radio Waves

Source: Dale Hatfield

Radio boundaries are Fuzzy

Geography

Frequency

(Omitted: Time, Coding, Polarization, …)

5

KOMO contour

http://maps.google.com/?q=http://www.fcc.gov/fcc-bin/contourplot.kml?gmap=2%26appid=429542%26call=KOMO-TV%26freq=0.0%26contour=41%26city=SEATTLE%26state=WA

6

KOMO coverage

http://www.tvfool.com/?option=com_wrapper&Itemid=90 7

KOMO Coverage (detail)

8

Site General Propagation Model

Source: NTIA ITS (?) via Hatfield

Site Specific Propagation Model

Source: NTIA ITS (?) via Hatfield

U.S. Frequency Allocations

11

Bart’s Head

http://www.electronicsweekly.com/blogs/engineering-design-problems/2008/10/post-2.html

12

802.11 Waveform

http://www.home.agilent.com/agilent/editorial.jspx?cc=US&lc=eng&ckey=606355&nid=-34861.0.00&id=606355

13

Interference Mechanisms

Geography

Frequency

(etc.)

Interference happens in the Receiver

14

Geography: Co-channel interference

15

Desired Signal

Interfering or UndesiredSignal

Transmitter A

Transmitter B

Frequency

SignalPower

Receiver B

Frequency: Co-channel spill-over (“Splatter”)

16

Desired Signal

Interfering or UndesiredSignal

Transmitter B

Frequency

SignalPower

Receiver B

Transmitter A

FiltersIdealized Filter Actual Filter

Frequency

SignalPower

Frequency

SignalPower

Resulting energy in Receiver

Frequency

SignalPower

Resulting energy in Receiver

Frequency

SignalPower

Frequency: Adjacent channel/band (1)

Desired Signal

Interfering or UndesiredSignal

Transmitter B

Receiver B

Transmitter A

Frequency

SignalPower

18

Frequency: Adjacent channel/band (2)

19

Desired Signal

Interfering or UndesiredSignal

Transmitter A

Transmitter B

Frequency

SignalPower

Channels & Bands

20

Frequency

Lower AdjacentBand

DesiredBand

Upper AdjacentBand

Band Filter

Channel Filter

Lower AdjacentChannel

Upper AdjacentChannel

DesiredChannel

Radio Regulation

“ The rules, processes and institutions

for defining, assigning, and enforcing

radio operating rights”

21

The Situation

Challenges

– Exploding demand

– Technical & regulatory constraints

Solutions

– Denser packing

– More flexibility

Complications

– Ambiguity in rights definitions

– Regulator in the loop

22

Challenges

Exploding demand for operating rights

– data traffic from smartphone and mobile Internet use is exploding

– a 5 MB download contains as much data as a one hour phone call

– a single YouTube video is the equivalent of 5,000 text messages

– industry analysts predict data traffic rates will increase as many as 22 to 47 times by 2014

But:

– Limits on concurrent operation (technology dependent)

– Uncertain radio propagation and interference environment

– Constraints on throughput (in bits/second/Hz) imposed by Shannon’s Law

– Regulatory and technical rigidities -> administrative scarcity

23

Responses

Solutions

– Denser packing – fewer guard bands

– More flexibility – more inter-service boundaries

– Talk of “sharing”

Complication: regulatory approach hasn’t changed

– New allocations envisaged, but incumbents cling to option value

– More cross-channel, more problematic than co-channel

– Ambiguity in rights definitions

– Regulator always in the loop

Result

– Prolonged disputes - > loss to Treasury (800 MHz); delayed investment (AWS-3)

24

Cross-channel issues are more problematic than co-channel

Scope

– Interference can occur at any location within the geographic service area, not just at the edges

– The number of players or stakeholders involved may be much larger and involve the general public directly

Asymmetry

– The actual or perceived risk or consequences of interference may be asymmetrical

– The architectures and technologies may be vastly different

– Providers in adjacent band are more likely to have very different perspectives, incentives and even cultures – e.g., public safety entities versus commercial entities

Receiver performance

– Especially important and complex role in adjacent channel/adjacent band interference issues

– Not regulated

– Sometimes outside the control of the service provider

As spectrum use intensifies, adjacent channel/adjacent band interference issues are apt to become even more challenging

25

The 800 MHz Case

a.k.a. “Public Safety vs. Nextel”

26

800 MHz Case

Interleaving

– Fine while both high-power/high-tower

– Problems when Nextel cellularized

Both operated within rights

Transaction costs

– large number of public safety operators

Nextel deal – moved to new frequencies

– FCC bore first $2.8 bn of cost, Nextel any over-runs

– Four years to negotiate

27

FCC Spectrum Allocation of 800 MHz Band Prior to Rebanding

28

TV

Broadcast

Ch. 60-69

General

Category

Includes Nextel,

B/ILT & a few

Public Safety

Upper 200 SMR

(Nextel)

806 825816

851 870861 866

809.75

854.75

NPSPAC

821 824

869

- SMR (80 channels) INCLUDES NEXTEL- Business/SMR (50 channels) INCLUDES NEXTEL- Industrial/SMR (50 channels) INCLUDES NEXTEL

- Public Safety (70 channels))*

[7.5 MHz] [12.5 MHz] [10 MHz] [6 MHz]

CELLULAR

Source: APCO/Gurss via Hatfield

The 800 MHz Case

29

Public Safety

Nextel

Frequency

Nextel

Nextel

Nextel

Nextel

An Alternative Approach

Problems

Postulates

Proposals

30

Moral of the Story

Increased density leads to problems

Unclear who’s at fault

Expensive to negotiate resolution

31

Postulates

Radio conflict is unavoidable and necessary

– Aim regulation at maximizing concurrent operation, not minimizing harmful interference

Conflict resolution is primarily a bilateral activity between those involved

Any initial entitlement point is unlikely to be, or remain, optimal

– So: Define, assign and enforce entitlements in a way that facilitates transactions

32

Enable bargaining by effective delegation

Limit the number of parties

– Optimize assignment

– Minimize the number of recipients/borders

– Minimize role of regulator

Create unambiguous rights

– Technical: 3Ps

– Legal: Stipulate the remedy (injunctions or damages) that attaches to an operating right when it is issued

– Institutional: a complete and current public registry of every entitlement

Don’t change the rules during the game

– Leave parameter values unchanged after an entitlement has been defined, (values may be adjusted by negotiation between operators)

– Add new parameters only at license renewal

– Refrain from rulemaking during adjudication (2 roles)

33

Better Rights

Technical

– Probabilistic Permissions and Protections

Legal

– Stipulate remedies ex ante

Institutional

– Public registry

34

The Three Ps

Transmission Permissions: resulting field strength over space and frequency, rather than radiated power at a transmitter.

Reception Protections: maximum electromagnetic energy an operator can expect from other operations

– Undertaking by the regulator to implement these ceilings when determining the respective transmission permissions of other allocations

– Does not form an entitlement against other, existing operators.

Probabilistic: ≤ X at Y% of locations, Z% of time

Does not require a definition of harmful interference

– Delegated to operators and, should negotiation fail, adjudicators

– Hence, it also does not require receiver standards.

35

Probabilistic Permissions and Protections

36

Reception protection for Rae’s license

Frequency

ResultingEnergy

Transmission permission for Tom’s license

Allowed energy ≤ limit at Y% of locations, Z% of time

Liability or Injunction?

37

Tom’s license allows operation up to E = E0

Entitlement assigned to

Tom Transmitter Rae Receiver

Entitlement type

Injunctive(“property”)

Tom has discretion tooperate at E < E0 if hechooses, e.g. afterpayment from Rae

("Cathedral" Rule 3)

Rae can prevent Tom fromoperating at E > E0 unlesse.g. Tom makes a paymentto Rae

("Cathedral" Rule 1)

Damages(“liability”)

Rae may persuade court toreduce Tom’s power to E <E0, but then has to paydamages to Tom

("Cathedral" Rule 4)

Rae cannot prevent Tomfrom operating at E > E0,but is entitled to damages

("Cathedral" Rule 2)

E0E < E0 E > E0

Rules of the Game

Regulator can’t change values

Use license renewal to add parameters

Separate rulemaking and adjudication

38

A Model of Radio Externalities

39

A model

40

W Net social welfare

EMaximum resulting energy as a result of transmission

N Number of receivers

BT(E)Benefit derived from operating transmissions with maximum resulting energy E

BR(N) Benefit derived from operating N receivers

H(E, t, r) Monetary harm per receiver

fT(t)Total spending on precaution by Tom as a function of his out-of-band attenuation t dB

fR(r)Spending per receiver on precaution by Rae as a function of her out-of-band attenuation r dB

Rae’s operating

frequencies

Tom’s operating

frequencies

E

t

Suppression of E achieved by Rae in her receivers through OOB

filtering

Suppression of E in Rae’s receivers achieved by Tom

through transmitter filtering

Resulting energy

r

First Order Conditions

41

Rae’s operating

frequencies

Tom’s operating

frequencies

E

t r

N: number of receiversH: harmfT: Tom’s precaution costfR: Rae’s precaution cost

Liability regime

Strict liability

– Rae is entitled to compensation for all her damages but cannot stop the harmful interference from occurring

– Leads to efficient precaution by Tom

– However, since Rae is fully compensated, she has no incentive to invest in precaution, i.e. out-of-band filtering for her receivers, or limit the number of her receivers

– Hence, Tom will suppress E and t below optimum

Marginal liability

– Tom is only liable for damages if he takes less than the optimum amount of precaution (t)

– But will then push E up, since he’s not liable to Rae, suppressing N below optimum

42

Property (aka injunction) regime

Rae can block Tom from operating

Tom will thus purchase rights to cause harmful interference up to the point where marginal gain from operating, very high at the beginning, eventually decreases to equal the marginal cost of precaution (his and Rae’s) plus harm

Tom will compensate Alice to operate with optimal receiver filters

But, if there are many Rae’s that Tom cannot identify and compensate ex ante, there will be an incentive to deploy too many receivers

43

Some Open Questions

Can functional forms be found?

Given functional forms:

– Can model predict existing rules?

– Can one recommend best remedy regime?

What happens when assumptions fail?

– High transaction costs (e.g. public safety, unlicensed)

– No adjudication venue (e.g. FCC vs. NTIA)

– Player doesn’t have monetary incentive (e.g. DoD)

– Functional forms don’t lead to first order solutions (e.g. non-convex harm curve, non-monotonic precaution cost)

Making trade-offs to reduce number of boundaries

Time adjacency44