Unwired Australia Pty Ltd - Australian Communications …auction.acma.gov.au/current_projects/bwa/unwired.pdf · 13/07/04 11:07 AM Unwired Public Document Page 1 of 12 Unwired Australia

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Unwired Australia Pty Ltd

Unwired Response to ACA on Proposed Allocation of Spectrum Suitable for BWA and Other Services

21 May 2004

Document Code: Public Document

File Name: ACA_Doc_BWA.doc

Responsibility: Eric Hamilton, Ian Hayne, Hendrik Prins

Version: 1.0

Date: 21 May 2004

Unwired Response to ACA Invitation to Comment


Document History

Revision: Date: Author: Section Modified: Comments:

1.0 15/05/2004 eric.hamilton All Initial Draft

2.0 19/05/2004 eric.hamilton, ian.hayne All Revision

2.1 21/05/04 eric.hamilton All Minor updates



Table of Contents:

Table of Contents: ________________________________________________________3 1 Introduction _______________________________________________________4 2 Background _______________________________________________________5 3. Overall Technical and Commercial Comments __________________________6 5 Regulatory Comments ______________________________________________7 6 Unwired Response to ACA Invitation To Comment_______________________8 6.1 Possible bands and geographic areas for allocation _____________________8

6.1.1 The 2010 – 2025 MHz Band _____________________________ 8 6.1.2 The 1900-1920MHz Band _______________________________ 9 6.1.3 The 1785-1805MHz Band – the “mid-band gap” ______________ 9 6.1.4 The 1880-1900MHz Band ______________________________ 10

6.2 Licensing Options _________________________________________________10 6.3 Minimum amount of spectrum per operator____________________________10 7. Conclusions______________________________________________________12



1. Introduction

This paper has been prepared by Unwired Australia Pty Ltd (Unwired) in response to the Australian Communications Authority’s Invitation to Comment on Proposed Allocation of Spectrum Suitable for BWA and Other Services, dated April 2004.

Unwired has reviewed the ACA Paper and has considered the issues surrounding ACA’s proposals for the potential implementation of BWA and Other Services in bands around 2GHz.

Unwired notes that there are some technical and commercial considerations that need to be taken into account in the allocation of spectrum, however Unwired supports for the most part the proposed allocation on the basis of Spectrum Licensing on a geographic basis, similar to the approach previously undertaken for the 3.5GHz Spectrum allocation and consistent with the outcomes in the 2.3 GHz bands.



2. Background

Unwired Australia Pty Ltd is a wholly owned subsidiary of Unwired Group Ltd [ASX:UNW]. Unwired Australia Pty Ltd, through its subsidiaries AKAL Pty Ltd and BKAL Pty Ltd, has exclusive rights to between 65MHz and 100MHz of spectrum within the 3.4 – 3.5GHz band covering 95% of the population of Australia.

Unwired has publicly announced plans to construct and operate a Broadband Wireless Access (BWA) network in the Sydney region with extensions to other markets as soon as commercially practicable. The Sydney network requires an investment of $85 million to cover expected capital and operational costs.

Unwired is now in the process of constructing its BWA network in Sydney. Unwired is currently installing 73 base stations within the Sydney region. Unwired’s intention is to commence operations in mid 2004 with the completion of the Sydney network in August 2004.

Unwired’s goal is to provide indoor coverage of up to 95% of the population within the Unwired coverage area – making use of leading edge Non Line of Sight (NLOS) technology that allows for connection to modems that are located within customer premises at distances up to 3.5km from Unwired base stations.

Unwired has selected BWA technology from Navini, based in Richardson, Texas.

Unwired’s business model revolves around self-installation of BWA modems. The goal is to allow customers to obtain a modem at a retail outlet, plug it into a computer and start to enjoy high speed internet and telephony services immediately.

The modem is expected to be operated in an indoor environment, located close to the customer’s computer.

Unwired has worked to a specification of 95% coverage of the population within the intended supply area, with base stations operating with a radius of more than 3km wherever terrain allows, assuming indoor installation and that modems do not require special installation.

From a capacity perspective Unwired’s requirement is that it be simple to expand the capacity of the network without major investment and rework. Generally this requires that any supplier of BWA equipment has a simple capacity expansion mechanism that is cost effective and non-disruptive. Capacity extension can be achieved by deploying more spectrum or by installing more radio sites, and both have capital costs. Unwired has chosen a strategy based on wide deployment to minimise the number of radio sites and base station equipment.

For BWA to succeed, network implementation and operation must be relatively inexpensive compared to alternative access technologies. In 2003 Unwired undertook a detailed review of available technologies and had come to the conclusion that Navini best satisfied Unwired’s needs.



3. Overall Technical and Commercial Comments

Unwired has reviewed the ACA Invitation to Comment paper, and has a number of technical and commercial comments.

In all of the cases proposed, ACA is proposing to release up to 20MHz of spectrum for BWA and other uses. While there are no prohibitions to the use of these bands for any types of services, Unwired notes the following:

• As noted in the Invitation to Comment, spectrum use need not be limited to BWA. Other services in the adjacent bands are mainly voice, and if spectrum is allocated then it could be expected that spectrum holders could offer voice services too.

• To operate a reasonably sized network it is generally better to have access to as much bandwidth as reasonably possible. If suitable, reasonably priced, backhaul is available (not using spectrum for this purpose) then to produce a single coverage overlay without significant complexity requires between 15MHz and 20MHz of bandwidth. Even then, depending on coverage and customer density, this could require significant spectrum overlay and/or very small cells.

• Unwired believes that only a small number of BWA equipment suppliers can offer product to meet the need of spectrum holders in the proposed bands. If BWA suppliers modify equipment to match these bands then the cost of modification would probably lie with the spectrum owners, resulting in higher cost equipment.

• The proposed bands are only really suitable for TDD operation (the IMT TDD band specifically so). To operate FDD, spectrum holders may need to obtain access to spectrum nearby, and Unwired notes that spectrum in the near region is predominantly being deployed for FDD operations to support 2.5G and 3G mobile telecommunications, making it unavailable to be matched with any of these bands.

• There are a number of fixed link users in some of the proposed bands. It has been Unwired’s experience that it has taken up to two years to clear its bands, and there is no reason to expect that clearance of the proposed bands would be any faster.

• Proposed TDD usage in the planned bands needs to be considered in the light of potential interference into existing FDD services in adjacent bands. In many cases there may be a requirement for guard bands to be set up to ensure that interference does not occur. This is particularly the case for the 1.8 GHz mid-band gap, where adjacent users have deployed GSM based mobile telephony..



4. Regulatory Comments

Noting the technical and commercial comments above, Unwired generally supports the release of spectrum in the bands proposed by the ACA, subject to some basic equity considerations.

Unwired suggests that any spectrum planned for release to support BWA and other services needs to be released on similar terms and business models as spectrum already released for this purpose.

Unwired believes that the most appropriate form of licensing is Spectrum Licensing. Unwired also believes that these licenses should be allocated by auction, with reserve prices that reflect price bench-marks already established for similar types of bands and underlying service expectations, and on a regional basis with sufficient quantities of spectrum to support commercial services.

Unwired is of the view that there should be no restrictions on the types of services that can be offered by Spectrum License holders, providing the use of spectrum does not contravene core licence conditions and any appropriate Determination by the ACA.



5. Unwired Response to ACA Invitation To Comment

5.1 Possible bands and geographic areas for allocation

5.1.1 The 2010 – 2025 MHz Band

Should the spectrum be allocated to support BWA services in the 2010-2025MHz band?

Unwired is of the view that the spectrum should be allocated to support any service in this band by allocating spectrum licences by auction. To enable this, Unwired believes that the spectrum should be subject to the spectrum re-allocation processes set out in ss.153A-K of the Radiocommunications Act 1992.

Should spectrum be made available over all of Australia, wide areas or just capital cities?

This spectrum should be made available to potential service providers across all of Australia. With a Spectrum Licensing approach, potential service providers will be positioned to purchase the right to access spectrum in any areas that they see fit.

Unwired believes that the spectrum should be offered on a regional market basis. Our direct experience with the market is that there are many small and niche suppliers and potential operators in the market and most have a regional focus. Unwired supports the ACA practice of offering regionally based lots.

Unwired supports using multi-object auction methodologies that allow an operator to aggregate adjacent areas.

Should licenses be auctioned in all rural areas or would over the counter licensing be more appropriate in regional areas?

Unwired is of the view that a single and uniform approach to licensing is appropriate, and this should be market-based as implied by the provisions of the Radiocommunications Act 1992. Given that some geographic areas will be of more commercial interest than others then the proposed approach should be to offer capacity in all areas, in quantities of spectrum that can support BWA or other services. If capacity in some areas fails to be successfully auctioned then the ACA should be able to allow the sale on an over-the-counter basis. In the first place Unwired supports a process of auction to meet any competitive requirements, then secondly by over-the-counter allocation if there are no competitors for the spectrum.

If incumbents need to be cleared, how long should the reallocation period be and should it be the same in all areas?

Unwired believes that the process of spectrum clearance needs to be undertaken on an equitable basis. In this respect, Unwired is of the view that this clearance period should be consistent across all geographic areas. Unwired’s experience is that clearance can take up to 24 months, and this time length should be set as a minimum for all users in which spectrum has been auctioned.

Unwired recommends a 3 year spectrum reallocation period.



5.1.2 The 1900-1920MHz Band

How should licenses to support BWA in regional areas be allocated in the 1900-1920MHz band – under current arrangements on a first come first server basis, or should the band be re-allocated – in whole or part?

Unwired believes that spectrum licensing should be extended to regional areas for this band, with licences offered on a regional basis by public auction. To the extent that the provisions of ss.153A-K need to be applied, Unwired supports a minimum spectrum reallocation period of 2 years, and recommends a 3 years spectrum reallocation period.

Unwired notes that this spectrum was offered in metropolitan areas as 4 discrete lots of 5 MHz. Unwired supports the same approach for any regional allocation.

Unwired is of the view that this capacity should be fully allocated on a Spectrum License basis, that is, ACA should auction spectrum in the band on a regional/area basis. Any areas where the auction process fails to be successful can then be considered for sale on a first come first served basis.

Unwired recommends that reserve pricing be applied on a parity MHz/pop basis derived from past auction experience.

5.1.3 The 1785-1805MHz Band – the “mid-band gap”

Should spectrum be made available to support additional (BWA) services in the 1785-1805MHz band?

Unwired supports the release of this band by means of spectrum licensing. If this is the case then the issue of it being deployed to support specific services should not arise.

If additional spectrum is allocated in this band should guard bands be considered to reduce possible interference to or from GSM 1800 services? If so, how large should such guard bands be?

Given that there are FDD services on either side of this proposed band, and given that the likely modulation technique to be used in this band is TDD, there will be a need for appropriate guard bands. It is Unwired’s experience that guard bands should be of the order of 5MHz and there should be some spatial separation of antennas for each type of service too if services are to share the same tower or rooftop. Given this, it is Unwired’s view that the effective usable bandwidth is 10MHz.

If further spectrum is required which areas and which allocation method are preferred?

The opportunity to obtain spectrum should be offered to interested parties in as many discrete geographical communities of interest as possible. The opportunity is to provide a range of services to customers in many areas – especially portable, itinerant or mobile services. Unwired takes the view that spectrum should be made available throughout Australia. Unwired proposes that the allocation follow the spectrum reallocation process set out in ss.153A-K of the Act, that spectrum licences be offered and that these be offered on a regional basis by public auction.



5.1.4 The 1880-1900MHz Band

Should the ACA consider allocating licenses for BWA services in regional areas in the 1880-1900MHz Band?

If these bands are spectrum licensed or apparatus licensed, the licensees will be asked to operate in an environment where there will be many other users that are not constrained in what they can do. In this sense, the allocation of capacity for DECT based equipment implies that there is no specific method of managing the allocation and use of this band of spectrum. Holders of Licenses would be required to offer services via equipment and networks that have significant noise immunity, but even then the guarantee of quality of service would not be available.

Unwired believes that the existing class licensing arrangements are most appropriate for this band, subject to some minor amendments to the Class licence, perhaps to allow for higher power operation and perhaps then only on a regional basis.

5.2 Licensing Options

Which form of licensing would be most appropriate for the spectrum bands and geographic areas discussed in this paper?

Unwired takes the view that the most appropriate mechanism is to offer spectrum licences, using the same provisions that have been adopted in the 3.5GHz bands.

Licenses should be offered on a band by band basis and region by region basis, where regions would be defined by ACA based on regional communities of interest. This offering should be by a formal auction process using the ACA’s past process of multi-object auction that allows bidders to aggregate licences in the market, Reserve prices should be established for the auction to reflect equity with licence holders from past allocations.

Consistent with past practice, the ACA should make Determinations of unacceptable interference under s.145 of the Radiocommunications Act, and appropriate advisory guidelines covering inter-service coordination with adjacent spectrum users. All of these regulatory instruments should be developed in close consultation with an appropriate technical coordination groups. Unwired stands ready to take an active part in any coordination and consultation activities.

Unwired believes that clearance of the bands for new licensees should be undertaken using the existing and well proven spectrum reallocation process in ss.153A-K of the Act with a minimum spectrum reallocation period of two years and preferably three years.

5.3 Minimum amount of spectrum per operator

Within each band and geographic area that may be considered for allocation, what is the minimum amount of bandwidth likely to be required?

Experience of others (PBA specifically) indicates that it is technically possible to provide service over a reasonably large coverage area using 5MHz of spectrum. Unwired notes that to make use of such little capacity requires a technically complex and potentially expensive solution to minimise self interference within such a small bandwidth.

In regional areas, this typically may not be a problem, with one base station deployed in a town, however, in larger towns and regional cities, capacity requirements might only be met by using a number of transmission



sites, and so spectrum coordination and reuse will become real issues for an operator. A 5 MHz bandwidth might need to be re-used repeatedly to provide coverage raising potential co-channel interference issues.

For regional requirements, where a number of base stations may be needed to cover an area, the use of complex technology to guarantee coverage within a small bandwidth can result in a significant investment and potentially a need to charge for BWA or equivalent services at levels higher than ADSL or similar technologies.

A lower cost implementation may depend on a lower level of frequency re-use within a geographical area – making use of N=2, N=3 or N=4 frequency management techniques. Given that a standard channel size is either 3.5MHz or 5MHz for most radio based services, the implication is that a spectrum allocation of between 10MHz and 20MHz may be necessary for an operator to provide capacity and coverage in any particular area. Given the size of this “prime cut” of spectrum, the implication is that ACA would only be able to allocate capacity to a single Licensee within any of the bands under consideration.

Nevertheless, Unwired believes that the quantity of spectrum required by an operator is largely one for the operator to make and to respond to in the market. There may be some areas where a licensee only requires 5 MHz, and where limiting access to a single 10 MHz licence may price the spectrum out of utility. Unwired favours 5 MHz blocks of spectrum being offered, provided that there is an appropriate price floor established based on parity with past auctions.



6. Conclusions

Unwired, as a Spectrum License holder in the 3.4 to 3.5GHz Band, is well qualified to discuss the issues raised by ACA in its Invitation to Comment paper.

Unwired has a number of technical, commercial and regulatory comments on the planned allocation of spectrum in the proposed bands in the 2GHz region.

Unwired is of the view that the proposed bands will be of limited interest to a small number of players that have access to non-standard solutions that can operate within these bands. While the ACA paper canvases the option of using these bands for BWA activities, it is clear that the bands could be used for other purposes

Unwired believes that there will be interest for capacity allocations from more than one player, and so licences should be offered by auction. Unwired supports the offering of technology neutral spectrum licences. In this way bands can be allocated to successful bidders, along the lines already done in the 3.5GHz bands for any service or technology preferred by the bidder. In this regard Unwired would expect that ACA would plan to undertake the following:

• Offer spectrum on a band by band and region by region basis with 5 MHz blocks where feasible,

• Spectrum be allocated on the basis of a multi-object auction

• Spectrum be reallocated from existing users using the spectrum reallocation process, with a minimum spectrum reallocation period of 2 years. Unwired recommends three years.

• Reserve price for spectrum be set on the basis of past auction experience to ensure equity with existing stakeholders – it is noted that all spectrum is in a part of the wider radiofrequency spectrum that has been allocated by spectrum licence auction and where the predominant users are voice (1.8 GHz, 2.1GHz) and data (1.8 GHz, 2.1 GHz and 3.5 GHz) and therefore on a service parity basis, these previous auctions provide a reliable guide to contemporary market value.

• ACA set appropriate ways of managing interference, particularly to adjacent services and bands using the power to make Determinations of unacceptable interference under s.145 of the Radiocommunications Act.

Unwired would be pleased to discuss this response further with the ACA.

Documents

Unwired Australia Pty Ltd - Australian Communications …auction.acma.gov.au/current_projects/bwa/unwired.pdf · 13/07/04 11:07 AM Unwired Public Document Page 1 of 12 Unwired Australia