Spectrum Powering the Internet of Things

by Hogan Lovells
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Leaders from the public and private sectors recently analyzed the relationship between federal spectrum policy and the Internet of Things (IoT) at the Fifth Annual Winnik International Telecoms and Internet Forum.  In a discussion co-moderated by Hogan Lovells Partners Trey Hanbury and Mark Parsons, panelists explored the demands IoT will impose on networks and proposed regulatory strategies that could encourage innovation and investment in IoT.

More spectrum is not enough, cautioned Renee Gregory, Senior Policy Advisor at the White House Office of Science and Technology Policy.  According to Gregory, IoT will require carriers and edge providers to use more efficiently spectrum that is already available.  Virginia Lam Abrams, Senior Vice President, Communications & Government Relations at Starry, Inc., agreed.  She said the “spectrum crunch” presents an opportunity for startups to develop new technology to offer service over high-frequency “junk bands” previously considered unusable.  (Starry’s technology, for example, uses the 37 GHz band to deliver gigabit internet to the home.)

Regulatory design can encourage efficient use and sharing of spectrum.  But getting the rules right will be challenging given the infancy of IoT and the unpredictability of future IoT use cases, panelists noted.  IoT may involve more high-resolution video, embedded sensors, low-latency applications, or ubiquitous screens, Steve Sharkey, Vice President of Government Affairs, Engineering and Technology Policy, at T-Mobile, said.  With so many diverse applications of IoT, forecasting applications that may develop over time poses a challenge for network operators such as T-Mobile, he said.

Given the uncertainty about the shape IoT will take, several panelists expressed support for adopting a variety of spectrum use and sharing regimes—licensed, unlicensed, and hybrid frameworks—across different bands.  David Grossman, Senior Advisor to Commissioner Mignon Clyburn, said the traditional dichotomy between licensed and unlicensed use is no longer warranted.  Grossman said he supports an “all of the above” approach that draws lessons from different spectrum assignment models to make more capacity available to service providers, device manufacturers, and end users.  Gregory agreed.  She said the recently adopted hybrid sharing regime governing the 3.5 GHz band may offer a new hybrid licensing model that is neither entirely licensed nor unlicensed.

Sharkey said regulators should exercise caution with hybrid spectrum-assignment models.  Hybrid regimes remain in the experimental stages, and one cannot assume they will work as intended, much less support all sharing scenarios and use cases, he said.  Allocating additional licensed spectrum will enable competitive entry by non-incumbent providers, he added.

The panelists differed on the extent to which a dedicated spectrum allocation for IoT could encourage device-centric application and services.  Derek Khlopin, Senior Advisor at NTIA, said he did not view an IoT-specific band as necessary and noted widespread opposition to new spectrum allocations based on the reduced flexibility to repurpose spectrum.  Fully flexible spectrum rights might offer the best opportunity to address an ever-changing market.

Drawing on his expertise in the Asian telecommunications sector, Hogan Lovells Partner Mark Parsons offered a comparative perspective on China and Korea’s approach to spectrum policy.  China, he explained, has adopted a state-managed process akin to a national rail system, with no competitive spectrum auction process.  By contrast, Korea allows unallocated bands to serve as “regulatory sandboxes” where providers can freely deploy innovative 5G services.  Hong Kong falls somewhere in between.  While Hong Kong has not adopted China’s command-and-control approach, Hong Kong has issued certain mandates, such as requiring providers to continue to support 2G services to serve visitors that may rely on 2G devices, which some critics contend distorts the market for services there.

As companies rush to connect, map, and control previously unconnected devices, service providers – and regulators—continue to search for smarter ways to assign limited spectrum resources to IoT products and services.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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