Licensed vs. Unlicensed spectrum

The following comment was posted against yesterday's entry:

you mentioned earlier about moving to licensed spectrum. could you elaborate...specifically, what advantages do you expect to gain? thanks.

First of all, thanks for your question. There are pros and cons to using both licensed & unlicensed spectrum. Here's a link to a pretty good overview on the subject (source: HOGAN & HARTSON L.L.P.), but let me give you a couple of definitions, and then try to cover some of the key similarities and differences:

Licensed use of spectrum = Operation of a wireless transmitter over particular frequencies pursuant to an FCC authorization.

Unlicensed use of spectrum = Operation of a wireless transmitter at particular frequencies without an FCC spectrum authorization on a non-harmful interference and unprotected basis.

The key trade-offs in determining whether to use unlicensed spectrum is swift market access and lower equipment costs on the one hand, and low power and lack of interference protection on the other. So, if you're in a market with little competition (e.g. a rural deployment), it is possible to rapidly deploy a cost-effective network using unlicensed spectrum. If you try to do the same in a more competitive market, you're likely to find yourself up against competitors trying to use the same unlicensed spectrum, and the resulting interference can make it difficult to deliver an appropriate service level.

NextPhase started out using unlicensed spectrum, as most WISPs do, but over the last 6-9 months, we've been systematically upgrading our wireless network backbone to licensed spectrum. A useful analogy to understand what we're doing is to think about road networks. As more and more traffic try to use the same roads, everyone suffers delays and end up taking detours. If you're in an area where there road system isn't overloaded, you do just fine, but if you're trying to get from Orange County to LAX early in the morning, you start wishing for your own private toll lane. Licensed spectrum is pretty much that private toll lane for a WISP, allowing network traffic to be transmitted from one geographic point to another, with protection from interference.

What we're doing by upgrading our backbone to licensed spectrum is ensuring that we have the ability to deliver carrier-class service to our customers. Once we've lit our POPs with licensed spectrum, we then have the choice of using either licensed or unlicensed spectrum for the 'last mile' to our customers, allowing us to deliver up to 200Mbps (the equivalent of 130 T1 connections). From that same licensed backbone, we can also light up hotspots, such as the NextZone(tm) that we operate at John Wayne Airport in Santa Ana (one of the 50 busiest airports in the US).