In the broadband supply chain, local access networks are those that directly connect end users to broadband services, the so-called “last mile.” Several wireline and wireless broadband technologies are used today to support local access networks. Having multiple broadband access options in a country increases consumer choice, stimulates intermodal competition, enhances quality and innovation, and is generally associated with lower retail prices. However, countries may not be able to use all possible technological choices for historical, technical, regulatory, or financial reasons. As governments seek ways to promote broadband development, they will need to recognize the strengths and limitations of their existing level of infrastructure development—both for its upgrade possibilities as well as for developing appropriate incentive and competition policies.

5.7.1 Wireline Access Technologies

This section examines wireline broadband access technologies, including digital subscriber line (DSL), cable modem, fiber to the premises (FTTP), and other options. The first three account for almost all wireline local access technologies worldwide (Figure 5.8).

5.7.1.1 Digital Subscriber Line

The public switched telephone network (PSTN) line running to the subscriber’s premise has traditionally been copper wire, with a bandwidth of 3 to 4 kilohertz (kHz). This narrowband channel offers an analog carrier originally configured to provide a single telephone call. Two “twisted-pair” copper wires are used to support duplex communications (that is, the ability to send and receive at the same time). The PSTN has also supported the capability for narrowband Internet access, with subscribers using a modem to dial up an ISP.

DSL technologies use special conditioning techniques to enable broadband Internet access over that same PSTN copper wire. Transmission speeds vary as a function of the subscriber’s distance from the telephone company switching facilities, the DSL version, the extent of fiber in the network, and other factors. DSL requires that the bandwidth over the copper line be separated between voice and data. A quartz crystal splitter is used to filter the data channel when using the shared copper local loop for telephone service. Similarly the voice channel must be filtered when the line is used for broadband Internet access. Nonetheless, users can continue to make and receive PSTN telephone calls when using DSL data services. As is the case with dial-up access to the Internet, subscribers must have a modem installed between their computer and the copper wire. A DSL modem modulates upstream signals to the Internet and demodulates downstream traffic to the subscriber.

In addition to retrofitting their copper lines, telephone companies also have to upgrade their switching facilities in order split traffic into voice and data streams and to route data traffic between subscribers and the Internet. Traffic exchanged with the Internet is routed through a digital subscriber line access multiplexer (DSLAM). This device aggregates (multiplexes) upstream traffic from DSL subscribers onto high-speed trunk lines to be delivered to the Internet. Similarly, the DSLAM disaggregates (demultiplexes) traffic arriving from the Internet and routes it to the intended subscriber.

DSL has gone through several evolutions supporting increasing speeds and distances (Table 5.2). The technology is standardized within the International Telecommunication Union (ITU) under Study Group 15 and the G series of ITU-T recommendations.* ITU, “Study Group 15 at a Glance,” www.itu.int/net/ITU-T/info/sg15.aspx. An asymmetric digital subscriber line (ADSL) maintains the frequency bandwidth of voice (that is, below 4 kHz) for telephony service. Broadband is transmitted on two other frequency bands; one is allocated to a low-speed upstream channel (25 to 138 kHz), and the other is allocated to a high-speed downstream channel (139 kHz to 1.1 MHz). The theoretical maximum downstream bit rate of 6 Mbit/s and maximum upstream rate of 640 kbit/s are defined by the standard.

In the ADSL2 standard, more efficient modulation and coding are implemented to improve the bit rate, quality, and, to a lesser degree, coverage. The standard defines maximum bit rates of about 8 Mbit/s downstream and 800 kbit/s upstream. The data rate is increased with ADSL2+ through doubling the frequency bandwidth by including the frequency band between 1.1 and 2.2 MHz. This results in a standard of 16 Mbit/s downstream and 800 kbit/s upstream.

Very high-speed digital subscriber line (VDSL) allows for much greater symmetrical data rates accomplished by using improved modulation techniques and adding more frequency bandwidth to the copper wire. However, the distances from the switch to the end user must be short or fiber must be installed to the curb. The VDSL2 standard overcomes some of these challenges by extending distances and reducing interference, while increasing bit rates up to 100 Mbit/s for distances less than 300 meters.

In Israel incumbent operator Bezeq has been rolling out VDSL2 as part of its NGN deployment, with coverage to around half the households by the end of 2010 (Bezeq Group 2011). It was advertising bandwidth of 100 Mbit/s for DSL connections on its website in March 2011. Bezeq plans to offer up to 200 Mbit/s through VDSL bonding, which uses two copper pairs per subscriber.* Nokia Siemens Networks, “Bezeq to Offer World-First 200 Mbit/S Broadband While Cutting OPEX,” www.nokiasiemensnetworks.com/pt/portfolio/customer-successes/success-stories/bezeq-to-offer-world-first-200-Mbit/s-broadband-while-cutting-OPEX.

While DSL technology has evolved with ever-increasing data rates and remains the most popular wireline broadband technology in terms of subscriptions, its biggest constraint is bandwidth deterioration as the distance from the exchange increases, as shown in Figure 5.9.

5.7.1.2 Cable Modem

Cable modems provide subscribers with access to broadband services over cable television (CATV) networks. CableLabs developed standards for cable modem technology in the late 1990s.* CableLabs, “Home Page,” http://cablelabs.com/. The technical guidelines are called Data over Cable Service Interface Specification (DOCSIS). The DOCSIS guidelines have been progressively enhanced in terms of functionality (for example, support for IPv6) and speed (Figure 5.10). The latest version is 3.0, with a slightly different European implementation (EuroDOCSIS). DOCSIS has been approved as an ITU recommendation.* ITU, “J.112: Transmission Systems for Interactive Cable Television Services,” www.itu.int/rec/T-REC-J.112/en.

The first DOCSIS specification was version 1.0, issued in March 1997, which uses the subscriber’s copper wire telephone line for upstream traffic. Beginning in April 1999 with the DOCSIS 1.1 revision, cable operators added quality of service capabilities and began installing fiber optic cables originating at the cable operator’s switching facility (that is, the head end) and terminating at a junction box near the subscriber. This combination of coaxial cable and fiber optic is referred to as a hybrid fiber coaxial (HFC) network. Due to increased demand for symmetric services such as IP telephony, DOCSIS 2.0 was released in December 2001 to enhance upstream transmission speeds. Most recently, the specification was revised to increase transmission speeds significantly (DOCSIS 3 and EuroDOCSIS 3).

Older CATV networks cannot sustain higher bandwidths without significant upgrades. CATV operators that have recently built out their networks generally have a high-capacity bandwidth network from which they can partition a portion for broadband data service. Internet access via CATV networks uses a modem, and broadband access is typically called cable modem service. Television content is separated from Internet traffic at the head end. A cable modem termination system (CMTS) exchanges digital signals with cable modems and converts upstream traffic into digital packets that are routed to the Internet. The CMTS receives traffic from the Internet and routes it to the appropriate cable modem of the subscriber. Because CATV networks use a cascade of amplifiers to deliver video programming, cable modem service has fewer limitations than DSL with regard to how far subscribers can be located from the head end.

Allocating additional frequency has enabled bandwidth increases for cable modem broadband. For example, adding a 6 MHz channel for Internet access provides download speeds typically between 1.5 and 15 Mbit/s and upload speeds of 384 kbit/s to 3 Mbit/s. Channel bonding adds an additional 6 MHz channel to increase speed. However, unlike DSL where subscribers are provided a dedicated connection between their home and the provider’s switch, cable modem broadband capacity is shared among nearby users, which can cause a marked deterioration in service at peak times.

Until recently, the world’s fastest cable broadband network was in Japan, where J:Com offers speeds of 160 Mbit/s based on DOCSIS 3 (Hansell 2009). It achieved this rate through a US$20 per subscriber upgrade, considerably cheaper than building out a new fiber to the home (FTTH) network. In 2011, however, several companies began rolling out EuroDOCSIS services at speeds up to 200 Mbit/s (Nastic 2011).

Although some countries have a significant number of CATV subscribers, cable broadband penetration on a worldwide basis remains relatively low, particularly in developing countries. A main reason is that cable operators have not made the necessary investment in HFC networks. Another factor is that regulatory restrictions in some countries forbid cable operators from providing Internet or voice services. In many countries, however, cable has never achieved significant market penetration, and satellite TV or digital terrestrial TV offers a substitute for multichannel television distribution.

5.7.1.3 Fiber to the Premises

Fiber to the premises refers to a complete fiber path linking the operator’s switching equipment to a subscriber’s home (FTTH) or business (FTTB). This distinguishes FTTP from fiber to the node (FTTN) and fiber to the curb (FTTC), which bring fiber optic cable part of the way to a subscriber’s premises (Figure 5.11). FTTN and FTTC are therefore not subscriber access technologies like FTTP, but are used to extend the capabilities of DSL and cable modem networks by expanding fiber optic cable deeper into the network. Again, the exact technology a company or government chooses to deploy or promote will depend on the unique circumstances in each country. FTTP offers the highest speeds of any commercialized broadband technology. However, it is not widely available around the world, with the FTTH Council reporting that only 26 economies had at least 1 percent of their households connected.* Fiber to the Home Council, “Global FTTH Councils’ Latest Country Ranking Shows Further Momentum on All-Fiber Deployments,” February 10, 2011, www.ftthcouncil.org/en/newsroom/2011/02/10/global-ftth-councils-latest-country-ranking-shows-further-momentum-on-all-fiber-.

FTTP sometimes replaces existing copper wire or coaxial cable connections but is also increasingly popular for greenfield building projects (where a new housing or commercial development is being built and no telecommunications infrastructure presently exists). FTTP can be designed with various topologies: point-to-point, where the optical fiber link is dedicated to traffic from a single subscriber; point-to-multipoint, where fiber optic cables branch to more than one premise and thus share traffic; and a ring, where the fiber optic cable is designed in a closed loop that connects various premises. The information flowing over the fiber optic cable is guided by protocols that have been standardized by the IEEE or the ITU (Table 5.3).

Most FTTP implementations are based on passive optical network using point-to-multipoint topology serving multiple premises with unpowered optical splitters. Traffic is handled using an optical line terminal at the service provider’s central office and optical network terminals, also called optical network units, at the subscriber’s premises.

Although speeds on FTTP networks can be symmetrical and offer up to 1 Gbit/s, many service providers provide substantially lower asymmetrical speeds (often because the national backbone cannot handle high speeds). City Telecom, a broadband operator in Hong Kong SAR, China, for example, has over half a million homes connected to a fiber network. It offers 1 Gbit/s fiber service for about US$25 per month.* Global Telecoms Business, “How to Be a Fat Dumb Pipe at $25 a Month for One Gigabit,” February 2, 2011, www.globaltelecomsbusiness.com/Article/2760589/Interview-NiQ-Lai-and-Ivan-Tam-of-City-Telecom.html.

5.7.1.4 Other Wireline Broadband

Although DSL, cable modem, and FTTP account for nearly all subscriptions worldwide, other technologies include Ethernet-based local area networks (LANs) and broadband over powerline (BPL). Wireline LANs are used to connect many subscribers in a large building such as apartments or offices. Subscribers are typically connected directly to a fiber or Ethernet backbone where broadband access is distributed through the LAN. Some countries report LAN subscriptions as a separate wireline broadband access category. LANs can be wireline (using coaxial cable or twisted pair [Cat3 or 10Base-T]) or wireless, based on the IEEE 802.3 or 802.11 standards. They are typically used within a home or a public access facility.

BPL uses the electricity distribution network to provide high-speed Internet access. BPL operates by differentiating data traffic from the flow of electricity. This separation occurs by using a much higher frequency to carry data through the copper wires, coupled with encoding techniques that subdivide data traffic into many low-power signals or that spread the bitstream over a wide bandwidth. The former encoding scheme is known as Orthogonal Frequency Division Multiplexing (OFDM), and the latter is a type of spread spectrum technology. In both technologies, digital signal processing integrated circuits help to keep data traffic intact, identifiable, and manageable.

BPL has so far failed to achieve wide-scale commercial success, partly because of interference issues and partly because of uncertainty over whether and how data transmission can take place at significant volumes over an entire electricity distribution grid. The problem stems from when transformers are used to reduce the voltage of electricity to that used by residential and business users. Because a BPL distribution grid requires repeaters that amplify data signals, such networks can be costly to build. In addition, BPL reportedly can interfere with some radio transmissions, and there is no international standard for BPL. Finally, a big barrier in many low-income nations is the lack of a reliable electrical grid to carry the data signals.

A building’s internal electrical wiring can also be used as a type of LAN. Devices with Ethernet ports can be interconnected using plug-in adapters over electrical wiring to create home and office networks. The HomePlug Powerline Alliance has created an adapter standard and reports that it had sold over 45 million such devices by March 2010, accounting for 75 percent of the market.* HomePlug Powerline Alliance, “HomePlug® Powerline Alliance Announces Milestones on 10th Anniversary as Powerline Technology Leader,” March 22, 2010, www.homeplug.org/news/pr/view?item_key=a633eafa198466341aa340327092bc76f8169135. The ITU covers the use of electrical wiring for home networking in its G.hn Recommendation.* ITU, “New ITU Standard Opens Doors for Unified ‘Smart Home’ Network,” Press Release, November 15, 2009, www.itu.int/newsroom/press_releases/2009/46.html.

5.7.2 Wireless Access Technologies

The immense success of cellular telephone service attests to the attractiveness of wireless technologies as a local access solution. Factors in their success include being generally easier and cheaper to deploy than wireline solutions and consumers’ fondness for mobility. Technological innovations offer the near-term opportunity for widespread mobile access to the Internet, as next-generation wireless networks have the technological capability to offer bit rates at near parity with current wired options, though not yet at the same price points. The ability of carriers to offer such services will depend on whether sufficient radio spectrum can be allocated for mobile broadband services and whether innovations in spectrum conservation techniques can help operators to meet consumer demand.

5.7.2.1 Early Wireless Broadband Standards

EDGE

Although an International Mobile Telecommunications-2000 (IMT-2000) standard, EDGE initially offered less than broadband speeds (120 kbit/s, according to the GSMA).* According to the GSMA, “GPRS offers throughput rates of up to 40 kbit/s…Using EDGE, operators can handle three times more subscribers than GPRS, triple their data rate per subscriber.” See “GPRS” and “EDGE” on the GSMA website, gsmworld.com/technology/index.htm. A newer version of EDGE (Evolution) can achieve top speeds of up to 1 Mbit/s, with average throughput of around 400 kbit/s (Ericsson 2007), but EDGE is not considered a true mobile broadband solution. It can be attractive since it provides an upgrade path for global system for mobile (GSM) communications networks, allowing higher speeds than GPRS,* In theory the speed limit of GPRS is 115 kbit/s, but in most networks it is around 35 kbit/s. particularly where investment is constrained, regulators have not released mobile broadband spectrum, or gaps in coverage need to be filled.

CDMA2000 1x

CDMA2000 refers to the CDMA2000 1x and CDMA2000 Evolution Data Optimized (EV-DO) technologies that are part of the IMT-2000 standards. CDMA2000 builds on second-generation (2G) CDMA technologies, known as ANSI-95 or cdmaOne, and uses a 1.25 MHz channel size. CDMA2000 attractions include backward compatibility with earlier standards, use for either wireline or mobile wireless, and spectrum flexibility due to small channel size and availability in a range of frequencies including 450 MHz, the only IMT-2000 standard commercially available in that band (Figure 5.12; CDMA Development Group 2000).

CDMA2000 1X supports circuit-switched voice up to and beyond 35 simultaneous calls per sector and high-speed data of up to 153 kbit/s in both directions. Although it was the first IMT-2000 technology to be commercially adopted, it is not considered mobile broadband due to the low speed. However, CDMA2000 1xEV-DO uses packet-switched transmission specifically designed and optimized for mobile broadband networks. There have been three revisions to the EV-DO standard (Rel. 0, Rev. A, and Rev. b), each offering higher speeds than its predecessor (Table 5.4). In September 2010 there were 66 countries with Rel. 0 networks, 57 countries with Rev. A networks, and three countries with Rev. B networks, together serving 156 million subscribers around the world.* CDMA Development Group, “CDMA Statistics,” www.cdg.org/resources/cdma_stats.asp. One of the fastest EV-DO networks is in Indonesia, where operator Smart Telecom is using Rev. B to achieve an average download speed of 8.6 Mbit/s and a peak download speed of 9.3 Mbit/s.* ZTE, “ZTE Launches the World’s First Commercial EV-DO Rev.B Network in Indonesia,” Press Release, January 18, 2010, wwwen.zte.com.cn/en/press_center/news/201001/t20100118_179633.html. Box 5.2 describes the experience of Mexico and Sweden with CDMA 450 MHz.

5.7.2.2 IMT-2000

The first two generations of mobile networks were characterized by analog and then digital technology. There were no global standards, and a variety of technologies evolved. In an effort to standardize third-generation (3G) mobile systems expected to be commercialized around the year 2000, the ITU developed the International Mobile Telecommunications (IMT) family of standards. Despite the goal of standardization, five significantly different radio interfaces for IMT-2000 were approved in ITU-R Recommendation M.1457 in 1999. WiMAX was added to M.1457 in 2007 (Table 5.5).* There have been 10 revisions of Recommendation ITU-R M.1457. The latest is M.1457-9 of May 2010. See ITU (2010).

W-CDMA/UMTS

Wideband CDMA (W-CDMA), also referred to as UMTS, is characterized by the use of Frequency Division Duplexing (FDD). It uses paired spectrum in 5 MHz wide radio channels. W-CDMA is often marketed as an upgrade from GSM, although it requires new base stations and initially new frequency allocation. However, since W-CDMA handsets are generally dual-mode to support GSM, roaming between the two networks is typically seamless. Given its ties to the dominant GSM standard, W-CDMA has been the most successful of the IMT-2000 technologies in terms of subscriptions.

High-Speed Packet Access refers to the various software upgrades to achieve higher speeds on W-CDMA networks (Table 5.6).* GSMA, “About Mobile Broadband,” www.gsmamobilebroadband.com/about/. Initial speed improvements are listed below, although some operators have been able to achieve even higher data rates through various enhancements:

• High-Speed Downlink Packet Access (HSDPA) increases download data rates. Speeds achieved top 14.4 Mbit/s, with most operators offering speeds up to 3.6 Mbit/s. Upload speeds are 384 kbit/s.
• High-Speed Uplink Packet Access (HSUPA) increases upload rates. Upload speeds are increased to a maximum of 5.7 Mbit/s.
• HSPA+ (also known as HSPA Evolved) offers significant speed improvements. HSPA+ enables speeds up to 42 Mbit/s in the downlink and 11 Mbit/s in the uplink. In March 2011 there were 128 HSPA+ networks in 65 countries, including 95 HSPA+ networks offering peak rates of 21 Mbit/s, 11 offering peak rates of 28 Mbit/s, and 22 offering peak rates of 42 Mbit/s.* 4G Americas, “HSPA+ and LTE: Fastest Speeds for Mobile Broadband Today,” March 18, 2011, www.3gamericas.org/index.cfm?fuseaction=pressreleasedisplay&pressreleaseid=3084.

TD-SCDMA

Some of the key characteristics of Time Division–Synchronous Code Division Multiple Access (TD-SCDMA) are that it uses Time Division Duplexing (TDD), unlike W-CDMA, which uses FDD, and does not require paired spectrum, increasing spectrum flexibility. The word “synchronous” refers to the fact that the base station synchronizes upstream signals. Interference is reduced and capacity is increased; however, there is reduced coverage compared to other technologies. China is the only country where TD-SCDMA has been deployed on a significant scale (Box 5.3). Launched by China Mobile on January 7, 2009, the network covered 656 cities by the end of 2010, with 20,702,000 subscribers (China Mobile 2011).

WiMAX

WiMAX consists of several products based on IEEE 802.16 standards for wireless broadband. Originally designed as a wireline backbone technology, the mobile version of WiMAX (802.16e) is a more recent incarnation that was approved by the ITU as an IMT-2000 standard in 2007.* ITU, “ITU Defines the Future of Mobile Communications,” Press Release, October 19, 2007, www.itu.int/newsroom/press_releases/2007/30.html. Distinguishing features of WiMAX include IP packet switching, the use of Scalable Orthogonal Frequency Division Multiple Access (SOFDMA), unpaired spectrum using TDD, and operation in the 2.3, 2.5/2.6, and 3.5 GHz bands. Top theoretical speeds for wireless WiMAX are 46 Mbit/s on the uplink and 7 Mbit/s on the downlink, roughly equivalent to HSPA+ networks (Pinola and Pentikousis 2008).

Although mobile WiMAX is standardized as an IMT-2000 technology by the ITU, it is often used as a fixed wireless access technology (IEEE 802.16; Marks 2010). One of the early implementations was the Korean variation called WiBro (WiMax Forum 2008). The government issued spectrum in the 2.3/2.4 GHz band in 2005, and WiBro was commercially launched in April 2007. By the end of 2010, WiMAX networks were used in 149 countries covering more than 823 million people.* WiMAX Forum, “WiMAX™ on Track to Cover One Billion by EOY 2011,” February 15, 2011, www.wimaxforum.org/news/2761. The number of WiMAX subscribers around the world was estimated at 13 million in December 2010 (Maravedis 2011).

5.7.2.3 IMT-Advanced

The ITU has been working on standards for the next generation of wireless systems for several years. In March 2008 it issued a circular letter specifying the provisions for International Mobile Telecommunications-Advanced (IMT-Advanced) networks, which are generally defined as systems “that go beyond those of IMT-2000” (Blust 2008). One of the most significant requirements is peak data rates of 100 Mbit/s for high mobility and 1 Gbit/s for low mobility. In October 2010 the ITU announced that two technologies met the requirements for IMT-Advanced: LTE-Advanced and WirelessMAN-Advanced (ITU 2010).

LTE and LTE Advanced

Development of the LTE mobile network standard started in 2004. One goal was to achieve higher data speeds to support the rising growth of Internet access over mobile phones. Targeted speeds were initially 100 Mbit/s for downloads and 50 Mbit/s for uploads. LTE uses OFDM for downloads and Single Carrier-Frequency Division Multiple Access (SC-FDMA) for uploads. LTE is designed for frequency flexibility, with bandwidth requirements ranging from 1.25 and 20 MHz and support for both paired (FDD) and unpaired (TDD) bands.

LTE standards have been developed under the auspices of the 3G Partnership Project (3GPP). The 3GPP Release 8, issued in December 2008, forms the basis for initial LTE deployments. It has theoretical maximum download speeds of 300 Mbit/s and upload speeds of 75 Mbit/s. In order to meet global requirements for fourth-generation (4G) mobile networks, 3GPP developed LTE Release 10 and Beyond (LTE‐Advanced), which was submitted to the ITU in October 2009.

Although LTE was developed within the auspices of the 3GPP, whose work includes technical specifications for GSM, W-CDMA, and HSPA technologies, there is no straightforward migration path. So far, LTE deployments have required the purchase of new equipment by operators and new devices by users.

The world’s first LTE deployment was by TeliaSonera when it simultaneously launched networks in Stockholm, Sweden, and Oslo, Norway, at the end of 2009 using the 2.6 GHz frequency band.* TeliaSonera, “TeliaSonera First in the World with 4G Services,” Press Release, December 14, 2009, www.teliasonera.com/News-and-Archive/Press-releases/2009/TeliaSonera-first-in-the-world-with-4G-services/. Verizon’s LTE network launch in the United States in December 2010 is noteworthy for using the 700 MHz frequency band.* Verizon, “Blazingly Fast: Verizon Wireless Launches the World’s Largest 4G LTE Wireless Network,” December 4, 2009, news.vzw.com/news/2010/12/pr2010-12-03.html. Verizon reported that speeds were 5–12 Mbit/s download and 2–5 Mbit/s upload. According to 4G Americas, 19 commercial LTE networks were operating worldwide in 14 countries in March 2011.

WirelessMAN-Advanced

WirelessMAN-Advanced is standardized as IEEE 802.16m and offers backward compatibility with IEEE 802.16e, an IMT-2000 technology. It meets the IMT-Advanced data rate requirements with a theoretical 180 Mbit/s downlink using a 20 MHz TDD channel (WiMax Forum 2010). Multiple channels can be aggregated to support 1 Gbit/s speeds (Jiaxing and Guanghui 2010).

5.7.2.4 Wi-Fi

Wi-Fi refers to the IEEE 802.11 family of standards specifying wireless local area networking over 2.4 and 5 GHz frequency bands. Wi-Fi is not typically deployed as a commercial local access network; it is used most often to redistribute a broadband connection to a wider group of users in homes, offices, and “hotspots.” Wi-Fi technology has gone through several updates that provide varying speeds depending on the frequency and version used (Table 5.7).

Reportedly one in 10 people around the world uses Wi-Fi.* Wi-Fi Alliance, “Organization,” www.wi-fi.org/organization.php. Its success is attributed to several factors, including embedding Wi-Fi chips in portable computers and smartphones, the fact that it operates on a license-exempt (unlicensed) basis,* The ITU has designated the 2,450 MHz and 5,800 MHz bands for industrial, scientific, and medical applications that “must accept harmful interferences.” This is often interpreted to mean that they are considered unregulated. See ITU-R, “Frequently Asked Questions,” www.itu.int/ITU-R/terrestrial/faq/index.html#g013. and the relative ease of installation compared to wired networks, with the majority of the upgrade costs lying with the consumer rather than the operator.

In addition to sharing broadband connectivity with devices in home and office networks, Wi-Fi is being used for the following significant applications:

• Subscription-based access to broadband. Many wireline ISPs around the world offer Internet access through Wi-Fi hotspots at airports, coffee shops, and other locations. This is seen as a complement to their traditional service.
• Municipal Wi-Fi networks. Large-scale Wi-Fi networks have been deployed in some urban areas around the world to provide free Internet access. Wireless@KL in Kuala Lumpur, Malaysia, provides free 512 kbit/s access throughout the city; faster speeds are enabled through payment.* Wireless@KL, “About,” www.wirelesskl.com/?q=about. The Kuala Lumpur City Hall and the Malaysian Communications and Multimedia Commission sponsor the KL Wireless Metropolitan project in collaboration with Packet One Networks, an ISP. Some 1,500 hotspots have been deployed in the city.
• Relief for congested mobile networks. Mobile operators were initially lukewarm about handsets with Wi-Fi capability, since users could bypass more expensive cellular network data offerings. That view is changing due to the rapid growth in demand for data over mobile cellular networks and consequent capacity constraints. Today, many mobile operators embrace Wi-Fi as a way to offload 3G-network traffic as a complement to their regular commercial service. For example, AT&T in the United States is automatically switching smartphone users to Wi-Fi when they are within range of a hot spot (Fitchard 2010).

5.7.2.5 Satellite

Aside from its role in the international and backbone segments of the broadband supply chain, satellites are also used to provide direct subscriber access to broadband services, particularly in remote areas where wireline broadband is not available and there is no terrestrial high-speed wireless coverage.* In the United States, users in remote areas without wireline broadband availability were offered a discount for satellite broadband Internet access (including no installation or equipment charges) through the American Recovery and Reinvestment Act. See HughesNet, “Frequently Asked Questions,” consumer.hughesnet.com/faqs.cfm. The subscriber uses a satellite antenna or dish that is connected to a satellite modem. Speeds vary depending on the satellite technology, antenna, and the weather. Latency can be an issue for some applications (for example, gaming). Although they serve specific niches, satellites do not offer the same price to quantity ratio as other broadband solutions. For example, in March 2011 the highest speed available from a leading retail broadband satellite provider in the United States was 5 Mbit/s for US$300 per month.* HughesNet, “Business Solutions,” http://business.hughesnet.com/explore-our-services/business-internet/business-internet-high-speed.

5.7.2.6 Local Loop Unbundling

In many countries, an incumbent, former monopoly wireline provider often controls the only extensive local access network. In such cases, regulators have sought ways to introduce more competition and innovation into the local access market. Local loop unbundling (LLU) has been one of the main methods implemented in developed nations for service providers to gain access to the incumbent’s switched telephone network in order to provide DSL service. There are three main types of implementation:

• Full unbundling. The entire copper local loop is leased to a service provider. The service provider installs its own broadband equipment either in, or close to, the incumbent’s site.
• Line sharing. The copper local loop is shared between the incumbent and the other service provider. The incumbent provides voice telephony over the lower-frequency portion of the line, while the other provider offers DSL services over the high-frequency portion of the same line.
• Bit stream access. DSL service is essentially sold at wholesale prices to the service provider, who in turn resells it to customers. The incumbent operates all of the key infrastructure components in the loop.

5.7.2.7 Quality of Service

There is often a significant difference between advertised speeds and actual speeds achieved by users (Figure 5.13). The problem is that the advertised speeds are usually based on the theoretical capability of the technology or standard. In reality, however, numerous factors make such speeds very difficult or even impossible to achieve, including network congestion or (for wireless networks) radio interference.

In an effort to manage network quality, many providers are moving away from unlimited broadband packages and adopting so-called “fair use policies” in order to control and regulate traffic. One practice is to use data caps where providers establish a threshold on the amount of data that can be downloaded per month. Once the cap is exceeded, either the subscriber has to purchase additional download volume or the subscriber’s speed is reduced or, in the worst-case scenario, service is terminated for that month. Some operators establish different caps for domestic and international traffic. Another practice is to control the use of high-bandwidth applications or access to traffic-intensive sites by restricting or degrading service. This practice has been banned in some countries as a violation of network neutrality. Providers have been known to “throttle” service by limiting the subscriber’s bandwidth when they have exceeded data caps or tried to access traffic-intensive sites.

These network management practices have been contentious since they are often covered by the “small print” of customer contracts and many users are not aware of them. In an effort to alleviate consumer concerns about service quality, some governments monitor and compile reports on service quality. The Telecommunications Regulatory Authority (TRA) in Bahrain, for example, publishes data on wireline broadband performance (Bahrain, Telecommunications Regulatory Authority 2011). The TRA measures upload and download speeds for different broadband packages, domain name system (DNS) response (time taken in milliseconds to translate a domain name to its IP address), and ping (an echo request sent to a server to test latency). In other countries, although governments do not publish quality of service reports, they offer sites where consumers can check their speed.* United States, FCC, “About the Consumer Broadband Test (Beta),” www.broadband.gov/qualitytest/about/.

5.7.2.8 Spectrum

One of the biggest constraints on wireless broadband deployment and usage is the availability of spectrum. Some countries have yet to allocate mobile broadband spectrum, have not allocated certain frequencies, or have not allocated sufficient spectrum.

Although the number of frequency bands in which mobile broadband operates has increased, not every technology operates in every band. Therefore, by not licensing certain bands, countries prevent the availability of some mobile broadband technologies. Another issue is that even slight differences in frequency assignments can make a difference in equipment compatibility, affecting prices and roaming. Growing mobile broadband demands are placing increasing pressure on spectrum availability. Providers use several techniques to increase capacity, including splitting cells, upgrading to more efficient technology, and offloading some uses onto other networks like Wi-Fi. However, there may come a point where technology cannot fix the capacity shortage and additional spectrum is required. Some countries have already begun examining how to use the various bands identified for broadband, including the so-called “digital dividend” spectrum that can be made available as the result of the transition from analog to digital television. One promising solution could be cognitive radio, where devices reconfigure themselves according to whatever spectrum is available, while avoiding interference. The first call in the world using cognitive radio was made in Finland in 2010 (Centre for Wireless Communications 2010).

In looking at spectrum, regulators need to determine the best procedure to follow in awarding spectrum, whether to impose limits on the amount of spectrum a single operator can hold, and whether to allow operators to engage in secondary trading. These issues are discussed in more detail in chapter 3.