1. THE ECONOMIC IMPACT OF LICENCE-EXEMPT SPECTRUM Richard Thanki – ICSS, University of Southampton

2. Introduction MeICSSMicrosoft 2009 and 2012 studies former Ofcom economist and principal advisor to the Independent Spectrum Broker current PhD researcher £12m institute at the University of Southampton focused on complex adaptive systems, such as genetics, climate science and economics Important financial and technical assistance for the completion of the 2009 and 2012 studies The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 2

3. The success of licence-exemption The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 3

4. The success of licence-exemption The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 4

5. The role of licence-exempt spectrum in delivering access to broadband internet Connecting all the people The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 5

6. The shape of smartphone traffic The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 6

7. The shape of smartphone traffic The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 7

8. The shape of smartphone traffic The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 8

9. The shape of smartphone traffic The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 9

10. 140,000 to 450,000 extra sites required immediately  (an additional 8 – 20% sites worldwide)  At a cost of $30 - $90 billion (very conservative) A minimum of 9,000-18,000 in the UK The number would escalate quickly in the coming years Additional costs of mobile, absent Wi-Fi The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 10

11. The global digital divide, and the role of white space spectrum  Broadband remains unaffordable and unavailable for the majority  Many countries have invested in fibre backbones  But all existing models are too expensive without a dense population or large subsidies The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 11

12. The only model that has proven commercially viable in rural areas is that of WISPs  Area coverage limited by high frequency licence-exempt spectrum TV White Spaces could supercharge the WISP model  potentially bring high quality broadband to hundreds of millions of unconnected people for a fraction of the cost of mobile technologies The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 12 The global digital divide, and the role of white space spectrum

13. The role of licence-exempt spectrum in enabling machine-to-machine connectivity and the internet of things Connecting everything else The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 13

14. The human internet The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 14

15. The human internet The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 15

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20. The machine internet The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 20

21. The machine internet The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 21

22. Connected examples The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 22 Connected Vine Sensors to check soil moisture, temperature and light intensity information Actuators to control drip irrigation system Trialed and described by Xiang 2011 Connected Bridge Wireless sensors monitor structural integrity Products in use from Motorola, Innodev, Microstrain etc. Systems described by Xu 2004, Pakzad 2008, Harms 2010 Connected Heart Pacemakers and internal defibrillators constantly monitor heart activity Can upload information and be programmed wirelessly Developed by Elmqvist 1958, Mirowski 1978

23. Economic value possibilities from the IoT The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 23 TodayCisco and Ericsson predictions Our prediction Number of connected devices 4 bn50 bn100 bn Forecast Year20122020 Pairwise connections8 × 10 18 1.25 × 10 21 5 × 10 21 Ratio against today1156625 Even if each new machine connection generates only one-hundredth of the value of one of today’s human connections, the economic value generated by the internet by 2020 would be $1.4 to $2.2 trillion per year – around five times the value generated by the internet today.

24. The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 24 The role of licence-exempt spectrum in the IoT Licence-exempt connections will dominate the internet of things Technical considerations  Latency/network control  Battery life and energy usage  Options – Wi-Fi, Bluetooth, Zigbee etc… Cost considerations  Substantially cheaper chipsets  No ongoing subscription fees

25. The role of white space spectrum in enabling the IoT White spaces can deliver:  broadband speeds  excellent obstacle penetration  low power usage Europe has no broadband-suitable licence-exempt spectrum below 1GHz  Hindering smart grid deployment (in the UK up to 1/5 of home meters are beyond the reach of mobile networks)  Licence-exempt technologies dominate smart grid in US where suitable spectrum is available The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 25

26. How networks built using licence-exempt spectrum help to reduce the fragility of telecommunication networks The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 26 Resilience and adaptability

27. Robust human and natural systems Examples of natural and human resilient and adaptable systems The Importance of Licence-Exempt Spectrum 27

28. Creating diverse architectures The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 28 Without LE With LE

29. The role of white space spectrum In emergencies telecommunications networks often fail  specialised personnel or equipment may not be available  licence-exempt equipment can be repurposed easily. Value of Wi-Fi seen in response to Japanese Tsunami, Hurricane Katrina and the Haiti earthquake, etc.  Often the first networks to go back up  FON made 500,000 Wi-Fi hotspots in Japan open access The range and penetration of white spaces is ideal for this purpose, especially if there is rubble and structural damage  Japan is investigating the use of white space technology specifically for this purpose The Economic Impact of Licence-Exempt Spectrum - Richard Thanki 29