Deregulation of 2.4GHz broadcasting: WLan boost may hit 3G players

The title Statutory Instrument 1590, which contains the Wireless Telegraphy (Exemption) Regulations 1999, is unlikely to mean...

The title Statutory Instrument 1590, which contains the Wireless Telegraphy (Exemption) Regulations 1999, is unlikely to mean much to any one but readers of government press releases, civil servants or radio communications experts, write Laetitia Muir and Andrew Stokes.

Yet this legislation, which came into force on 8 July, could herald a radical shake-up of the mobile communications industry and affect the viability of Europe's 3G operators.

What will it do?
Statutory Instrument 1590 has lifted a ban prohibiting the provision of commercial services in the UK on the 2.4GHz radio waveband. Services will not require a Wireless Telegraphy Act licence, as long as standards on interference are met.

It is part of a move towards loosening the regulations on spectrum licensing and experts predict that some unlicensed use of the 5GHz frequency will follow soon.

Analysts believe that allowing commercial unlicensed use of 2.4GHz and 5GHz would benefit the UK by £500m a year.

The 2.4GHz radio waveband, which has been used for applications such as remote control models, microwave ovens, industrial, scientific and medical equipment, and private wireless local area networks (WLans), will be open for commercial use. Companies will not need a licence or pay a fee to operate on it - all very different from the 3G licence auction.

It is a major boost for the proponents of WLan technology and the 802.11b standard, originally devised as an alternative to wired networks in offices, which operates on this spectrum.

Operators hope the move will allow them to use public spaces such as airport lounges, hotels and bus and railway stations for wireless Internet access.

For a fee, anyone equipped with a notebook or handheld PC and an 802.11b PC card will be able to catch up on e-mails, surf the Internet or send reports through high-speed Internet connections.

Carriers and service providers have already been given approval to offer public-access WLans, and fixed carriers which have sold off their mobile arms may look to WLans as a way back into the mobile market.

How will it affect 3G?
Could the growth of WLans threaten the revenue opportunities that operators expect to gain from 3G?

Essentially, 3G and WLan are competing technologies, in that they are both capable of providing high-speed wireless connections. What favours WLans is that, unlike 3G, they are an attractively priced investment with low barriers to entry - the result of the generous allocation of commercial spectrum.

And, with many pundits believing the Radiocommunications Agency will lift the ban on the 5GHz radio frequency next - a "cleaner" band which will be able to guarantee a specific quality of service - there is no doubt that commercial opportunities exist, well ahead of the roll-out of 3G products.

WLans are easy to set up - users only have to purchase a 802.11b PC card for little more than £100 - and they enjoy the high-bandwidth capabilities of 3G, with data transfer speeds of up to 5.5mbps.

It would be wrong, however, to suggest that WLans offer all of 3G's capabilities. There are potential frequency, interference and overcrowding problems, and the danger of taking a technology originally designed for wireless network closed user groups too far. WLans do not have the same roaming abilities and coverage as 3G, as users are expected to stay put.

There is no doubt that the jury is still out on the relationship between WLan and 3G, some seeing the two technologies as fierce competitors, others as complementary. What may be a cause of resentment, however, is the ease with which commercial WLan opportunities are becoming available.

Although most experts expect to see the benefits of 3G emerge, it seems that WLans' current strength has a lot to do with looser regulation.

As the world's 3G operators have to deal with a total worldwide debt of $650bn (£434bn) according to figures from Merrill Lynch - the result of the licence auctions of the past few years - there is no doubt that there will be questions about the uneven playing field.

The introduction of Statutory Instrument 1590 and the opening up of unlicensed spectrum is unlikely to make 3G advocates feel any better, but for WLan supporters there is no doubt that the green light is on.

Laetitia Muir and Andrew Stokes are solicitors at Tarlo Lyons, a member of euroITcounsel.

Advantages of 2.4GHz over 3G
  • No licence required for 2.4GHz broadcasters

  • Similar relaxation expected for 5GHz

  • Likely to boost use of wireless local area networks in public spaces, for pay-as-you-go Internet access, for example

  • Set-up is easy - just £100 for a 802.11b-standard PC card

  • Data transfer speeds at up to 5.5mbps

  • Ready to use immediately - 3G services slow to roll out.

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