The Gavel Comes Down: Auctions are Bad for Wireless Backhaul

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Unless you want to return to payphones, cellular technology requires cooperatively licensed microwave backhaul to function properly. Photo credit: UggBoy / Foter.com / CC BY

Competitive licensing of fixed microwave backhaul bandwidth is a bad idea. And it should not go any further. The reasons why are laid bare in a new article in IEEE Spectrum by former electrical engineer and current telecom law firm partner Mitchell Lazarus. In general, he argues against federal spectrum auctions for microwave frequencies, and in particular for fixed microwave links. Undoubtedly, readers are familiar with the large cash bounties governments around the world have netted from competitive bidding on cellular bandwidth—first 3G and now 4G. An inference can be drawn from Lazarus’ article that some governments (i.e., the United States, the United Kingdom) had in mind a similar, if perhaps smaller, revenue enhancement through competitive auctions of microwave channels.

The problem lies in the fallacious thinking that operating fixed point-to-point wireless backhaul bandwidth is comparable to that of mobile spectrum. Whereas mobile spectrum license holders can expect to mostly—if not fully—use the frequencies for which they have paid top dollar, the same has not historically been true of license holders of microwave backhaul bandwidth. In most cases, mobile license holders have a virtual monopoly for their frequencies on a national, or at least regional, basis. Their base stations send and receive cellular phone signals omnidirectionally. They expect throughput from any and all places. So they have paid a premium to make sure no competitors are on their wavelengths causing interference.

On the other hand, U.S. holders of microwave backhaul licenses have specific destinations in mind for the operation of their point-to-point wireless networks. They only need to communicate between proverbial Points A and B. And, historically, they have only sought licenses to operate in their particular bandwidth on a particular route. They had no need to occupy all of their licensed frequency everywhere. That would be a waste. They just have to make sure they have a clear signal for the transmission paths they plan to use. To do that, before licensing, they would collaborate with other microwave users in the vicinity and a frequency-coordination firm to establish an interference-free path plan. Any conceivable network issues would usually be resolved at this stage prior to seeking a license from the Federal Communications Commission. Essentially, the FCC is just a glorified scorekeeper for fixed microwave services, passively maintaining its transmitter location license database.

But starting in 1998, with dollar signs in their eyes, governmental spectrum auctioneers started to sell off microwave frequencies in block licenses. The need for fixed microwave wireless services then was growing and has only grown fiercer with each additional iPhone and iPad that has been activated. However, access device throughput demand on one side of a base station does not necessarily fully translate all the way to the backhaul. Lazarus points out the example of now defunct FiberTower and its failure to make block microwave licenses work economically. After buying national block microwave backhaul licenses at 24 and 39 GHz, Lazarus notes, the firm resold the frequencies to Sprint and a county 911 emergency network operator. But those were the only customers. Lacking a robust enough utilization of its licensed backhaul frequencies, FiberTower had several hundred of its licenses revoked by the FCC and was forced into bankruptcy November 2012.

Subsequent auctions have attracted far fewer bidders and generated much less income for the Treasury Department. Much bandwidth has lain fallow as a result. And infrastructure buildout has stagnated.

Regulators should return the microwave backhaul licensing process to that of letting wireless transmission engineers cooperate informally among themselves, with the help of frequency-coordination firms, to arrive at fixed point-to-point wireless plans in the public interest. These are then submitted only for maintenance by the FCC or other regulators for traditionally nominal license fees—currently $470 per transmitter site for 10 years in the U.S., per Lazarus.

Forget the quixotic quest for chimerical hard currency. The commonweal demands it. You should demand it of the regulators—you can still give input regarding this scheme in some jurisdictions where it is under consideration. Clearly, the most efficient use of spectrum is to make it openly available to all because it means that every scrap of commercially useful spectrum is picked clean. We welcome your comments pro or con.

Low Latency Microwave Crosses Europe for the First Time

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Successful financial trades depend on ultra low latency microwave networks. Photo credit: francisco.j.gonzalez / Foter.com / CC BY

Germany is well-known for its autobahn highway system, where there are no official speed limits. Now there is a new high-speed network that traverses Western Europe from Frankfurt in Germany to London in the UK.

In addition, you may have read elsewhere in recent weeks about low latency microwave networks being constructed in the United States in support of the financial markets. The busiest route there is between the financial centers in Chicago and New York, where microwave can shave off 5 milliseconds off the transmission time along the 700 mile (1,000 km) route when compared to fastest fiber network (13 milliseconds). This saving directly equates to revenue for trading houses that are able to leverage this speed advantage.

In the United States, planning and deploying a point-to-point (PTP) microwave network is relatively predictable and straightforward: acquire sites and avoid interference from other network operators. Where PTP wireless networks cross state boundaries, a network operator need only deal with the national telecom regulator, the Federal Communications Commission (FCC), when obtaining required licenses to operate the microwave system.

But in Europe, this is a very different matter. While trans-European fiber networks have been a reality for many years, a microwave route like London to Frankfurt must traverse several national borders, forcing operators to deal with multiple regulators, with complex negotiations needed for microwave paths that cross national boundaries. For this reason very few—if any—microwave networks of this type have been built, up until now. However, the opportunities offered by the combination of the new low latency sector, along with the performance advantage of microwave over fiber, have now made the case  for these kinds of networks compelling enough to outweigh the challenges, and costs, of planning and implementing them.

For a low-latency microwave network servicing the financial sector on the London-to-Frankfurt route, there are a number of major challenges beyond just identifying and securing suitable sites and coordinating frequencies. The difficulty of planning a long trunk route is also greatly exacerbated by going through the densely urbanized region of Western Europe. This results in a constant iteration between finding the right route, identifying accessible sites, and securing required microwave frequencies. To be successful you need all three—a site on a great route is useless if no microwave spectrum is available. All the while, there are other competing providers all trying to complete the same route in the fastest time possible—not only in latency terms, but also time to revenue.

This poses huge potential pitfalls in having to take the long way around, requiring additional sites and links, if a site is not available. The added latency caused by any such deviation could kill the entire project. This race is like no other in the microwave business—whoever is fastest wins first prize, and it is winner take all in this competition. The potential revenue for the London-to-Frankfurt low-latency path is quite staggering, even on a regular day, but on busy days when the market is volatile the potential can be much higher.  Operators can plan on recouping their total investment in the microwave network in well under a year. Then once you have the most direct route, compared to your competitors, your problems may not be over, so it can come down to squeezing those extra few microseconds, or even nanoseconds, out of your equipment.

On this particular route there is also one significant natural barrier to contend with—the English Channel. There are only a few ways across that are short enough to allow a reliable microwave path, space diversity protection is a must and only a few towers are tall enough to support these distances. Even though there are no obstacles over the channel (apart from the occasional container ship), towers need to be high enough to allow the microwave signal to shoot over the bulge of the earth. Again, securing tower space at these sites is critical to success, but also obtaining the right to use one or more of a finite pool of available frequency channels, otherwise fiber may be needed across this stage, adding latency. One group even took the step of purchasing a microwave site in the Low Countries to secure it precisely for this purpose.

London to Frankfurt will only be the start for low latency microwave networks in Europe, as there is always a need and an opportunity to provide competitive transmission services to other financial centers throughout the continent. The winners will be those with the speed and agility to quickly seize these opportunities, along with working with the right microwave partner who can help them with the intensely complex business of planning and deploying these trans-national networks, and who can also supply microwave systems with ultra-low latency performance.

We will have more to say publicly on this topic in the near future. Or if you prefer not to wait that long, we would be more than happy to have a private conversation about low-latency microwave with you.

Possibly the World’s Oldest Microwave Link Still in Service

John Lennon was still alive when Aviat's oldest microwave link first went operational in 1980.

John Lennon was still alive when Aviat’s oldest microwave link first went operational in 1980. Photo credit: Roy Kerwood / Foter.com / CC BY

The year was 1980. The Americans beat the Russians for the Olympic gold medal in hockey. John Lennon of The Beatles was killed. Mount St. Helens erupted. The Soviet Union had just invaded Afghanistan. Ronald Reagan was elected president. The hostages were still in Iran. People asked themselves, “Who shot J.R.?” and caught Pac-Man fever. Voyager 1 flew by Saturn and left the solar system. The Empire struck back. John Belushi and Dan Aykroyd were on a “mission from God.” The Clash came calling on London. Led Zeppelin broke up. And Farinon Electric, Aviat Networks’ direct predecessor, put into service a series of analog microwave radio hops for the Canadian province of Nova Scotia’s Department of Natural Resources. The radios in question were the SS2000 model.

The province used them to carry government data traffic for firefighters and police, where data bits were stuffed into 4kHz voice channels. Remarkably, 33 years later, three hops of these SS2000 radios are still in operation, making these, quite possibly, the world’s oldest continuously in-service microwave links.

Farinon SS2000 analog microwave radios were available for sale on eBay as recently as 2011! How’s that for durability?!

Farinon SS2000 analog microwave radio transmitters (but not entire units) were available for sale on eBay as recently as 2011! How’s that for longevity?!

Offering 120, 300 or 600 voice channels on the old 2GHz band, SS2000 radios were considered cutting-edge technology at the time—check out their cool retro-style data sheet—and highly reliable with their ability to provide microwave links despite the challenging weather and difficult propagation conditions of Nova Scotia—snow, ice, sleet, fog…they have it all! As proof, four other SS2000 radio hops were recently decommissioned and found to still be working up to spec as per the original, accepted level of performance. Then there was someone selling SS2000 radios on eBay in 2011!

But we challenge you, our loyal blog readers, to tell us of any even older microwave links that have been in operation for more than 33 years. So if you have an Aviat Networks link, or that from a predecessor company, which is still operating today and was installed before 1980, please comment! We want to hear from you!