Order Code RS20993
Updated August 12, 2005
CRS Report for Congress
Received through the CRS Web
Wireless Technology and Spectrum Demand:
Advanced Wireless Services
Linda K. Moore
Analyst in Telecommunications and Technology Policy
Resources, Science, and Industry Division
Summary
Advances in wireless telecommunications technology are converging with Internet
technology to foster new generations of applications and services. Presently, the United
States and other countries are moving to third-generation (3G) and fourth-generation
mobile telephony. The defining feature of these technologies is that transmission speeds
are significantly faster than prevailing technology, making it possible to provide services
such as high speed access to the Internet and receive broadcast television programs.
A related trend is the growth in use of Wi-Fi (wireless fidelity) and WiMAX (an
industry designation for a specific broadband standard). Wi-Fi uses local wireless
networks for high-speed mobile access to the Internet. WiMAX has a broader range of
distance. 3G could be described as bringing Internet capabilities to wireless mobile
phones; Wi-Fi as providing wireless Internet access for laptop computers; and WiMAX
as expanding networks with wireless links to fixed locations. The technologies are seen
by some as competing for customers and by others as complementary — providing a
broader base and greater choice of devices for wireless communications and networking.
From the perspective of spectrum management, a significant difference in the
technologies is that 3G and WiMAX services operate on designated, licensed
frequencies, while Wi-Fi shares unlicenced spectrum with other technologies. As the
markets for Wi-Fi and WiMAX develop, wireless carriers have become concerned about
the competitive impact on their businesses when municipalities offer wireless broadband
services. Responding to lobbying efforts by telecommunications companies, several
states have passed laws prohibiting or limiting local governments’ ability to provide
broadband service to residents. In the 109th Congress a bill to restrict municipal
communications services, H.R. 2726 (Representative Sessions), and a bill that would
guarantee the right of local governments to provide advanced communications services
(S. 1294, Senator Lautenberg) have been introduced. The Broadband Investment and
Consumer Choice Act (S. 1504, Senator Ensign) contains a provision that would require
states or localities to submit plans to offer communications services to competitive
bidding. This report will be updated.
Congressional Research Service ˜ The Library of Congress

---

CRS-2
Wireless Technology: Development and Demand
In order to deploy advanced wireless technologies, telecommunications carriers,
network operators, and their suppliers are seeking effective strategies to move to new
standards, upgrade infrastructure, and develop software for new services. This migration
path includes decisions about using spectrum.
Radio frequency (RF) spectrum is used for all wireless communications. It is
managed by the Federal Communications Commission (FCC) for commercial and other
non-federal uses and by the National Telecommunications and Information
Administration (NTIA) for federal government use. International use is facilitated by
numerous bilateral and multilateral agreements covering many aspects of usage, including
mobile telephony.1 Spectrum is segmented into bands of radio frequencies and typically
measured in cycles per second, or hertz.2
Spectrum bandwidth is a finite resource that is infinitely re-usable. Commercial
wireless communications typically rely on bandwidth below 3 GHz because of limitations
in current technology. American competitiveness in advanced wireless technology may
be constrained by the limited amount of exploitable bandwidth that is available. This
constraint is both specific, in the inherent finiteness of useful spectrum, and relative, in
comparison to the amount of spectrum available for commercial use in other countries.
Developments in technology have in the past facilitated the more efficient use of
bandwidth within a given portion of the spectrum. New technologies, such as Software-
Defined Radio (SDR) and “smart” antennae for terrestrial wireless, are being explored and
implemented to increase the efficiency of spectrum and to expand its usable range.
Nonetheless, there is persistent demand for spectrum to carry new services.
Mobile Telephony. Mobile communications became generally available to
businesses and consumers in the 1980s. This “first generation” technology, still in use,
is analog, the prevailing telecommunications technology of the time. Second generation
(2G) wireless devices are characterized by digitized delivery systems that provide
qualitatively better delivery of voice and small amounts of data, such as caller ID. The
next major advance in mobile technology is referred to as the third generation (3G)
because it represents significant advances over the analog and digital services that
characterize current cellular phone technology. A dramatic increase in communications
speed is the most important technical feature of 3G.3 Fourth-generation (4G) networks
in development are expected to deliver wireless connectivity at speeds up to 20 times
faster than 3G.
1 The International Telecommunication Union (ITU), part of the United Nations, is the primary
organization for coordinating global telecommunications and spectrum management.
2 One million hertz = 1 megahertz (MHz); 1 billion hertz = 1 gigahertz (GHz).
3 The FCC identifies key service attributes and capabilities of 3G as the following: capability to
support circuit and packet data at high bit rates; interoperability and roaming; common billing
and user profiles; capability to determine and report geographic position of mobiles; support of
multimedia services; and capabilities such as “bandwidth on demand.” [http://www.fcc.gov/3G].
Viewed June 8, 2005.

---

CRS-3
Wireless communications services have grown significantly worldwide, and
explosively in some countries. Consumer demand for wireless telephony in the United
States has soared in recent years, totaling over 190 million mobile phone subscribers in
August 2005.4 In approximately the same time frame, use of the Internet has expanded
dramatically from an arcane tool for specialized research to a popularized, user-friendly
service providing near instant access to information and entertainment. Wireless Internet
and other broadband applications are widely expected to redefine how computers are used
in the future. 3G technologies bring the wireless Internet revolution to cell phones.
Business and consumer demand for new, advanced wireless services — including 3G and
Local Area Networks (LANs), such as those using Wi-Fi (wireless fidelity) — is
considered by many to be an engine for future growth in American and global economies.
The Internet Corporation for Assigned Names and Numbers (ICANN) has approved the
creation of a “.mobi” domain to join more familiar Internet address extensions such as
“.com” and “.net.” The new extension will be used at first to designate Internet material
that has been specifically formatted for viewing on a mobile device.5
Third-generation and future developments in wireless technology will be able to
support many services for business and consumer markets, such as: enhanced Internet
links, digital television and radio broadcast reception, high-quality streaming video, and
mobile commerce (m-commerce) — including the ability to make payments. Future
generations of technology will be able to carry more data, and carry it farther and faster
than is available in services today. Better technology makes mobile communications
more mobile. As the ability to send high-grade signals further distances improves, so
does the opportunity to tap new markets, with less investment in supporting infrastructure,
such as towers.6

Wi-Fi and WiMAX. Wireless Local Area Networks (W-LANs) operate on
unlicenced spectrum, using radio frequencies in the free 2.4 GHz and 5.4/5.7GHz
spectrum bands. A group of standards for frequency use in these bands is known as the
802.11 family. The 802.11b standard is currently the most widely used and is commonly
referred to as Wi-Fi, for wireless fidelity. Wi-Fi provides high-speed Internet access for
personal computers and Personal Digital Assistants (PDAs) and is also widely used by
businesses to link computer-based communications within a local area. Links are
connected to a high-speed wireline (landline) either at a business location or through
HotSpots. HotSpots are typically located in homes or convenient public locations,
including many airports and café environments such as Starbucks. Another standard for
wireless Internet is Bluetooth, which has a shorter range than Wi-Fi but works well in cell
phones. Bluetooth handles both voice and data; Wi-Fi is mostly data but also supports
Voice over Internet protocol (VoIP) calls, sometimes known as VoWiFi.
4 Statistic updated regularly at [http://www.ctia.org].
5 “Domain aims to improve internet on phones,” by Maija Pesolo, Financial Times (US edition),
July 12, 2005.
6 For an in-depth study of wireless broadband, see Connected on the Go: Broadband Goes
Wireless, Wireless Broadband Access Task Force, Federal Communications Commission,
February 2005 at [http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-257247A1.pdf].
Viewed August 11, 2005.

---

CRS-4
WiMAX (Worldwide Interoperability for Microwave Access) is both a technology
and an industry standard, the work of an industry coalition of network and equipment
suppliers7 that have agreed to develop interoperable broadband wireless based on a
common standard (IEEE 802.16) for point-to-point transmissions. WiMAX technology
can transmit data over distances of up to 30 miles and is being tested in the United States
as a “last mile” technology, that is, a means to provide fixed wireless service to locations
that are not connected to networks by cable or high-speed wires. Mobile WiMAX does
not have a finalized standard and is still in the early stages of development.8 WiMAX
uses multiple frequencies around the world in ranges from 700 MHz to 66 GHz. In the
United States, frequencies where WiMAX is being tested include 700 MHz, 1.9 GHz, 2.3
GHz, 2.5 GHz and 2.7 GHz.
Municipal Deployment of Broadband
The Telecommunications Act of 1996 was intended, among other purposes, to foster
and encourage competition among providers of telecommunications services. In the act,
Congress barred states from “prohibiting the ability of any entity to provide any interstate
or intrastate telecommunications service.”9 Some states have in recent years passed laws
that prohibit or limit local governments from providing telecommunications services. An
effort to challenge such a law in Missouri by municipalities offering local
communications services in the state was heard before the U.S. Supreme Court in 2004.10
The Court ruled that “entity” was not specific enough to include state political divisions;
if Congress wished specifically to protect both public and private entities, they could do
so by amending the language of the law. This decision and the steady improvement in
broadband communications technologies that municipalities wish to have available in
their communities have provided fuel for a policy debate about access to broadband
services. The central debate is whether municipal broadband services are part of essential
infrastructure — like electrical power or water — with many benefits, including stimulus
to the local economy, or whether they provide unfair competition that distorts the
marketplace and discourages commercial companies from investing in broadband
technologies.
The two main broadband technologies that are particularly attractive to communities,
in part because they support existing community services such as Internet access for
schools and communications for public safety, are fiber-optic cable networks and wireless
access — WiFi today, possibly WiMAX in the future. The spread of wireless services
such as access to the Internet and anticipated advances in wireless technology are
modifying the business case for broadband. Networks that depend on a fiber-optic cable
backbone are capital-intensive and usually most profitable in high-density urban areas.
A number of rural communities have used their resources to install fiber-optic broadband
services in part because they were too small a market to interest for-profit companies.
7 Founding members of the WiMAX Forum include Airspan, Alvarion, Analog Devices, Aperto
Networks, Ensemble Communications, Fujitsu, Intel, Nokia, Proxim, and Wi-LAN. For additonal
information, see [http://www.wimaxforum.org/].
8 “WiMAX prepares to come of age,” by Kevin Fitchard, Telephony, June 27, 2005, page 34.
9 47 U.S.C. 253 (a).
10 U.S. Supreme Court, Docket Number 02-1238.

---

CRS-5
The technologies for Wi-Fi and WiMAX today cost less and have a wider geographic
reach than cable, broadening the size of potential markets for broadband. Therefore,
although the arguments pro and con about the municipal provision of broadband apply
generally to all types of broadband services, it is the long-term profit potential of Wi-Fi
and its successor technologies that are apparently spurring commercial wireless service
providers to lobby against municipal competition. In particular, the fact that urban areas
are creating Wi-Fi networks and providing, among other services, free wireless links to
the Internet is viewed as a threat to commercial companies and a form of unfair
competition. Municipalities around the world have installed free Wi-Fi zones, including
New York and Chicago; one is planned for the entire city of Philadelphia.11 The cities
argue that generally available access to the Internet through wireless connections has
become an urban amenity, arguably a necessity in sustaining and developing the local
economy. Municipal Wi-Fi also provides the opportunity to improve social services and
Internet access in disadvantaged communities that often are not served by fiber optic
networks.
The debate about public-sector provision of what some consider to be a private-
sector service is expected to continue. Increasingly, Congress can expect pressure from
advocates from both sides to clarify the language of the Communications Act or to take
some other action that addresses the issue.
Policy Considerations in the 109th Congress
The continued growth in demand for bandwidth for private and public sector use is
one of the factors prompting Congress to review the policies and laws that guide the
allocation and management of spectrum. Areas of debate include the role of auctions in
allocating spectrum,12 the transition to digital television,13 and the availability of spectrum
to support public safety communications and interoperability.14 It is possible that these
issues will conflate and be treated together in a single bill or be included in various other
initiatives for telecommunications reform under consideration by the 109th Congress.
Current bills concerning municipal Wi-Fi deployment include the Preserving Innovation
in Telecom Act (H.R. 2726, Representative Sessions), the Community Broadband Act
of 2005 (S. 1294, Senator Lautenberg) and the Broadband Investment and Consumer
Choice Act (S. 1504, Senator Ensign). The House bill would amend the Communications
Act of 1934 to prohibit states and local governments from providing telecommunications,
information services, or cable in any geographic area in which a similar service is offered
by a private sector company. The Senator Lautenberg’s bill would amend the
Communications Act to specifically permit local governments to provide advanced
telecommunications access. Senator Ensign’s bill is a broad-based bill that addresses the
impact of new technologies, such as broadband, on telecommunications competition. It
11 For more information, see [http://www.phila.gov/wireless/index.html]. Viewed July 20, 2005.
12 See CRS Report RL31764, Spectrum Management: Auctions and CRS Report RS21508,
Spectrum Management and Special Funds.
13 See CRS Report RL32622, Public Safety, Interoperability and the Transition to Digital
Television.
14 See CRS Report RL32594, Public Safety Communications: Policy, Proposals, Legislation and
Progress.

---

CRS-6
includes a section (Section 15) that would require a stringent competitive bidding process
for state and local governments seeking to provide communications services. Public
notice would be required for proposed projects that would include such components as
the cost, services, coverage, and any advantages that would accrue to the government
sponsor, such as free access to rights-of-way or preferential tax treatment. Non-
governmental entities would be able to submit competitive bids that would benefit from
the same advantages allowed government bidders.

---