Word travels fast in this industry, and in the last few days I’ve already heard from a few local initiatives that have been working to get rural broadband. They’re telling me that the naysayers in their communities are now pushing them to stop working on a broadband solution since Microsoft is going to bring broadband to rural America using white space spectrum. Microsoft is not going to be doing that, but some of the headlines could make you think they are.

Yesterday I talked about some of the issues that must be overcome in order to make white space spectrum viable. It certainly is no slam dunk that the spectrum is going to be viable for unlicensed use under the FCC spectrum plan. And as we’ve seen in the past, it doesn’t take a lot of uncertainty for a spectrum launch to fall flat on its face, something I’ve seen a few times just in recent decades.

With that in mind, let me discuss what Microsoft actually said in both their blog and whitepaper:

• Microsoft will partner with telecom companies to bring broadband by 2022 to 2 million of the 23.4 million rural people that don’t have broadband today. I have to assume that these ‘partners’ are picking up a significant portion of the cost.
• Microsoft hopes their effort will act as a catalyst for this to happen in the rest of the country. Microsoft is not themselves planning to fund or build to the remaining rural locations. They say that it’s going to take some combination of public grants and private money to make the numbers work. I just published a blog last Friday talking about the uncertainty of having a federal broadband grant program. Such funding may or may not ever materialize. I have to wonder where the commercial partners are going to be found who are willing to invest the $8 billion to $12 billion that Microsoft estimates this will cost.
• Microsoft only thinks this is viable if the FCC follows their recommendation to allocate three channels of unlicensed white space spectrum in every rural market. The FCC has been favoring creating just one channel of unlicensed spectrum per market. The cellular companies that just bought this spectrum are screaming loudly to keep this at one channel per market. The skeptic in me says that Microsoft’s white paper and announcement is a clever way for Microsoft to put pressure on the FCC to free up more spectrum. I wonder if Microsoft will do anything if the FCC sticks with one channel per market.
• Microsoft admits that for this idea to work that manufacturers must mass produce the needed components. This is the classic chicken-and-egg dilemma that has killed other deployments of new spectrum. Manufacturers won’t commit to mass producing the needed gear until they know there is a market, and carriers are going to be leery about using the technology until there are standardized mass market products available. This alone could kill this idea just as the FCC’s plans for the LMDS and MMDS spectrum died in the late 1990s.

I think it’s also important to discuss a few important points that this whitepaper doesn’t talk about:

• Microsoft never mentions the broadband data speeds that can be delivered with this technology. The whitepaper does talk about being able to deliver broadband to about 10 miles from a given tower. One channel of white space spectrum can deliver about 30 Mbps up to 19 miles in a point-to-point radio shot. From what I know of the existing trials these radios can deliver speeds of around 40 Mbps at six miles in a point-to-multipoint network, and less speed as the distance increases. Microsoft wants multiple channels in a market, because bonding multiple channels could greatly increase speeds to perhaps 100 Mbps. But even with one channel this is great broadband for a rural home that’s never had broadband. But the laws of physics means these radios will never get faster and those will still be the speeds offered a decade and two from now when those speeds are going to feel like slow DSL does today. It seems like too many broadband technology plans fail to recognize the fact that our demand for broadband has been doubling every three years since 1980. What’s pretty good speeds today can become inadequate in a surprisingly short period of time.
• Microsoft wants to be the company to operate the wireless databases behind this and other spectrum. That gives them a profit motive to spur the wireless spectrums to be used. There is nothing wrong with wanting to make money, but this is not a 100% altruistic offer on their part.

It’s hard to know what to conclude about this. Certainly Microsoft is not bringing broadband to all of rural America. But it sounds like they are willing to work towards making this work. But we can’t ignore the huge hurdles that must be overcome to realize the vision painted by Microsoft in the white paper.

• First, the technology has to work and the interference issues I discussed in yesterday’s blogs need to be solved for anybody to trust using this spectrum on an unlicensed basis. Nobody will use this spectrum if unlicensed users constantly get bumped off by licensed ones. The trials done for this spectrum to date were not done in a busy spectrum environment.
• Second, somebody has to be willing to fund the $8B to $12B Microsoft estimates this will cost. There may or may not be any federal grants ever available for this technology, and there may never be commercial investors willing to spend that much on a new technology in rural America. The fact that Microsoft thinks this needs grant funding tells me that a business plan based upon this technology might not stand on its own.
• Third, the chicken-and-egg issue of getting over the hurdle to have mass-produced gear for the spectrum must be overcome.
• Finally, the FCC needs to adopt Microsoft’s view that there should be 3 unlicensed channels available everywhere – something that the licensed holders are strongly resisting. And from what I see from the current FCC, there is a god chance that they are going to side with the big cellular companies.