1、*W ir eless C ommunicationsbyJ oshua S . Ga ns, S tephen P. K ing a nd J u l i a n W ri g ht1. . In tr od u ctionIn 1895 , Gug l ie lmo M arconi opened the w ay for m odern w i reless communications by transmitting the three-dot M orse code for the letter S ov er a distance of three k i lometers usi
2、ng electromag netic w aves. From this beg inning , w i reless communications has developed into a key element of modern society . From satellite transmission, radio and television broadcasting to the now ubiquitous mobile telephone, w i reless com munications has revolutionized the w ay societies fu
3、nction.This chapter survey s the economics l i terature on w i reless communications. W i reless comm unications and the economic g oods and services that utilise i t have some special characteristics that have motivated specialised studies. First, w i reless communications relies on a scarce resour
4、ce namely , radio spectrum the property rig hts for w hich w ere traditionally vested w i th the state. In order to foster the development of w i reless comm unications ( including te lephony and broadcasting ) those assets w ere privatised. S econd, use of spectrum for w i reless comm unications re
5、quired the development of key complementary technolog ies; especially those that a l low ed hig her frequencies to be utilised more efficiently . Finally , because of i ts special nature, the efficient use of spectrum required the coordinated development of standards. Those standards in turn play ed
6、 a critical role in the diffusion of technolog ies that relied on spectrum use.In larg e part our chapter focuses on w i reless telephony ra ther than broadcasting and other uses of spectrum ( e.g ., te lem etry and biomedical services). S pecifically , the economics l i terature on that industry ha
7、s focused on factors driving the diffusion ofw i reless te lecom munication technolog ies and on the nature of netw ork pricing reg ulation and competition in the industry . B y focusing on the economic l i terature, this chapter complements other survey s in this Handbook. Hausman ( 2002 ) focuses
8、on technolog ical and policy developments in mobile telephony rather than economic research per se. C ramton ( 2002 ) provides a survey of the theory and practice of spectrum auctions used for privatisation. A rmstrong ( 2002 a ) and Noam ( 2002 ) consider g eneral issues reg arding netw ork interco
9、nnection and access pricing w hile W oroch ( 2002 ) investig a tes the potential for w i reless technolog ies as a substitute for local fix ed l ine telephony . Finally , L iebow i tz and M arg olis ( 2002 ) provide a g eneral survey of the economics l i terature on netw ork effects. In contrast, w
10、e focus here solely on the economic l i terature on the mobile telephony industry .The outline for this chapter i s as follow s. The next section provides backg round information reg a rding the adoption of w i reless comm unication technolog ies. S ection 3 then considers the economic i ssues assoc
11、iated w i th mobile telephony including spectrum a l location and standards. S ection 4 survey s recent economic studies of the diffusion of mobile telephony . Finally , section 5 review s i ssues of reg ulation and competition; in particular, the need for and principles behind access pricing for mo
12、bile phone netw orks.2. . B a ck g r ou n dM arconi s pioneering w ork quickly led to variety of commercial and g overnment ( particularly military ) developments and innovations. In the early 1900 s, voice and then music w as transmitted and modern radio w as born. B y 1920 , commercial radio had b
13、een established w i th Detroit station W W J and KDKA in Pittsburg h. W i reless teleg raphy w asfirst used by the B ritish military in S outh A frica in 1900 during the A ng lo-B oer w ar. The B ri ti sh navy used equipment supplied by M arconi to com m unicate betw een ships in Delag oa B ay . S h
14、ipping w as a major early client for w i reless te leg raphy and w i reless w as standard for shipping1by the time the Titanic i ssued i ts radio distress calls in 1912 .Early on, i t w as quickly recog nized that international coordination w as required for w i reless comm unication to be effective
15、. This coordination involved tw o features. First, the potential for interference in radio transm i ssions meant that a t least local coordination w as needed to avoid the transmission of conflicting sig nals. S econdly , w i th spectrum to be used for international comm unications and areas such as
16、 maritim e safety and navig a tion, coordination w as necessary betw een countries to g uarantee consistency in approach to these services. This drove g overnment intervention to ensure the coordinated a l location of radio spectrum.2.1 1 Spectrum Alloca tionR adio transmission involves the use of p
17、art of the electrom ag netic spectrum. Electrom ag netic energ y i s transmitted in different frequencies and the properties of the energ y depend on the14frequency . For ex ample, v isible l ig ht has a frequency betw een 4 1 014and 7 .5 1 02Hz.U l trav iolet radiation, X -ray s and g amma ray s ha
18、ve hig her frequencies (or equivalently a shorter w ave leng th) w hile infrared radiation, microw aves and radio w aves have low er frequencies ( long er w aveleng ths). The radio frequency spectrum involves electromag netic radiation w ith frequencies3betw een 3000 Hz and 300 GHz.Even w i thin the
19、 radio spectrum, different frequencies have different properties. A s C ave (2001 ) notes, the hig her the frequency , the shorter the distance the sig nal w i l l travel, but the g reater the capacity of the sig nal to carry data. The tasks of internationally coordinating the use of radio spectrum,
20、 manag ing interference and setting g lobal standards are undertaken by the International Telecommunication U nion ( ITU ) . The ITU w as created by the International Telecom munications4C onvention in 1947 but has predecessors dating back to approx imately 1865 .It is a specialistag ency of the U n
21、ited Nations w i th over 180 members.The R adiocom munication S ector of the ITU coordinates g lobal spectrum use throug h the R adio R eg ulations. These reg ulations w ere first put in place a t the 1906 B erlin International R adioteleg raph C onference. A l location of the radio spectrum occurs
22、a long three dimensions the frequency , the g eog raphic location and the priority of the user w i th reg ards to interference. The radio spectrum i s broken into eig ht frequency bands, rang ing from V ery L ow Frequency ( 3 to 30 k Hz) up to Extremely Hig h Frequency ( 30 to 300 GHz). Geog raphica
23、lly , the w orld i s a l so divided into three reg ions. The ITU then a l locates certain frequencies for specific uses on either a w orldw ide or a reg ional basis. Individual countries may then further a l locate frequencies w i thinthe ITU international a l location. For ex ample, in the U nited
24、S ta tes, the Federal C ommunications C ommissions ( FC C s) table of frequency a l locations is derived from both the international table of a l locations and U .S . a l locations. U sers are broken in to primary and secondary services, w ith primary users protected from interference from secondary
25、 users but not v ice versa.A s an ex ample, in 2003 , the band below 9 k Hz w as not a l located in the international or the U .S . table. 9 to 14 k Hz w as a l located to radio navig a tion in both tables and a l l international reg ions w hile 14 to 70 k Hz i s a l located w i th both maritime com
26、munications and fix ed w i reless com munications as primary users. There i s a l so an international time sig nal a t 20 k Hz. B ut the U .S . table a l so adds an additional time frequency a t 60 k Hz. International reg ional distinctions beg in to appear in the 70 to 90 k Hz rang e w ith differen
27、ces in use and priority betw een radio navig a tion, fixed, radiolocation and m aritime mobile uses. These a llocations continue rig ht up to 300 GHz, w i th frequencies above 300 GHz not a l located in the United S tates and those above 275 GHz not5a l located in the international table.The ITU dea
28、ls w i th interference by requiring mem ber countries to follow notification and reg i stration procedures w henever they plan to assig n frequency to a particular use, such as a radio station or a new satellite.2.2 2 The ra ng e of wireless servicesR adio spectrum i s used for a w ide rang e of ser
29、vices. These can be broken into the follow ing broad classes: Broa dca sting services: including short w ave, A M and FM radio as w ell as terrestrial television; M obile communica tions of voice a nd da ta : including maritime and aeronautical mobile for communications betw een ships, a i rplanes a
30、nd land; land mobile for com munications betw een a fixed base station and moving sites such as a tax i fleet and pag ing services, and mobile com m unications e ither betw een mobile users and a fix ed netw ork or betw een mobile users, such as mobile telephone services; F ixed Services: either poi
31、nt to point or point to multipoint services; Sa te ll i te: used for broadcasting , telecom munications and internet, particularly over long distances; Ama teur ra dio;6 Other U ses: including military, radio astronomy, meteorolog ical and scientific uses.The amount of spectrum a l located to these
32、different uses differs by country and frequency band. For ex ample, in the U.K., 40 % of the 88 M Hz to 1 GHz band of frequencies are used for TV broadcasting , 22 % for defense, 10 % for GS M mobile and 1 % for maritime comm unications. In contrast, none of the 1 GHz to 3 GHz frequency rang e is us
33、ed for television, 19 % is a l located to7GS M and third-g eneration mobile phones, 17 % to defense and 23 % for aeronautical radar.The number of different devices using w i reless communications i s rising rapidly . S ensors and embedded w i reless controllers are increasing ly used in a variety of
34、 appliances and applications. Personal dig i ta l assistants ( PDA s) and mobile computers are reg ularly connected to e-mail and internet services throug h w i reless comm unications, and w i reless local area netw orks for computers are becoming com m on in public areas l ike a i rport loung es. H
35、ow ever, by far the most important and dramatic chang e in the use ofw i reless communications in the past tw enty y ears has been the rise of the mobile telephone.2.3 3 The r i se a nd r i se of mobile te lephonyThe history of mobile te lephones can be broken into four periods. The first ( pre-cell
36、ular) period involved mobile telephones that ex clusively used a frequency band in a particular a rea. These telephones had severe problems w i th cong estion and call completion. If one customer w as using a particular frequency in a g eog raphic area, no other customer could make a call on that sa
37、me frequency . Further, the number of frequencies a l located by the FC C in the U .S . to mobile telephone services w as small, l imiting the number of simultaneous calls. S imilar sy stems, know n as A -Netz and B -Netz w ere developed in Germany .The introduction of cellular technolog y g reatly
38、ex panded the efficiency of frequency use of mobile phones. R a ther than ex clusively a l locating a band of frequency to one telephone call in a larg e g eog raphic area, a cell telephone breaks dow n a g eog raphic area into small areas or cells. Different users in different ( non-adjacent) cells
39、 are able to use the same frequency for a call w i thout interference.First g eneration cellular mobile telephones developed around the w orld using different, incompatible analog ue technolog ies. For example, in the 1980 s in the U .S . there w as the A dvanced M obile Phone S y stem ( A M PS ) ,
40、the U .K. had the Total A ccess C ommunications S y stem ( TA C S ) , Germany developed C -Netz, w hile S candinavia developed the Nordic M obile Telephone (NM T) sy stem. The result w as a w ide rang e of la rg ely incom patible sy stems, particularly in Europe, a lthoug h the sing le A M PS sy ste
41、m w as used throug hout the U .S .S econd g eneration ( 2 G) mobile telephones used dig i ta l technolog y . The adoption of second g eneration technolog y differed substantially betw een the U nited S tates and Europe and reverses the earlier analog ue mobile ex perience. In Europe, a com mon stand
42、ard w as adopted, partly due to g overnment intervention.Groupe S peciale M obile ( GS M ) w as first developed in the 1980 s and w as the first 2 G sy stem. B ut i t w as only in 1990 that GS M w as standardized ( w i th the new name of Global S y stem for M obile communication) under the auspices
43、of the European Technical S tandards Institute. The standardized GS M could a l low full international roaming , automatic location services, common encry ption and relatively hig h quality audio. GS M i s now the most w idely used 2 G sy stem w orldw ide, in more than 130 countries, using the 900 M
44、 Hz frequency rang e.In contrast, a variety of incompatible 2 G standards developed in the U nited S ta tes. These include TDM A , a close relative of GS M , and C DM A , referring to Time and C ode Division M ultiple A ccess respectively . These technolog ies differ in how they break dow n calls to
45、 a l low for more efficient use of spectrum w i thin a sing le cell. W hile there i s some arg ument as to the be tter sy stem, the failure of the U .S . to adopt a common 2 G standard, w i th the associated benefits interms of roam ing and sw i tching of handsets, meant the first g eneration A M PS
46、 sy stem remained the most popular mobile technolog y in the U .S . throug hout the 1990 s.The final stag e in the development of mobile telephones i s the move to third g eneration ( 3 G) technolog y . These sy stems w i l l a l low for sig nificantly increased speeds of transmission and are partic
47、ularly useful for data services. For example, 3 G phones can more efficiently be used for e-mail services, and dow nloading content ( such as music and v ideos) from the internet. They can a l so a l low more rapid transmission of imag es, for exam ple from camera phones.A n attempt to establish an international standard for 3 G mobile i s being moderated throug h the ITU , under the auspices of i ts IM T-2000 prog ram. IM T-2000 determined that 3 G technolog y should be based on C DM A sy stems but there are ( at least tw o) a l ternative
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