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Spectrum Auction. What is that and how does it work?

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Telecommunication companies cannot operate as they please. These companies, like RocketNet, need to receive a license from ICASA (Independent Communications Authority of South Africa) to operate and use designated frequencies. These frequencies, sold on a spectrum auction, are what enable Vodacom users for example, to connect their registered devices to the Vodacom network. Each network operator will have a designated frequency supplied to them so they can provide services like internet connectivity to their customers.

First, what is spectrum

what is spectrum

Spectrum is radio frequencies utilized by telecommunication, television and radio stations as well as a host of other industries to provide digital services to customers. These frequencies need to be specifically allocated, as each frequency can handle only so much traffic. If too much traffic travels on the same frequency complications will occur.

As there is only a limited amount of traffic bandwidth available for each frequency, ICASA hosts spectrum auctions where frequencies are sold off to the highest bidder. ICASA will provide the highest bidder of a specific frequency with a license to operate with that frequency.

947 and spectrum love you

As an example, the radio station 94.7FM, who loves you, has received a license from ICASA to use and broadcast over the 94.7FM frequency. No other company may broadcast or utilize this frequency other than 94.7FM. It is a criminal offense to use a frequency without the necessary license from ICASA. Even the frequencies used by SAPS are managed by ICASA.

947 loves you
94.7 is a frequency

Not all frequencies require a license from ICASA to be used. ICASA has set aside frequencies that are authorized to be used for free by the general public. For example, when you buy a set of walkie talkies, those walkie talkies utilize a certain frequency, but you do not need to go and bid for that frequency at a spectrum auction because the frequencies they use will not interfere with licensed frequencies.

ICASA manage all spectrum

At the time of writing this blog ICASA is set to hold an auction allowing telecommunication companies to bid for their share of the 700MHz, 800MHz, 2.6GHz and 3.5GHz spectrum bands. The purchase of these spectrum bands will allow these companies to continue to roll out services including the 5G network. 5G is the fifth generation of mobile communication standards. 5G, according to experts, will allow for internet speeds of up to ten times that of 4G.

icasa
ICASA manage all spectrum

There was some controversy over this recent spectrum auction. E-TV argued that it would be impossible for television broadcasters as well as telecommunication providers to share the same spectrum on 700MHz and 800MHz bands. The Pretoria High Court halted the process of the spectrum auction after hearing the argument. ICASA argued that the spectrum auction is necessary because it will enable network providers to lower data costs, expand the 4G network and roll out the new 5G technology. It will be interesting to see how this one plays out.

Spectrum auctions are not only held in South Africa

Much like South Africa, the United States of America hold similar spectrum auctions for their network providers. In the USA the industry is regulated by the Federal Communication Commission (FCC). The spectrum auction held this year (2021) by the FCC included over 97 rounds of bidding in what has been the most important auction for telecommunication companies in terms of market dominance and competition.

Spectrum auctions in the USA
Spectrum auctions in the USA

The FCC stated that the spectrum auction generated a massive $81b in revenue from 21 different bidders. Amongst the top bidders were Verizon, who spent a whopping $45b and AT&T who spent $23b. Even though network providers in the USA have already started rolling out 5G networks, they have done so only on low-band frequencies. The latest spectrum auction was held to give bidders access to mid-band spectrum which would be more beneficial to consumers using 5G.

The $81b spent on the FCC spectrum auction more than doubles the amount of money spent on the previous auction.

Spectrum is in high demand

Due to its lightning fast download and upload speeds, 5G has become the next big thing in terms of smart device connectivity, communication and entertainment. With promises that a 4K movie can be downloaded within seconds, customers are eager to receive the next generation network capabilities and the network companies are biting at the bit to get the limited amount of spectrum available.

in high demand
Spectrum is in high demand

Due to the limits on supply of the spectrum, and the limited amount of traffic each spectrum band can handle, these companies are throwing down eye watering amounts of money at spectrum auctions to get what they can. Becuae the more spectrum you have for 5G capability, the more consumers are going to use your network and the more money companies will make on their investment.

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5G. The Evolution Of Speed and Surveillance

5G Speed and Surveillance

One can only begin to imagine the possibilities of 5G network connectivity when one has a more in depth understanding of how network or mobile connectivity has evolved to get to the point where it is. To begin to understand 5G let’s take a dive into the world of cellular network connectivity.

Generation 1

The first generation (1G) of mobile network connectivity was introduced in Japan in 1979 by Nippon Telegraph and Telephone (NTT) at a whopping sign-up cost of $2000 per user. By today’s monetary equivalent that would set you back around R110 000, and that was only the cost of signing up. Then there was the rental of the phone which was around a present-day value of R16 000 a month.

Now, the value that you got from those exorbitant costs were as basic as it gets. 1G only allowed for voice calls and someone with the correct know how could easily listen in on your call if they wanted to. Even though you were paying the price of a small car there was no data encryption for 1G connectivity.

The Next Generation

2G was the next generation of mobile connectivity. This generation did have the capability of being encrypted. This meant it was much harder for an eavesdropper to listen in on your private calls. Encryption scrambles communication between two devices, meaning an unauthorized third party would not be able to understand what was being said between you and whoever was on the other end of the call.

2G started with encryption before 5g
Encryption Started With 2G

Then Came 3G & 4G

In 2001, 3G came to the forefront of mobile networking technology. With this advancement in technology came the ability to access the internet using mobile phones. 3G got the ball rolling in terms of how powerful smartphones would become in the hands of their users. Not only that, a user’s internet surfing habits and search history could now be recorded by cellular companies as well as government agencies and, it has only gotten worse from there.

4G made way for the use of mobile apps which became an integral part of the smart device user experience. Developers and companies saw the value in the information that apps are able to collect about their users from your location to your favourite flavour of ice-cream.

Apps Advanced Data Collection Capabilities
Apps Advanced Data Collection Capabilities

The Personal Cost of Improved Technology

With each new generation of mobile network connectivity that is released, not only does your internet experience improve, but the effectiveness of companies to capture and document information about you, like the things you like, the places you go, the goods and services you purchase online and even the people you socialize with, improves with it, whether we like it or not.

There is a price to pay when using modern-day technology it seems and that is why some people are hesitant about 5G. Because what is the real cost of adopting something now more powerful than 4G. What is possible with the fifth generation of mobile network connectivity?

5G Superiority

There is no question that 5G is a major breakthrough in terms of cellular and mobile network connectivity. 5G has far superior potential compared to its predecessor. For example, 4G had a download speed of about 150Mbps. 5G is said to have ten times that speed ranging from 1Gbs to 10Gbs.

Latency with 5G connectivity will also be much lower than with 4G connectivity. Latency is the time it takes for your computer to send a signal to a server, or another computer, and then for the server or computer to send that signal back to your computer measured in milliseconds.

5G and Surveillance

Due to its enhanced communication capability and speed, 5G will allow improved performance in terms of surveillance. Many security systems communicate to a server via cellular communication and due to the performance 5G offers, security will be augmented in such a way that allows for instantaneous communication.

In essence what will change is the time delay between the action and response. 5G could allow for faster communication to alert emergency services of a potentially dangerous situation. However, not all surveillance is, or will be ,beneficial to you.

Should We Be Concerned?

Obviously there are concerns about surveillance of your personal device and one should proceed with caution however, the silver lining is that 5G is said to have superior encryption capabilities. Smart devices collect data such as voice commands, location, search preferences and even the way your voice sounds, so that it can identify you who are with more accuracy.

Information such as your location could be used against you in some circumstances. Even though police would need a subpoena to obtain such information, it is not entirely impossible. Police would then be able to put you in a certain place and time should they need to, just by looking at the data records from your smart phone.

5G Will Provide Faster and More Accurate Information
5G Will Provide Faster and More Accurate Information

Nothing is ever really deleted. Your data could be stored on servers for years. In this day and age, to be completely free of being monitored or tracked, you would have to move to the middle of the Amazon forest, and even then, you may not be completely off-grid.

If you think the SAPS would never be able to see your data, think again. There is something called the Mutual Legal Assistance Treaty (MLAT). So, for example, if the SAPS needed data extracted from your phone, say from Hong Kong, China they could use the MLAT to ask the companies for access to your data stored on their servers. This is the type of surveillance that is making people nervous.

5G and Me

As mentioned, your download speeds will be nothing like you’ve ever experienced before. The rate at which you can communicate with other devices will exponentially increase and so will the amount of information your device is able to share with friends and family.

Connectivity of other smart devices will also improve. For example, we are already seeing the advent of smart phones connecting to cars whereby you are able to switch your car on and warm up the seats (if you that fancy) from anywhere in the world.

More Powerful Connectivity Means More Inter-connectivity
More Powerful Connectivity Means More Inter-connectivity

All these great advancements seem to come with a price. The amount of data that will be available about you will be vastly scaled. It’s not the end of the world though, it just means you need to be more careful about the information that you store on your devices and what permissions you allow apps to have. If this is a real concern for you then our blog posts on how to create a strong password and how to avoid being tracked online will be a good read for you.

History Repeating

People had the exact same worries about 4G as they currently do about 5G. People like to create panic, and history has a tendency of repeating itself so don’t believe everything you read or hear about 5G and how the government will be able to ‘read your mind’ while connected, even if in the Amazon.