FCC Predicts $5.2B Wireless Networking Market

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The market for unlicensed wireless communications devices is experiencing unprecedented, double-digit growth and is expected to reach $5.2 billion of revenue by 2005 for wireless computer networking alone, according to a new Federal Communications Commission (FCC) report.

Written by the FCC’s Office of Strategic Planning and Policy Analysis (OSP) and Office of Engineering and Technology (OET), the white paper calls for more unlicensed spectrum and rules designed to encourage technological and market-based solutions that optimize sharing of available spectrum.

Unlicensed wireless devices are permitted to emit radio frequency energy without the cost and delay of a specific authorization, registration, or grant of a license. Millions of unlicensed devices are already in operation in a multitude of uses for consumers, industry, medicine, government and national defense.

Unlicensed wireless devices are permitted to emit radio frequency energy, without specific authorization, registration, or grant of a license necessary to guard against harmful interference. According to the FTC, there are currently an estimated 348 million unlicensed devices are already in operation including cordless phones, computer networks, sensors and controller devices, home and business security systems, baby monitors and garage door openers.

Cordless phones which have historically been the most important segment of the market. Surpassing corded phone sales in 1997, sales of cordless phones constituted $1.7 billion in 2002. The devices have proven to be a leading indicator of advances in technology and overcrowding in the unlicensed bands but are now giving away that position to wireless computer networking devices.

The report estimates 20 million Americans will be using wireless local area networks by 2007.

Unlicensed devices trace their origins back to 1938 when the FCC first authorized radio devices. Operating under what is known as Part 15 rules, the regulations require the wireless devices to have no vested rights to continued operation, may not cause harmful interference, must accept any interference received and must cease operation if notified by FCC that device is causing harmful interference.

The report says the success of unlicensed devices warrants a forward-looking review of the potential regulatory issues and concludes that modernization of the FCC’s unlicensed wireless rules require a transition from the current “command-and-control” approach of spectrum regulation to more flexible, market-based approaches.