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After Many Lean Years, New Spectrum Is On The Way For Offshore Industries

Date: Aug 18, 2008

As global demand for oil and natural gas products rises, the energy industry faces continuous pressure to improve efficiency, while at the same time maintaining high safety and environmental standards. As recently demonstrated by Hurricanes Katrina and Rita, technology necessarily plays a key role in these efforts. At the peak of the Katrina disaster, 95 percent of daily oil production and 88 percent of daily natural gas production in the Gulf of Mexico was halted for reasons of environmental protection and human safety. The use of technology extends the amount of time that an offshore facility can remain in service prior to shut-down and allows for the rapid breakdown and reassembly of IP-enabled communications centers as necessary to deal with ongoing emergency conditions.

The "Digital Oil Field of the Future" is often discussed as a way to maximize asset performance. Those closely familiar with this concept, though, are quick to point out that spectrum availability has historically been a significant challenge. Particularly in offshore environments, spectrum for private operations has become increasingly scarce.

For many years, the amount of spectrum available to offshore industries was actually decreasing. For example, the Federal Communications Commission previously reallocated the 1850–1990 MHz, 2130–2150/2180–2200 MHz bands and much of the spectrum previously available in the 2.4 GHz band for other purposes. Spectrum in the 900 MHz band satisfies some uses for narrow band point-to-point and point-to-multipoint systems. Above 900 MHz, however, options have been limited. The next band with a substantial amount of available spectrum is found at 6 GHz, and that band often is inadequate for use in marine environments such as the Gulf of Mexico.

Fortunately, due in large part to the efforts of the Telecommunications Committee of the American Petroleum Institute ("API"), the outlook for offshore private spectrum users is beginning to look more positive. Within the last year, the FCC has allocated 66.5 MHz of spectrum in the 2.5 GHz band in the Gulf of Mexico and opened up spectrum in the 3.65 GHz band, which also is available for offshore use. More relief may be on the way, as well, since the FCC is considering the addition of further 2.5 GHz band spectrum plus spectrum in the television broadcast bands.

2.5 GHz Band

On March 20, 2008, at the request of API, the FCC announced that 66.5 MHz of spectrum in the 2.5 GHz Broadband Radio Service ("BRS") would be made available for licensing in the Gulf of Mexico. The 2.5 GHz band is the same band that Sprint and Clearwire are using to roll out "4G" WiMAX services terrestrially. The large amount of spectrum and the fact that equipment and vendor support will almost certainly be available due to commercial service provider investments may make this a particularly attractive band for use offshore.

Until the FCC's March 2008 Order, the BRS was off limits to entities operating in the Gulf of Mexico. For years, incumbent commercial terrestrial licensees had successfully lobbied the FCC to prevent offshore access to the 2.5 GHz band by claiming that propagation of radio-frequency ("RF") signals referred to as "ducting" would cause uncontrollable interference to land-based operations as far away as the Carolinas.

In 2008, the FCC finally rejected these arguments and concluded that making BRS spectrum available in the Gulf "could provide a means for meeting an important communications need in a critical area, as well as enhance emergency communications in the region." In doing so, the Commission recognized the increased importance placed on the use of rapidly deployable IP-enabled broadband services to support both permanent facilities and disaster recovery efforts. The Commission noted that a number of commercial entities currently provide telecommunications service in the Gulf of Mexico but expressed concern that the Gulf of Mexico still may be underserved for critical purposes.

The FCC noted the lack of licensed spectrum available for offshore use and recognized that while many companies had deployed systems in the "license exempt" Part 15 bands, these frequencies are quickly becoming saturated and unsuitable for mission critical applications. Based on these facts, the Commission determined to license the BRS in the Gulf.

As API requested, BRS licensees in the Gulf generally will be subject to the same technical rules that apply to land-based BRS licensees. To accommodate the interference concerns of incumbent licensees, the FCC established the Gulf service area boundary at 12 nautical miles from the shoreline, consistent with other Commission allocations in the Gulf. The BRS spectrum will be auctioned at some point in the future.

As part of the same proceeding, the Commission is considering whether and how to license the 2.5 GHz Education Broadband Service ("EBS") spectrum in the Gulf (123.5 MHz). EBS is typically restricted to educational institutions, but such entities have no identifiable offshore spectrum requirements. After all, there are no schools in the Gulf – except fish.

The addition of EBS spectrum, combined with the recent BRS allocation, will substantially increase spectrum options for offshore entities and provide much needed flexibility for oil and gas companies operating in the region.

3650-3700 MHz Band

Another band recently released by the FCC in the past year is at 3650-3700 MHz ("3.65 GHz"). August 24, 2007 marked the effective date of the FCC's innovative operational rules for the 3.65 GHz band, and licensing officially began in November 2007. The site-based 3.65 GHz band potentially represents a unique opportunity for private wireless users to deploy point-to-multipoint broadband services.

The FCC's new rules for the 3.65 GHz band incorporate elements of both licensed and license-exempt regulatory schemes under a "hybrid" approach that permits significant flexibility while allowing higher power levels (up to 25 watts/25 MHz EIRP for base and fixed stations) than usually authorized for license-exempt services.

Under the FCC's approach, the 3.65 GHz band is available for fixed and mobile operations on a nationwide, non-exclusive and non-auctioned basis. New stations are required to register in a common database, and licensees must work together to resolve interference, without rights for "first-in-time" operations.

Another unique aspect of the 3.65 GHz band is the required use of contention-based protocols. The FCC's rules limit the operation of devices employing a "restricted" contention-based protocol, defined as protocols which are capable of preventing interference only with other devices incorporating the same protocol (e.g., WiMAX's scheduling protocol), to the lower 25 MHz of the 3.65 GHz band (3650-3675 MHz). Devices employing "unrestricted" protocols, protocols which function to prevent interference even with other, dissimilar protocols (e.g., "listen-before-talk"), will be allowed to operate on all 50 MHz throughout the entire 3.65 GHz band (3650-3700 MHz).

Approximately 400 licensees already have taken the opportunity to obtain a license in the 3.65 GHz band, and various vendors are manufacturing equipment. The 3.65 GHz band represents a potentially important spectrum allocation for private wireless licensees, including offshore users.

TV White Space

The next significant piece of spectrum may come from what is known as "TV White Space" – unused spectrum located between areas licensed to television broadcasters.

In an effort to provide additional spectrum for broadband devices, the FCC recently has been exploring the possibility of allowing devices to operate in the broadcast bands as long as such devices do not create interference to TV broadcasters. Since the FCC's rules require distance separation between TV stations, there are a number of vacant TV channels at any given location throughout the country. Indeed, no TV licensee may be using a given channel in a particular market. Terrestrially, a handful of channels may become available in areas across the country. In the offshore environment, however, where there are no TV broadcasters, several hundred MHz of spectrum potentially are available, representing an immense amount of bandwidth capacity.

Currently, spectrum on TV channels 15, 16 and 17 may be used for base, mobile and fixed use in the Southern Louisiana-Texas Offshore Zone pursuant to Section 90.315 of the Commission's rules. Most interested parties agree that the Commission should be careful in extending TV White Space operations to TV channels 14-20 due to the potential for interference to existing land mobile operations on those frequencies. In that spirit, the FCC has already issued an Order prohibiting personal/portable unlicensed devices from operating on TV channels 14-20 at any location in the United States, although it continues to weigh whether rules could be created to allow fixed use.

The Future Looks Bright(er)

Historically, private radio spectrum allocations have suffered as the FCC has sought to introduce new and innovative technologies. Typically, as new spectrum allocations have been created, private radio spectrum has decreased. Recently, however, things are looking up. With more than 100 MHz of spectrum already allocated, and potentially hundreds more on the way, future opportunities look brighter for offshore wireless users.