There is a potentially dire situation playing out in the United States between LightSquared, a wireless broadband provider, the GPS community, and the US Federal Communications Commission (FCC. The FCC have approved LightSquared's use of radio spectrum to establish new mobile broadband services using 4G/LTE (Long Term Evolution) technology. Studies by the Global Positioning Satellite (GPS) community have shown that LightSquared services will interfere with GPS receivers, causing many navigation and geo-location systems to stop working. This has serious implications for aircraft navigation and emergency services on the ground.

Could a similar radio interference issue ever happen in New Zealand?

To answer this, we must look at the factors driving the US case. Primarily, this is about a lack of radio spectrum for mobile services, driven by a rapidly increasing demand for mobile broadband plus inefficient radio spectrum allocations by the FCC. Another factor is the competitive environment in which LightSquared is seeking to roll out a national wholesale broadband network in competition to the US's big two mobile operators.

New Zealand is following the world-wide trend of rapid increases in demand for mobile broadband services. This demand growth is not sustainable because the radio spectrum is a finite resource and eventually, demand will be constrained by a lack of spectrum. So yes, in this factor, there is potential for radio interference issues as operators seek to use new spectrum.

The New Zealand equivalent to the FCC is the Ministry of Development's (MED) Radio Spectrum Group. They have the difficult task of allocating radio frequencies to users and applications so that cross-interference is minimized and spectral efficiency is maximized.

Last week, the MED disclosed their thinking on the allocation of the 'digital dividend' 700MHz spectrum that becomes available following our switchover from analog television in 2012/13. It is clear that the MED has an exclusive focus on the wants of the big mobile operators who covet this spectrum, rather than the needs of the mobile users.

Our mobile phone companies, Telecom, Vodafone and 2Degrees, want to expand their mobile broadband services in the 700MHz 'digital dividend'. It is cheaper for them to deploy 4G services there, than in other bands. This puts a high value on the 700MHz spectrum, leading the MED to promote an auction process as the means of allocating it. An auction may maximize revenues but for technical reasons, can only do so at the expense of either spectral efficiency or competition. So again, there is potential for radio interference issues in New Zealand.

Each of the factors underpinning the US radio interference problem (demand growth, spectral inefficiency and competition pressures) is a potential issue in New Zealand.

High demand growth issues can be ameliorated by dedicating the 700MHz spectrum to fixed rural broadband services. To mix rural broadband and mobile broadband on the same retail network will lead to high and uncontrollable contention ratios (the number of simultaneous users per connection), so undermining average broadband speeds.

Spectral efficiency will be assured and anti-competitive behaviours avoided by the MED allocating the entire 700MHz spectrum to a single broadband infrastructure provider under open-access provisions. This is the government's approach in the urban Ultra Fast Broadband project where Chorus are the open-access infrastructure provider of fibre-to-the-home connections across much of the country.

Time will tell if such innovative solutions focused on the needs of rural broadband users will prevail over the wants of corporates. If instead, the MED do what they have indicated, then the spectrum auction proceeds must be allocated to extending fibre networks in rural areas.