What's the difference between licensed and unlicensed wireless?

Learn what the tradeoff is between licensed and unlicensed wireless.

Can you please explain the difference between unlicensed and licensed wireless?

All wireless technologies use the airwaves to transmit and receive information. So that many different technologies can use the airwaves simultaneously, wireless spectrum is carved up into chunks called frequency bands. For example, broadcast VHF television is assigned one frequency band, while AM radio is assigned another frequency band.

These are licensed bands, meaning that individual companies pay a licensing fee for the exclusive right to transmit on assigned channels within that band in a given geographic area. For example, CBS, ABC, and NBC local affiliate stations may be licensed to operate on VHF channels 10, 6, and 3, respectively.

Licensing is a way of ensuring that wireless operators do not interfere with each other's transmissions. Without licensing, interference would garble both transmitters' signals, preventing decent reception. With licensing, the only place where interference occurs is usually at the outer edge of the license-holder's assigned coverage area.

However, licensing would be very impractical for certain uses, like communication between your cordless handset and base unit, or interaction between your wireless keyboard and PC. Instead, these wireless technologies transmit in unlicensed frequency bands -- usually the 2.4 GHz ISM band allocated in most countries for use by anyone, without a license. Another commonly-used unlicensed band is the 5 GHz UNII band. Spectrum allocation varies by country (regulatory domain); in the US, frequencies are assigned by the FCC [see this PDF showing frequency allocations].

Unlicensed wireless technologies don't require any permission, so long as products and users comply with the rules associated with that unlicensed band (for example, maximum transmission power). But unlicensed wireless technologies are, by nature, vulnerable to interference. This is why your home or business WLAN can experience signal corruption caused by a neighbor's WLAN operating on the same channel within the 2.4 or 5 GHz band.

When using an unlicensed technology like Wi-Fi, you may have to make adjustments to avoid interference, and the radio environment is likely to continue to change over time. On the other hand, technologies like EV-DO and UMTS are less prone to interference because your wireless carrier purchased the right to use those licensed frequencies. Of course, you can't put up your own EV-DO network -- you have to pay the license holder for service. But you can create your own WLAN anywhere, anytime, using the unlicensed band for free. That's the trade-off between licensed and unlicensed wireless.

This was last published in September 2007

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