The government will next month auction licences to operate wireless broadband services in the 3.4GHz waveband. However, the provision of wireless broadband to areas of the UK not served by Digital Subscriber Line (DSL) or cable links may yet be hamstrung by a combination of inappropriate national regulation and operators' shortsightedness, according to leading industry figures.

Zvi Slonimsky, chief executive of wireless broadband equipment vendor Alvarion, argued that wireless broadband technology is most suitable the provision of access and backhaul connections in rural areas - rather than towns and cities, where wireless services will compete with DSL and cable links - but he fears that heavy-handed regulation will continue to limit progress.

"People need to understand where the sweet spot is for wireless broadband and that sweet spot is in rural or less populated areas where there is no copper or fibre to compete with," Slonimsky said. His comments followed the recent establishment of the Wimax group, backed by leading vendors including Intel and Nokia, to manufacture low-cost wireless equipment based on the IEEE's 802.16 and 802.16a standards to enable carriers to offer wireless links in metropolitan areas.

Slonimsky said that the behaviour of Europe's regulators had effectively blocked the development of wireless technology over the last few years.

"The regulators showed greed and stupidity in giving licences only to new operators, not the incumbents or other strong hands in the marketplace, because they wanted to promote competition," he said.

By restricting the types of wireless services that could be offered, preventing the resale of bandwidth, and charging high prices for licences, regulators have left service providers with too little money to build infrastructure, Slonimsky argued.

None of this bodes well for the UK government's auction of licences to operate broadband services in the 3.4GHz waveband. Fifteen regional licences are up for grabs, and though the government has said the terms will be less restrictive than in the past, it has not yet revealed the new arrangements.

But the range and capacity restrictions of the 3.4GHz waveband means service providers are expected to use the spectrum to provide 2Mbit/s access links into commercial and residential premises.

Mark Main of analyst firm Ovum said he hoped that providers would be given the right to resell wireless bandwidth as backhaul links to cellular operators and wireless LAN (WLAN) "hotspot" providers, and to share their bandwidth with other operators. This, rather than cheaper equipment, is likely to make the business model look more attractive to potential investors.

"[Success] will depend on what the Radiocommunications Agency (RA) is charging for [licences] and whether there are any restrictions on the types of usage," said Main.

Have your say: reply to IT Week