HomeInsightsWhat does blockchain have to do with network infrastructure?

Realising 5G’s full potential requires confidence in the security, resilience and performance of the infrastructure that underpins it. The UK Government’s decision to ban Huawei from UK 5G networks has highlighted the current resilience risk of having few suppliers for critical network equipment and infrastructure. Addressing this requires a comprehensive strategy to encourage innovation for new and existing vendors, open-interface solutions and diversified yet interoperable supply chains from the ground up.

Mobile network operators (MNOs) are already applying disaggregated network models to facilitate 5G roll-out by lowering total cost of ownership. Network disaggregation involves breaking down traditionally “bundled” network components supplied by one vendor into smaller ones that each could be supplied interchangeably by many vendors, which can then be provisioned more efficiently including by using software-defined configurations. Improved hardware vendor competition, innovation, and interoperability promises more efficient, flexible and therefore cheaper network deployments and better coverage. MNOs can then focus on more efficiently using what is there and only build what they need.

A version of this is already happening but from a very different style of network operator – completely decentralised (not just disaggregated) wireless networks comprised of a multitude of peer-to-peer individuals hosting compatible small cells earning cryptocurrency rewards for “proof of coverage” and carrying data packets.

While the House of Commons Science and Technology Committee is being told that blockchain “innovations” too often seem to offer solutions to problems that don’t need solving, this novel application of decentralisation to digital infrastructure could be a substantive use case for blockchain outside of finance and digital assets trading. It also wouldn’t be limited to just mobile networks either.

BYO base stations

In a decentralised wireless network, hosts provide their own compatible antennas and broadband connection, and earn cryptocurrency rewards for providing coverage and data throughput. Customers pay using cryptocurrency for data transmitted over the network to and from their connected devices, which figures into the reward to hosts responsible for transmitting those data packets.

Decentralised wireless networks are up and running today. Pollen’s network focuses on LTE and mobile connectivity. Helium’s network supports LoRaWAN for IoT devices and is already providing coverage in the UK.

These decentralised networks potentially offer an alternative solution to the last mile issue where new infrastructure is prohibitively expensive, such as new 5G cell sites in urban environments. They address resilience risk (supply issues aside) by involving multi-vendor interoperable antennas combined with crypto miner and can connect to any broadband connection (fixed or wireless) for backhaul. Blockchain is used to ensure transparency, security and reliability. Hosts mine crypto via “proof of coverage” to tangibly support propagating a functioning network, rather than just for proof of work or proof of stake as seen in other protocols.

Then why hasn’t this happened everywhere already?

While decentralised wireless networks in a sense address the infrastructure cost issue by removing centralised infrastructure from the equation, the model gives rise to a number of legal, regulatory and commercial challenges:

  • Compliance with GCEs? Electronic communications networks (ECN) and electronic communications services (ECS) providers in the UK must comply with the General Conditions (GCEs). Would they apply to someone attaching a mobile small cell to their window and using their broadband connection for backhaul to establish a publicly available network? Compliance with many GCEs would also be cumbersome, difficult to maintain or just outright impossible on a decentralised basis.
  • Using retail broadband services for wireless backhaul. Retail ISPs may prohibit their customers from using it to provide backhaul for a third party network, including a decentralised wireless network. Using it for this purpose would risk customers being in breach of their ISP’s service terms or fair use policy. ISP policies may also class such use as commercial use and require customers to take up business-grade services instead of typically cheaper residential services.
  • Privacy, security and resilience. Networks, including those serving IoT, must be highly robust, resilient and meet minimum security requirements. Ensuring this is far more challenging with a decentralised network involving multiple hardware vendors, a multitude of hosts and greatly reduced centralised control function. Proposed IoT cybersecurity rules in the UK underscore regulatory concerns to protect consumers’ IoT devices from hackers. Decentralised wireless networks may unavoidably end up with certain coordinated, managed and supervised functions to ensure compliance with ongoing requirements.
  • Lawful intercept. Encryption and aggregation applied to network traffic traversing decentralised networks mean that hosts are unable to identify individual data packets. Such networks would need to have also have capability to comply with lawful intercept requirements.
  • Spectrum. Decentralised networks currently rely on the availability of licence exempt spectrum. In the UK, spectrum for LTE and 5G frequency bands on the other hand is typically subject to costly exclusive licences held by MNOs. Other jurisdictions offer pockets of 5G compatible spectrum under a general authorisation regime, such as the CBRS spectrum band in the US. Spectrum availability will significantly impact potential functionality of decentralised wireless networks.

Disaggregated network architecture is already revolutionary to how mobile network operators operate, fundamentally changing how resources are deployed, how technology can be applied to achieve efficiencies and by encouraging vendor collaboration to achieve interoperability. Decentralised networks are a step even further in the direction of liquid network functionality, but with greater coordination, management and supervision challenges to overcome. Given the adoption of blockchain and decentralisation in other sectors, it is easy to envisage that these networks could continue gaining traction in the UK, which presents both opportunities and challengers for regulators. We’ll be exploring further applications of blockchain use cases in technology and telecoms sectors in future articles.

We frequently advise clients on potential legal, regulatory and commercial issues arising at the forefront of converging technologies in the telecoms sector. Click here for further details about our communications offering and here for details about our blockchain group. Get in touch if you’d like to have a further discussion about your project and we’d be delighted to assist.