Historically, commercial radio frequency applications have relied on narrow band transmission, where signals are broadcast over a narrow portion of the radio spectrum at specific frequencies which are licensed to users by the Federal Communications Commission (FCC). Most licensed narrow band systems in the U.S. operate at 25 KHz bandwidth, in the 450 MHz to 470 MHz frequency range at a speed of up to 19.2K bit per second (bps). Narrow band has been and continues to be the transmission method of choice for large, single-site industrial applications because of its consistent system performance and coverage combined with protection from interference offered by FCC licensing.

Within recent years another transmission option, spread spectrum, has experienced rapid growth within commercial RFDC-based applications. Spread spectrum transmission offers about one-quarter the coverage (compared with narrow band transmission) per base station, but on the other hand, it offers faster baud rates of 2 Mbps. Spread spectrum systems also offer more flexibility for small, multi-site, and global applications, because they don't require FCC licensing.

Spread spectrum radio technology was originally developed during World War II for covert radio transmissions. It provides immunity to interference by broadcasting redundant data across a broad range of frequencies within the unlicensed 902 MHz to 928 MHz, 2.4 GHz to 2.48 GHz, or 5.725 GHz to 5.850 GHz bands; or by continually changing frequencies within those bands.

Spread spectrum transmission development in the AIDC industry began with the 900 MHz band, using a technique called direct-sequence modulation to spread the signal over a range of channels. Each data bit is transmitted over at least 10 different channels for redundancy, and the spread spectrum receiver decodes the binary data and reconstructs it into the original bit stream. Transmitting over an extended bandwidth results in quicker data throughput, but the tradeoff is diminished range.

Most current spread spectrum networks, particularly those operating in the internationally sanctioned 2.4GHz range, use direct-sequence techniques to spread the signal over the radio spectrum. Direct sequencing uses available power to spread the signal very thinly over multiple channels, resulting in a wider signal with less peak power.