In this paper the problem of ranging between two nodes in a wireless network of acoustic sensors in underwater medium is addressed. One of the fundamental issues in underwater wireless sensor networks (UWSNs) is to determine the location of sensors which is mostly performed by utilizing the range estimation between the unknown and anchor nodes. In general, ranging is performed via measuring either time of arrival (ToA) of the signal or received signal strength (RSS). Previous studies dealt with determining sensors’ location in underwater environment with the assumption of straight line wave propagation. However, the fact is that acoustic waves travel over curved path due to the inhomogeneity of the underwatern medium. In this paper, we develop a new RSS based ranging algorithm in UWSN. To do that, we first obtain an analytical relation which defines transmission loss of acoustic waves in inhomogeneous medium and, then, based on this relation a new algorithm is proposed for estimating the range between two sensors. The performance of our proposed ranging algorithm is evaluated via computer simulations and is compared with that of the conventional straight line wave propagation model. The superiority of our approach in comparison with ToA based ranging algorithms is its applicability in asynchronous scenario

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