The Only Spectrum Certainty: More Is Needed

Carl Weinschenk

The best way to think about radio spectrum is to think about water. Water is the lifeblood of nations. Spectrum is the lifeblood of a carrier. Without it, the nation or the carrier will slowly, but inexorably, fade away.

That’s no exaggeration, except for the part about people’s lives being at stake if the water dries up versus their ability to use wireless devices if spectrum isn’t available. But, from a corporation’s point of view — and, remember, corporations are people, my friend — the analogy holds water, so to speak.

There have been some big deals on the spectrum side recently. The biggest was the final approvals given to Verizon Wireless’ deals with a variety of companies. The Benton Foundation has a bulleted overview. Essentially, Verizon will acquire spectrum from cable companies Cox and SpectrumCo (a joint venture of Comcast, Time Warner Cable and Bright House Networks). Verizon will swap some spectrum with Leap and assign spectrum to T-Mobile.

AT&T is responding. BusinessWeek reported last week that the carrier has proposed 24 or more deals with a value of as much as $2.6 billion during the past four months in an effort to increase its spectrum access:

AT&T’s plans would boost its most important spectrum holdings by 62 percent in the biggest 100 U.S. markets, according to John Hodulik, a UBS AG analyst. AT&T’s proposals, which face review by the Federal Communications Commission, include a $600 million purchase of NextWave Wireless, a plan with Sirius XM Radio Inc. (SIRI) to use satellite signals, a radio-wave deal with Comcast and Horizon Wi-Com LLC, and a variety of smaller transactions with regional carriers.

One way of making sure enough people have water to drink is to find new springs and lakes. Along the same lines, finding more spectrum — not just trading what exists — can help alleviate the crunch that the explosion of LTE and new services and devices is creating. The NationalJournal reports that the FCC is considering new ways to convince broadcasters to return some of their bandwidth for use by wireless carriers. The site suggests that this is far from a done deal:

Wireless carriers and other technology industry officials pushed Congress to pass legislation in February as part of a payroll-tax-cut package to authorize incentive auctions as a way to free up more spectrum for mobile broadband. But it remains to be seen how much spectrum the proposal will actually generate. While FCC officials say they have heard from interested broadcasters, industry representatives have countered that few station owners have indicated that they are likely to participate.

Adding spectrum and trading up are two of the ways in which an individual carrier can increase its spectrum holdings. The other great avenue that hard-pressed carriers can take is to more efficiently use what they have. Technology enabling that, such as white space and spectrum reuse, are advancing as well. The key to the future will be whether these approaches manage to stay ahead of a demand curve that for all intents and purposes is a straight upward arrow.

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