A Hot December in the Spectrum Wars

While there are ways to make a given amount of spectrum more efficient, and therefore able to support more data, and other ways to prepare for the shortage that many experts predict, there is at the end of the day no substitute for controlling as much as possible.

As 2012 winds down, it is clear that the spectrum wars are heating up. Earlier this week, Sprint agreed to buy the roughly half of Clearwire that it doesn’t already own. The spectrum is not the greatest, though experts say it is gaining in utility because it can support the emerging generation of small cell technology. eWeek quotes Sprint CEO Dan Hesse in its coverage:

Clearwire owns a considerable amount of 2.5GHz spectrum, which Hesse described as “more useful when augmented by other [spectrum].” Clearwire’s network, he added, “is a case where the whole is worth more than a sum of its parts. It’s worth less when broken up, like a pair of shoes or a pair of socks.” If a pair of shoes is worth $100, he continued, a single shoe couldn’t necessarily be sold for $50.

In short, Sprint is strengthening itself. A passage near the beginning of Trefis’ analysis of what the deal might mean suggests that Sprint made a prudent move:

But with Clearwire’s huge spectrum hoard and Softbank’s backing, Sprint could soon be a big force to reckon with as spectrum resources become scarcer, high-speed 4G LTE becomes a widespread standard and subscribers get hungrier for data.

A second piece of news this week also will impact the competitive balance. GigaOm has a well-done explanation of the importance of the approval by the Federal Communications Commission of AT&T’s purchase of 2.3 GHz spectrum from NextWave, Comcast, Horizon and San Diego Gas and Electric. Writer Kevin Fitchard suggests the bottom line of the purchase will be to put muscle on AT&T’s LTE rollout:

Those licenses cover 82 percent of the U.S. population in the contiguous 48 states, and, combined with AT&T’s current extensive WCS holdings, would give AT&T control over most of the band. There are only a handful of other WCS holders of any note – Sprint being one – but you can expect AT&T to approach those operators in coming months because gaining complete control of the band is core to AT&T’s plans.

Fitchard goes on to say that the spectrum will be much more useable because of a workaround it engineered with Sirius XM that will enable the two to coexist at that frequency. That deal, he writes, has been approved by the FCC. The final result, which still is a way down the road, will be a near-national LTE network for AT&T.

Finally, there was news concerning spectrum and Dish Network, which of course is known as a satellite video provider. It is seeking to become more, and a key to that ambition is spectrum. Last week, it got a major boost when the FCC lifted a rule the Denver Post labeled as “outdated.” It now is in position to use spectrum that the site said it has held for more than a year to offer broadband wireless service. The Post explained the ruling:

Regulators agreed to remove rules that would have required Dish to offer wireless service that communicates with both land-based systems and satellites. The latter requirement would have added costs to handsets, making the service less competitive with existing options.

The story said that the company has yet to commit to the build-out.

Clearly, regulators and deal-makers at various companies don’t believe in kicking back in anticipation of the holidays. The explosion of mobility and the potential for spectrum to be a limiting factor has led to a lot of action during the past couple of weeks. There is no reason to think that it will slow down in 2013.